What is ''pension''?
It is a fixed sum paid at regular intervals as regular income during your post-retirement years.
What is a pension plan?
It is an investment plan offered by life insurance companies to help create retirement funds. The plan provides a pre-specified and regular pension, preventing financial shortfalls in post-employment years.
How do Pension Plans work for an Individual?
Suppose you are 35 years old and plan to retire at 60 years of age. Your estimate is that you will need ₹ 45,000 per month to maintain your lifestyle post-retirement.
Accordingly, you will need to build a fund within the next 25 years that generates a monthly income of ₹ 45,000. This creation of fund is what a pension plan’s role is: You put in a fixed sum regularly, and your capital grows through investments.
At retirement, you can withdraw a specific percentage of the accumulated funds. The remaining fund generates a fixed, regular income for you during your retirement years.
Types of Pension Plans
1. ULIP Investments
ULIPs offer opportunities to tackle inflation and get good returns through capital market investments. These plans are suitable for creating significant retirement funds in a systematic manner. You can select your ULIP's fund types as per your capacity to bear risk and market fluctuations.
ICICI Pru Signature ULIP boosts your returns by investing your premium into your choice of funds, thereby enhancing your profit margin. The plan also returns the mortality and policy administration charges at the end of the policy term, increasing your gains. Moreover, if you stay invested for a long term, loyalty rewards in the form of extra units are added to your fund value, thereby increasing your returns.
2. Deferred Annuity Pension Plans
Through these plans, you can deposit a lump sum amount or invest systematically in regular intervals to help your money to grow. The pension from your deposits is ‘deferred’ i.e., the payout starts a few years after you purchase the plan. These plans are ideal if you are a few years away from retirement.
ICICI Pru Guaranteed Pension Plan is an ideal deferred annuity pension plan that allows you to delay payouts by up to ten years. This plan offers:
- Provision to receive future annuities at a fixed interest rate prevailing at the time of purchase. This prevents changes in economic conditions from impacting your retirement income
- Option to continue pension for your loved ones in your absence
- Option to avail return of purchase price on
- The diagnosis of critical illnesses covered under the plan#
- A permanent disability due to accident#
- Facility for top-up premiums to boost the pension amount3
- Life cover options
3. Immediate Annuity Pension Plans
Through these plans, you pay a lump sum premium and start getting income immediately. The pension amount decided when you buy the annuity1 remains unchanged throughout your life.
ICICI Pru Immediate Annuity Retirement Plan has several features to match your specific financial needs:
- Pension continuing for your loved ones in your absence
- Annually increasing annuity2 to overcome inflation
- Return of purchase price in case of
- an unfortunate event (paid to your loved ones)
- the detection of any critical illness covered under the plan#
- permanent disability#
- Option to receive payouts on monthly, quarterly, half-yearly, or yearly basis
Now, you know what does pension mean and how it functions. It ensures financial security in your retirement age, helping you live a happy and fulfilling retired life.
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1. The annuity is informed to you at the time of availing the plan and is guaranteed for life
2. Benefits in the form of additional annuity would be paid for Higher Purchase Prices. Please refer the product brochure for more details
3. It will be calculated using the then prevailing annuity rates and the age of the annuitant at the time of payment of additional premium. In case of deferred annuity option, the prevailing annuity rates would be derived so as to match the timing of the top-up annuity with base annuity.
# This is applicable only with ROP on CI/PD or death option. Please refer the product brochure for more details.
ICICI Pru Guaranteed Pension Plan UIN: 105N181V02
ICICI Pru Signature UIN: 105L177V03