Retirement Planning with Life Insurance

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Retirement Planning with Life Insurance

• Life Insurance In India

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Retirement brings with it a drop in income, and
in some cases no income at all. This means that
unless you plan well in time for your golden
years, you might be left high and dry, and
dependent on another for your financial needs.
This is where retirement planning using life
insurance in india comes to the
rescue.Retirement planning entails the
accumulation of wealth during ones earning phase
for life after retirement. It eliminates
chances of dependency and ensures that you can
easily maintain your quality of life, even when
you no longer actively employed. There are a
number of tools available in the market for
retirement planning, such as EPF provided by the
employers, PPF accounts and other such
plans. Life insurance too offers pension plans.
Lets find out more about them.
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Features of Life Insurance Pension PlansAt the
beginning of the policy, you can pick the lump
sum savings that you want to receive on vesting.
One-third of this sum may be withdrawn tax
free, while the remainder will have to be
invested in an annuity plan. Your retirement
savings will increase with non-guaranteed bonuses
(if declared), starting after the very first year
of the policy. No declaration of health status
or medical examination is required for the
issuance of such a policy. The policy also allows
the insured to get another such policy from any
other insurer in the industry simultaneously. The
age criteria of this policy are as follows
Minimum age at entry 40 years (10 year policy
term) or 18years (to the age of 60) Maximum age
at entry 70 years (10 year policy term) or 45
years (to the age of 60)
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Benefits of Life Insurance Pension PlansUnder
Section 80 CCC of the Income Tax Act, an amount
of up to INR 1,00,000 is deductible towards the
premiums paid for a pension plan when the tax is
calculated. Under Section 10(10)A(iii), any sum
received by way of benefit out of the pension
plan is exempt from tax. The death benefit of the
policy is that in case of an unfortunate event of
death of the person insured during the policy
term, the beneficiary shall receive 108 of the
total premiums paid. On maturity of the pension
plan, the policyholder gets the Vesting Fund,
along with the declared bonus. You also have the
option to withdraw 1/3 of the vesting sum tax
free and start receiving a pension from the
residual 2/3 amount. You might also choose to get
pension from another insurer.With such benefits
and features retirement planning using life
insurance pension plans becomes easy, ensuring
that you are financially secure and independent
in later life.
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Source http//onlinelifeinsurance1.weebly.com/bl
og/retirement-planning-with-life-insurance
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