Many people aspire to have a predictable income. This aspiration motivates them to go the extra mile and save during their working lives. For working professionals who are accustomed to steady income inflows, the continuity, albeit at a lower level, provides a psychological boost and makes retirement more peaceful by alleviating financial worries.
The need to prepare for retirement has grown due to increasing life expectancy and rising cost of living. There is a lingering fear of outliving savings - an undesirable situation that can lead to anxiety and take a mental toll.
To address this need, insurance companies offer annuity products that provide steady income stream tailored to retirement needs. This product aims at assuaging fears of being unable to support oneself during retirement.
WHAT IS AN ANNUITY?
An annuity, a retirement product, is a contract between the insurance company and an individual, also known as the annuitant. In this contract, the insurer guarantees an income payout, either immediately or after the completion of the deferment period.
In an annuity plan, an individual can choose to invest a regular sum (resulting in an accumulation of corpus over the years), or make a lump sum payment as a single premium. The corpus will be managed by the annuity provider, who commits to providing a regular income based on the terms and conditions outlined in the contract.
An annuity is akin to a pension, which government employees receive after retirement. Most private sector employees are not provided pension benefits after retirement, which makes retirement planning vital.
The two basic features of available annuity plans include immediate annuity or deferred annuity.
هذه القصة مأخوذة من طبعة October, 2023 من Beyond Market.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك ? تسجيل الدخول
هذه القصة مأخوذة من طبعة October, 2023 من Beyond Market.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك? تسجيل الدخول
The Trump Card
While the return of Donald Trump as US President may create new challenges, it could also present opportunities, particularly as the US seeks alternatives to China
Sow Today, Reap Tomorrow
Invest for your child's retirement from day one - because why wait for adulthood to plan for golden years?
IMPORTANT JARGON
SEBI Allows Mutual Funds To Invest In Foreign Funds With Exposure To Indian Securities
NO SHORTCUTS, JUST HARD TRUTHS
Riding the economic rollercoaster, Howard Marks reveals the hard truths about why adhering to fundamental principles is critical for long-term stability
BORROWING BOLDLY, SAVING SPARINGLY
Post-pandemic, India's tech-savvy middle class is leveraging bold borrowing trends, balancing premium spending with smarter investments for a bright future
EASING THE PREMIUM PRESSURE
The GST council's upcoming meeting hopes to address potential tax reductions on health and life insurance to improve affordability and insurance penetration while balancing fiscal priorities
PIRACY: STEALING THE SHOW!
Piracy is where blockbuster hits go cheap because the prices are steep
TEMPERED BY FIRE
India's steel sector faces the heat from cheap Chinese imports but holds strong long-term growth prospects driven by rising domestic demand and capacity expansion
TAKING A FIRM STANCE
RBI's action against select NBFCs aims to curb the risks of growth at any cost before it jeopardizes the entire system
STEADY BUT SHAKY
IMF's latest World Economic Outlook forecasts modest 3.2% global growth, with the US thriving while Europe grapples with inflation
