Insurance Plans 181 views August 21, 2020

What is an Immediate Annuity Plan?

An annuity is basically a sum of money that is paid to the insured for a specific period or for the rest of life. But the insured has to decide the type of annuity plan at the time of inception of the policy. There is an immediate annuity plan in which the insured start receiving the income immediately after buying the annuity. It is a contract between the insured and the insurance company where the insurance company gives a monthly income to the insured immediately after issuing the policy. Some people also call this plan as the Single-Premium Plan where you will only have to invest the money only once. Let’s explore the features and benefits of the Immediate Annuity plan.

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Benefits of the Immediate Annuity Plan

There are some benefits of the Immediate Annuity Plan that will help you to realize the importance of the plan.

  1. Regular Income after Retirement
  2. One Time Investment
  3. Multiple Modes for Receiving the Income
  4. Lifetime Income
  5. Sold by Known Insurance Companies

Regular Income after Retirement

Most of the individuals are concerned about their life after retirement. If you want to live an independent life then the immediate annuity plans are best for you. You can buy the annuity just before your retirement so that you can start receiving a regular income immediately after your retirement.

One Time Investment

The annuity plans involve one time investment in which you have to invest a lump sum amount to purchase the annuity. There are some individuals who spend their gratuity income after retirement to buy the annuity plan. After buying an immediate annuity plan they start receiving income from the next month.

Multiple Modes for Receiving the Income

There are multiple options for receiving the income once you buy the immediate annuity plan. You can receive income on a monthly basis, quarterly basis, and yearly basis. You will have to decide the mode of receiving the income at the time of inception of the policy. There are multiple options for income frequency and you can choose any of them as per your convenience.

Lifetime Income

There are some annuity plans that give you a lifetime income. But you will have to invest a huge amount of money for buying the annuity. These plans will help you to enjoy your life after your retirement until your death.

Sold by Known Insurance Companies

There are many trusted insurance companies that deals in immediate annuity plan like ICICI Pru, ICICI Lombard, Aditya Birla Sunlife, and many others. These companies have good services towards their customers and you can clear any queries related to the plan.

Best Time to Buy the Immediate Annuity Plan

The best time to buy this annuity plan is just before your retirement because there will be no break between the last salary month and the first annuity income month. Your income will continue from the next month so that there is no stoppage of your regular income.

How Does this Plan Works

In an immediate annuity plan, you will make an investment as a lump sum into an insurance company to buy the annuity. The company in return will start paying you a regular income from the next month and you will enjoy a regular income. But if in case the insured dies before the maturity of the payback period then all the money will be seized by the company.

On the other hand, if the insured survives the payback then the company will return all the money that was invested to buy the annuity. Therefore you must take an immediate annuity plan that gives the income for life.

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