Top 10 Pension Plans in India

Retirement is an inevitable stage in every working individual’s life. This stage of life is likely to induce feelings of apprehension, especially with regard to finances. As regular paychecks cease to arrive after retirement, the financial requirements of maintaining one’s lifestyle and meeting all expenses can become a burdensome worry in every retired individual’s mind. Many might need to compromise and adjust their lifestyles to fit the new reduced budget. Such sacrifices might be difficult. Therefore, to help ease out such tensions, insurance offers a product specifically designed for retired individuals, to provide a regular income to them after retirement. Some of these schemes also provide insurance cover.

Pension plans help individuals secure their financial future.  They protect individuals from any uncertainty or emergency that may arise after retirement. These plans are for senior citizens who are looking to plan their retirement effectively. However, individuals must familiarize themselves with the different pension plans available in order to decide which pension one is best suited for them.

Here are the top 10 pension plans in India:

LIC Jeevan Akshay 6 Plan

This is an immediate annuity plan. It can be purchased upon the payment of a lump sum amount as a single premium and the pension begins immediately after purchasing the plan.

Features and benefits:

• A single premium paid as a lump sum

• Policyholders can choose the mode of receiving the pension - monthly, quarterly, half yearly or yearly basis

• Medical examination is not required

• The minimum purchase price for offline distribution channels is Rs.1 lakh and Rs 1.5 lakhs for online distribution channels

• There is no maximum limits for the purchase price, annuity, etc.

• The policy can be purchased between the age of 30 to 85 years

• Age proof is mandatory

• The premium paid can be exempted from tax

LIC Jeevan Nidhi Plan

It is a with-profits pension plan in which the accumulated amount is used for generating pension for the policyholder on the basis his/her survival beyond the policy term.

Features and benefits:

• The premiums paid towards this plan are eligible for tax exemption under Section 80CCC of the IT Act

• The policyholder receives guaranteed additions @ Rs.50/- per Rs.1000 Sum Assured during the first 5 years for each completed year

• This policy participates in profits of the company from the 6th year onwards

• The minimum basic Sum Assured is Rs 1 lakh for regular premium policies and Rs 1.5 lakhs for single premium policies

• There is no maximum limit for the basic Sum Assured

• The policy term ranges from 5 to 35 years

• The minimum vesting age is 55 years; the maximum is 65 years

SBI Life Saral Pension plan

It is an individual, participating, non-linked, traditional pension plan. It which offers the policyholders protection from market fluctuations and volatility.

Features and benefits:

• The policy offers guaranteed bonuses for the first five years and assures vesting bonuses upon maturity

• It offers a high loan tenure ranging from 10 - 40 years

• The minimum premium payment is Rs 7,500 per year with no maximum limit

• The minimum age for entry to this policy is 18 years and the maximum is 65 years

• The minimum maturity age is 40 years and the maximum is 70 years

• The minimum Sum Assured is Rs 1 lakh with no limit for the maximum amount

HDFC Life - Click2Retire

This plan is an online ULIP policy. It offers the policyholder market linked returns for minimal charges and helps in meeting post-retirement requirements.

Features and benefits:

• The policy offers guaranteed vesting benefits and additional gains from the market

• The minimum age of entry is 18 years; the maximum is 65 years

• The minimum maturity age for this policy is of 45 years and the maximum is 75 years

• Death benefits received by the nominee is always higher than the fund value of the policy or amount to 105% of the premiums paid till then

• The policy is eligible for tax benefits

HDFC Life - Assured Pension Plan

This is also a ULIP policy that offers market linked returns. It also offers loyalty additions to policyholders to meet retirement goals.

Features and benefits:

• The policy offers guaranteed vesting benefits and additional gains from the market as well as loyalty additions on every alternate year from the 11th year

• The minimum entry age is 18 years; the maximum is 45 years

• The policy offers limited and single pay options

• The death benefits given to the nominee is higher than the fund value of the policy or 105% of the premiums already paid

• This policy is eligible for tax benefits under Section 80C and 10(10D) of the IT Act 1961

ICICI Pru - Easy Retirement

This plan ensures regular income to the policyholder post-retirement by investing in equity. This plan offers protection against market volatility and generates good long-term returns.

Features and benefits:

• The minimum premium is Rs 48,000 per year with no maximum limit

• Flexible premium payment modes - Monthly, half-yearly and yearly

• The minimum entry age is 18 years; the maximum is 70 years

• The vesting age is minimum of 45 years and maximum of 80 years

• Policy term ranging from 10 to 30 years

• This policy is eligible for tax benefits (under Section 80C and 10(10A) of IT Act 1961)

Reliance - Smart Pension

This is a nonparticipating ULIP that ensures systematic savings in order to build a lump sum for generating regular income after retirement.

Features and benefits:

• Policy term: 10 - 30 years

• The double benefit of equity participation and capital guarantee

• Guaranteed loyalty additions

• The vesting age is minimum of 45 years and maximum of 75 years

• This policy is eligible for tax benefits (under Section 80C and 10(10A) of IT Act 1961)

Bajaj Allianz - Pension Guarantee

This policy guarantees the policyholder of a guaranteed, regular income after retirement for the remaining duration of his/her life, with a range of immediate annuities to select from.

Features and benefits:

• 6 annuity options to select from

• The minimum entry age is 37 years and maximum is 80 years

• The minimum purchase price is Rs 25,000 with there is no maximum limit

• The minimum annuity installment is Rs 1,000

• The annuity can be extended to the spouse of the policyholder

Max Life Guaranteed Lifetime Income Plan

This is a non-linked traditional annuity plan. It guarantees a regular stream of income to the policyholder after his/her retirement.

Features and benefits:

• Option for life-long payments for as long as the policyholder and their spouse are alive

• The nominee gets back the entire purchase price of the policy after the death of the policyholder

• The pension can be received on a yearly, half-yearly, quarterly or monthly basis

• Four annuity options to select from

• Option to choose a one-time lump sum amount for purchasing the policy

Birla Sun Life Empower Pension

This is a ULIP non-participating pension plan. It is designed to enhance the policyholder’s savings after retirement.

Features and benefits:

• Policy term of 5 to 30 years

• The minimum entry age is 27 years; maximum is 70 years

• Option to select the policy premium amount

• Option to select the vesting date to have an accumulation period of 5 – 30 years

• Option to select risk profile based on risk appetite