Pension Plans For Senior Citizens

Things You Need to Know Before Buying Car,House, Health & Life Insurance online.

Insurance Buying Tips #1: Shop smart
When looking for insurance, your No. 1 priority should be to find adequate coverage. Price is important, but you’ll want to determine what kind of coverage you need first. Then you can fit that coverage into your budget and determine which carrier can provide you with the most comprehensive policy for your situation. You may be tempted to choose insurance with the lowest price tag, but if you don’t have enough coverage (or the right kind of coverage), you will see less financial benefit when it comes time to file a claim.
Insurance Buying Tips #2: Look for discounts
Once you evaluate your coverage needs, factor in your budget and find ways to save. Ask your insurance agent if there are any discounts on your coverage. Often, carriers offer discounts for things like paying your policy in full, staying auto accident-free or, if you’re in school, getting good grades. You also can save money by “bundling” multiple policies, such as purchasing a home and auto policy from the same carrier.
Insurance Buying Tips #3: Fill in the gaps
An average policy will cover the basics, but you may need to add extra coverage to meet your unique needs. For instance, you may have items like electronics or a nice piece of jewelry that would be financially difficult to replace, even with the assistance of your average renters or homeowners policy. You may want to add additional coverage for these items.

One imagines the retirement period to be a phase when all the responsibilities are completed, one plans to live comfortably to fulfill ones long desired hobbies which where a distant dream till retirement due to family and social responsibilities. One looks forward to the time spent without any kind of financial worries with the belief that the investments made during the early stage in lie would pay off…But the reality is completely different. With rising standards of living and inflation no matter how much one plans for his retirement at times it turns out to be insufficient for both personal and medical needs.

What are Pension Plans?

Pension Plans also known as the retirement plans are investment plans which work on the principle of small regular savings throughout the work life in order to make provision for retirement. Opting for the best Pension plans lets you divert a part of the current income to provide cover for post retirement needs.

Why do I need a Pension Plan?

One might feel he has saved enough for the post retirement needs, but with ever increasing cost of living and mounting unforeseen medical expenses the savings would get exhausted very soon. Selecting a proper Pension plan would help save cash flow for retaining the basic lifestyle post retirement. Investing continuously in Pension plans helps in multiplying the retirement corpus manifold due to the compounding effect of the plan design.

Types of Retirement Plans:

a) Deferred Annuity: Here the corpus is accumulated through regular premium or single premium over the term of the policy selected. Once the policy term ceases, the distribution or the pension starts.

b) Immediate Annuity: As the name suggests in this case the individual starts receiving the annuity immediately. Individual deposits a lump sum amount and the pension begins. So for investors with a huge corpus to be parked this is a good option.

Insurance Buying Tips #4: Purchase life insurance—you aren’t too young
Life insurance is essential, no matter how young or old you are. And for millennials, buying now may be a smart move because it’s cheaper to buy a life insurance policy when you’re young and healthy. This kind of insurance can help your family cover unexpected costs in your absence, including student loan debt or a mortgage, in addition to end-of-life costs. And if you have kids, a life insurance policy can also support their education or childcare expenses. Additionally, every millennial should consider long-term disability coverage, which helps you stay afloat financially if an accident happens and you become disabled and unable to work.
Insurance Buying Tips #5: Talk to an independent agent
An independent insurance agent is an essential resource when purchasing insurance—especially if this is your first time. An independent agent works with multiple different carriers, which is different from captive agents who can only sell insurance from the carrier they work for. Working with an independent agent can help make sure that you are getting the best coverage, for the best price. You’ll also benefit from independent agents’ insurance knowledge; they know how to talk you through your options and actually explain what each policy includes. An independent agent will make sure all of your assets are covered, help you find discounts or other ways to save, and be a valuable resource as your life changes and your insurance needs change, too.
Insurance Buying Tips #6: Only buy insurance to maintain your existing standard of living
You don’t need insurance for events that won’t severely strain your finances. Start with your basic needs (home, auto, business), then work your way to include other needs (cyber, liability). You can always obtain coverage later for something if you change your mind. You can minimize your risk and maximize your savings by buying insurance that won’t cause you to break the bank.

c) Guaranteed Period Annuity: In this case, the annuity is paid not just for the term selected but beyond that too. In case the policyholder dies before the term, the annuity is paid to the nominee. If the individual survives pension continues throughout the life.

d) Annuity Certain: In this case the annuity is paid for a specified number of years selected by the policyholder. If the person dies during the term of the policy, the nominee gets the annuity until the policy ceases.

e) There are certain plans which have the insurance component along with investment. Although the premium allocation towards insurance cover is relatively lower compared to investment to shield pension. If the dies during the term of the policy according to the guidelines of pension plans with insurance cover, the nominee gets a lump sum amount as death cover.

f) The deferred annuity plans have the insurance cover and the immediate annuity plans are without insurance cover as of now.

Benefits of Pension Plans:

  1. Minimum Guarantee: As per the IRDA guidelines, there cannot be 'zero returns' on premiums or there has to be a certain amount of maturity benefit. Most insurance companies guarantee a minimum of one percent of the total premium paid for the entire term.
  2. Tax Benefit: The final payout is released in two ways. 33% of the final payout can be withdrawn as a lump sum amount which is non taxable whereas the rest is taxable.

Thus the pension plan helps in meticulous saving phase by phase.

There are two phases for any retirement Plan:

1) Accumulation: This phase is the phase which starts from the time the individual starts saving in small portions periodically.

2) Distribution: This is the phase which comes at the later stage in life or the post retirement stage…i.e. here the corpus saved periodically over the years is returned either as post retirement benefit or as medical cover.

It is imperative to choose the retirement plan which provides the maximum returns, thus an in depth research and study of the pension plans available in the market is necessary before we select the one which suits our needs.

Insurance Buying Tips #7: Ask your insurance provider what the policy doesn’t cover
Every insurance policy has perils that are not covered by your policy. These perils are referred to as “exclusions”, and every policy has them. Ask your insurance provider to explain the exclusions in your policy to avoid discovering what they are once you incur damages or a loss.
Insurance Buying Tips #8: Consider bundling several policies with one insurance carrier
here may be value in bundling several policies with one insurance carrier. If you’re looking to insure multiple vehicles or obtain multiple types of business coverage (e.g., liability, property, cyber), then you may want to consider obtaining coverages under one insurance provider who carries multiple products, and who may be able to offer you multi-policy discounts or loyalty programs.
Insurance Buying Tips #9: Review your insurance needs on a yearly basis
As your needs evolve, so will your insurance policy. Maybe you’ve acquired a new vehicle since obtaining auto insurance for your primary vehicle, or started operating your business out of your home, or experienced a cyber-attack during the year… Whatever the change(s), you’ll want to make sure you’re covered for any new risk exposures. Talk to your insurance provider to stay on top of your insurance needs.
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