Immediate Annuity Plans

Invest once, get pension forever

Unlike in the case of a life insurance policy, where you pay regular premiums to an insurer that makes a lump-sum payment upon your death, with an immediate annuity you give the insurer a lump sum of cash in return for regular income payments until you die. Thus, in the latter instance, you can look forward to a guaranteed regular income. Also, as the name indicates, an immediate annuity starts paying out right away. The market for immediate annuity plans in India is growing and is expected to emerge as a favourable avenue for retirees to park their funds and get an income from it throughout their lives. So, let us get down to the specifics, features and limitations of this financial product.

Subas Tiwari & Gopal Ravi Kumar

shares/debentures/bonds, etc., though excluding your house and land. Your income has stopped because you have retired from service now. You now want to use your savings to generate income every month, to take care of your own and maybe your spouse’s regular living expenses. This is where an annuity plan comes in. There are few financial instruments that offer guaranteed income as long as the person is alive.