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What are different types of Annuity insurance plans?
Immediate & Deferred Annuity Insurance plans are the two main types of annuity plans; insurance payments are received immediately after the initial contribution in former whereas payments are received at a future age or pre-decided date in the latter
The types of annuity insurance plans offered on the market make it easy for an individual to understand how they work and which annuity insurance plan will best suit his particular needs.
Immediate Annuity Insurance Plan
In an immediate annuity insurance plan, the holder starts receiving the insurance payments immediately after the initial contribution. A person almost reaching his retirement age and who wants to know what types of annuity insurance plans he should invest in will find this option very convincing and optimal. There is a condition which has to be met in order for this annuity insurance plan to be valid and that is the purchase price, known as the premium, needs to be assembled in just a single installment.
Deferred Annuity Insurance Plan
In a deferred annuity insurance plan, one starts receiving payments at a future age or date that is already decided upon. Such types of annuity insurance plans typically collect regular investments till the consigned age or date but the holder also has the opportunity to make the contribution as a single premium as well. A deferred annuity is not subjected to tax up until the policyholder starts receiving payments. And this characteristic of such an insurance plan makes it the most preferred and suitable annuity insurance plan for people who are looking to secure their retirement age or precious assets well in advance. Deferred annuity insurance plan can easily be converted into immediate annuity insurance as and when required
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