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.
Denne historien er fra October, 2023-utgaven av Beyond Market.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra October, 2023-utgaven av Beyond Market.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
PRUDENT PRACTICES
Banks worldwide navigate a complex balancing act, steering economies toward growth while safeguarding financial stability through thoughtful management of interest rates and credit risks
RETAIN ROULETTE
Inexperienced investors spin the market wheel, chasing dizzying valuations and risking a bubble burst
UNRAVELED THREADS
Bangladesh's crisis disrupts global textiles, offering India a potential opportunity, but production constraints limit its gains
PASSING THE BATON
Succession planning helps ensure uninterrupted leadership
RISKY BUSINESS?
SEBI's efforts to protect retail investors from derivatives market risks could inadvertently dampen market volumes
INFLATION-PROOF YOUR CHILD'S FUTURE
Inflation might be stealing your child's future, but children's mutual funds can be their superhero
EMBRACE UNCERTAINTY, SAYS MARKS
Howard Marks urges investors to embrace uncertainty, long-term thinking, and focus on controllables, shunning in his memo “The Folly of Certainty”
IMPORTANT JARGON
70% OF INDIVIDUAL INTRADAY TRADERS IN THE EQUITY CASH SEGMENT MAKE LOSSES, FINDS SEBI STUDY
AN ASCENT T'O NEW HEIGHTS
The IMF predicts India's economy to reach 55 trillion by 2047, driven by various economic indicators showing positive growth and government initiatives
CARRY TRADE CRASH: GLOBAL MARKETS REEL
Japan’s Policy Shift Sends Shockwaves Through Global Markets, Including India, as Yen Carry Trade Disintegrates
