Investment Plans 172 views August 15, 2020

Reasons for Buying an Annuity Plan for the Retirement

Nowadays, most individuals think to multiply their money through investment. But the major concern for them is to decide the best investment plan for them. So, you have the option to invest your money in an annuity plan for your retirement. You can accumulate a lot of funds for your future and after your retirement, you can enjoy a happy life. Here you can see the various reasons for buying an annuity plan for the retirement and the types of annuity plans available for you. Annuity plans offer you an income for life or for a specified period of time and it is decided at the time inception of the policy.

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Benefits of an Annuity Plan

In an annuity plan, you have the choice to decide whether to pay a regular premium or a lump sum premium. But there are some other benefits of this plan as well.

  1. Low Risk
  2. Free from Managing Funds
  3. Large Coverage
  4. No Investment Limit
  5. High Returns
  6. Tension Free- Retirement
  7. No Burden of Premium
  8. Different Premium Paying Frequency Modes

Low Risk

The annuity plans usually have a low market risk as compared to the investment in the share market. On the other hand for a very low-risk investment, you can take the fixed annuity plan. In this plan, you will receive a certain fixed income but the return on your investment will also be not very high.

Free from Managing Funds

In the annuity plan, you have the option to make the company manage your funds. They will buy only those annuities that will give you a high return and their investors have more experience than you. So, the company will manage the funds on behalf of the insured and will give you a good return after your retirement.

Large Coverage

There are some annuity plans that will give you an income for life after your retirement. But the investment in such types of annuity plans is quite high. So, make sure you have enough funds for investment so that you can afford these types of annuity plans.

No Investment Limit

There are some investing instruments that have a maximum investing limit. But in the annuity plans, you can invest as much money as you want. There is no bar for investment and higher investment will lead to high returns.

High Returns

The annuity plan tends to give you a high return on your investment with low risk. So, it is a better option to maximize your wealth through an investment insurance plan. It will help you enjoy your life even after your retirement.

Tension-Free Retirement

There are some individuals who are worried about their future and retirement. So, it is the right time to take annuity plans at a young age because it will help you to accumulate a lot of funds until your retirement. Once you retire, you can use those funds for living your life happily.

Different Premium Paying Frequency Modes

The annuity plans provide you the option to invest your money as a lump sum or through regular premium. So, you are free to decide the premium paying frequency modes in an annuity plan. You can pay the amount of premium on a monthly basis, yearly basis, quarterly basis, half-yearly basis, and a single premium.

Types of Annuity Plans

  1. Immediate Annuity Plan
  2. Deferred Annuity Plan
  3. Fixed Annuity
  4. Variable Annuity
  5. Joint Annuity Plan

Immediate Annuity Plan

Immediate Annuity Plans are suitable for those individuals who don’t have enough time in retirement. In this plan, you can invest a lump sum amount in annuity and start receiving an income immediately after your retirement.

Deferred Annuity Plan

The deferred annuity plan is best for those individuals who have time in their retirement. It offers you to accumulate funds until your retirement and start giving you a certain income that was decided once you retire.

Fixed Annuity Plan

A fixed annuity plan comprises of low-risk and low returns. It is suitable for individuals who cannot take any risks as they are about to retire. You will receive a fixed income for life or the time period decided earlier after your retirement.

Variable Annuity Plan

The variable annuity plan will give you a variable income after your retirement. In this plan the returns are high but on the other hand, the risk is also high. So, if you have the capability to take risk then this plan would be suitable for you.

Joint Annuity Plan

In a joint annuity plan, you can add a family member to enjoy the income after your retirement. If in case the primary annuitant dies then the secondary annuitant will receive the income benefits.

Conclusion

Now, you must be aware of the reasons for buying an Annuity Plan for the Retirement. It is the best option for you to accumulate funds for your future so that you can enjoy a better and more independent life after your retirement.

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