A Pension Plan offers guaranteed returns after retirement. Some pension plans offer the dual benefit of investment and insurance. Traditional Pension Products as well as Unit Linked Pension Plans are available in the market. The premiums paid against a Pension Policy offered by an Insurance Company are deductible from the taxable income under section 80ccc of Income Tax Act. Normally a Pension Plan will start giving pensions from a minimum vesting age. It varies from 45 years to 50 years from company to company. The maximum vesting age ranges from 70 to 90 years.
Types Of Pension Plans
- Deferred Annuity Plan : Regular premium payment or lump sum investment is allowed in this plan. Pension begins after completing a specific term.
- Immediate Annuity Plans: It only allows lumpsum premium payments. Pension starts immediately after investment.
- Guaranteed Period Annuity Plans: It pays pension for a specific period like 5 to 10 years.