Know What is Pension Plan and its Benefits | SBI Life
close

By pursuing your navigation on our website, you allow us to place cookies on your device. These cookies are set in order to secure your browsing, improve your user experience and enable us to compile statistics  For further information, please view our "privacy policy"

SBI Logo

Join Us

Tool Free 1800 22 9090

Pension Plans- All you need to know

Insurance Basics & Financial Advice After years of toiling hard for building your career and looking after your children, retirement is the time for your own self. Your post-retirement years can be a pleasant andexciting new phase of life if you are prudentwith your financial management in your youth.

Pension Plans- All you need to know

6 Minute |

What is a Pension Plan?

After years of toiling hard for building your career and looking after your children, retirement is the time for your own self. Your post-retirement years can be a pleasant andexciting new phase of life if you are prudentwith your financial management in your youth.To make sure that you do not have to compromise with your lifestyle after retirement, you can go for a pension plan. Learn more about what they are below-

What is a pension plan?​

Pension planis a retirement insurance policytailored to take care of your living and medical expenses after you retire. In this uniquely designed retirement plan,you need to pay premiumsin regular intervals over a period of time.These small savings develop into a substantial corpus, and after maturation, it may yield a generous income for your post-employment years. The money you receive on the maturation of the plan is called maturity amount or annuity. You may get the maturity amount in instalments as per the specifics of the plan or as a lump sum. Thus, a pension planis basically an investment which will become a steady source of income for your retirement period.

Benefits of a retirement plan

  • A steady stream of income- After you have retired, taking care of your expenses can be a daunting task without any alternative source of income. With no monthly paycheck in hand, meeting the expenses of an increasingly costly living can be tough. In the circumstances like these, it becomes imperative that you buy a retirement plan which can bea source of income in your golden years.
  • Independence in retirement- Parents usually wish to avoid giving financial stress to their children after retirement. A pension plan gives you this independence after your retirement. The pension plan is an assured source of income, and you will not have to depend on anyone for taking up the responsibility of your wellbeing.
  • Tax Benefits- Like any other insurance plan, you can avail tax benefits under the pension plan as well. Tax benefits are available under Section 80CCC of the Income Tax Act, 1961,which allows for a tax deduction in the total income of an amount not exceeding Rupees 1.5 lakh per year in the previous year. Thus, thematurity amount that you receive will be tax- free.
  • Insurance protection- Several insurance companies have come up with attractive insurance cover with pension plans.Hence, a pension plan will also provide financial security to you and your family from the uncertainties of life.
  • Rider benefits- Add-on rider benefits can also be attached to your pension plan. A Critical Illnessrider or an Accidental Death ridercantake care of your dependents in case of your demisewith a payout.
  • Risk-free plans- Although pension plans have the components of investments, they are free from the risks involved with an investment like fluctuations in the market. For any risk-averse person who wishes to lead a comfortable post-employment life, pension plansare an ideal option.

The unique pension plan benefits make it a lucrative option for anyone seeking to live their retirement years with zeal and independence. Choose the plan wisely depending on your goals and needs and you can lead a happy andcarefree retirement life.

TOOLS & CALCULATORS Pages

Human Life Value Calculator

Here’s a tool that shows your financial preparedness towards any eventuality, so that your family never loses its smile even when you are not around.

Plan Now

Child Education Planner

To help you determine investments you need to make regularly in order to fulfill your little one's dream

Plan Now

Retirement Planner

To help you continue celebrating your life post-retirement to the fullest, a tool that helps you plan for your retirement days better!

Plan now

Need Analysis Planner

A holistic life planner that suggests the right amount of insurance and plans based on your unique needs.

Plan Now