Investment Plans 115 views March 30, 2021

A pension plan can be beneficial for Non-resident Indians (NRIs) who want to settle down in India after their retirement. It can help these individuals accumulate savings over a long period and ensure a peaceful retirement for them. However, considering factors like inflation, life expectancy and monthly expenses, the earlier they start investing in pension plans, the better it will be for them. It will help them generate more corpus and meet inflationary demands much better than someone starting off late.

So if you are an NRI looking to buy pension plans in India to live your retirement days, this article could be a good read for you! In this article, we will be discussing important aspects related to buying pension plans in India that NRIs should keep in mind. Do read to know more!

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Categories of Pension Plans Offered in India

When planning for your retirement, the first thing that an NRI should know is the categories of pension plans offered in India. We are showing them in the below table. Please check!

Pension Plan CategoriesDetails
Immediate AnnuityHere, a pension plan starts immediately as soon as you purchase the plan and deposit a lump sum amount.
Deferred Annuity With this plan, a corpus of wealth can be accumulated over the policy term with the help of premiums that you pay at regular intervals. However, the pension starts once your policy term is over.
Annuity CertainThis type of pension plan provides the pension amount via multiple payments over a term chosen by you.
Life AnnuityWith this plan type, the policyholder will receive a pension throughout your lifetime. Also, in case something unfortunate like a death happens, the spouse will receive a pension.
Cover PensionThis plan provides an insurance cover with which the policyholder’s dependents will get a lump sum amount in case of an unfortunate event like death.
National Pension Scheme(NPS)This type of plan is managed by the Central Government of India with which a policyholder can withdraw 60% of the deposited amount at retirement, while the remaining 40% must be used to buy an annuity.

Note: Here, the annuity does refer to a series of payments made at regular intervals. The frequency of payment can vary from one type of annuity to another.

Eligibility Criteria for NRIs Wanting to Buy Pension Plans in India

One of the most crucial things for an NRI who wants to buy a pension plan in India is to know the eligibility. If we talk about the most popular pension plans in India, the minimum age at the time of entry stands at 30 years on average, while the maximum entry age can go up to 75 years. For most plans, the minimum vesting age (age at which an individual starts receiving pension payouts) is fixed at 45 years, while the maximum can be 80 years.

The policy term of a pension plan in India generally ranges from 10 to 30 years. However, it may vary from one policy to another policy depending on your choice. Coming to the premium amount, an individual needs to deposit INR 50,000 as the minimum annual premium amount, while there is no limit on the maximum amount.

Documents Required for NRIs Looking to Buy Pension Plans in India

NRIs can buy a pension plan in India just like resident Indians. However, to buy the same, insurers ask for some important documents – A permanent Account Number (PAN) and an NRO (Non-resident Ordinary) bank account. An NRO account is the type of bank account opened in India in the name of a non-resident Indian, to manage the income earned by him or her in India. Also, an NRI individual can open a joint NRO account with one or more NRIs or Indian citizens.

Do remember that NRIs will also need to provide a life certificate that should be issued by an authorized Indian official in the Indian Embassy or the bank’s branch in the country they reside in. It will happen once a year in November. The respective branch will credit the due pension amount every month to the pensioner’s NRO account.

Top Pension Plans for NRIs in India

In the below table, we are providing the key features of some top pension plans for NRIs in India. Please check!

Pension Plan for NRIs in IndiaKey Features
Aviva Wealth Builder Plan
  1. Guaranteed payout to the nominee in case of policyholder’s death
  2. Guaranteed payout at maturity
  3. Enhanced flexibility to invest in a savings plan up to 60 years
  4. Option to pay premiums monthly
  5. Higher guaranteed maturity payouts for premiums higher than INR 2.5 lakh
Bajaj Allianz Life Guaranteed Pension Plan
  1. Guaranteed income throughout life and paid as per the choice and need
  2. Multiple annuity options according to your lifestyle goals
  3. Option to receive a return of purchase price on death or as survival benefit
  4. Option to start annuity immediately after the plan ends, or as per your convenience
LIC Jeevan Akshay Plan
  1. 10 annuity options on the payment of a lump sum amount
  2. Payment of annuity throughout the lifetime of the annuitant
  3. Minimum purchase price of INR 1 lakh
  4. No maximum purchase limit
  5. Minimum annuity of INR 12,000 per year
LIC Jeevan Nidhi Plan
  1. Risk cover during the deferment period
  2. Guaranteed additions at INR 50 per INR 1,000 sum assured for each completed policyyear for the first five years
  3. Multiple annuity options such as for life, for certain periods, increasing options, etc.

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