Can an annuity plan save you from bankruptcy?

Financial instability can wreak havoc in any individual’s life. Things can get pretty dicey when it comes to financial stability once you retire. Thus, a good investment or a financial cover is a must. Annuity plan is perhaps one of the best ways of dealing with money and its requirement once you retire.

In this article, let’s comprehend the plan better and take a detailed look at the benefits of this plan.

What is an Annuity Plan?

Essentially, the annuity plan is a financial investment which helps you to get regular payment for life after making a lump sum investment. The real drill is, when the life insurance company invests your money, the investment receives a payback or profit. This profit is then paid to you by the insurance company as pay-outs once you retire. So, annuities work the best if you want to receive a salary or income even after you retire.

Here are some pointers about annuity which you need to remember before we move ahead with the article.

• Annuity plan, first and foremostly, is a regular pay-out which received during the Policy Term.
• If the policy is issued under your name, you are the Annuitant.
• The purchase price of an annuity is the same as a single premium paid towards the policy.

What are the benefits of the annuity plans?

Some of the best annuity plans in India offer the following benefits. The annuity can be paid either monthly, quarterly, or half-yearly. Many insurers also offer the option of paying the annuity on a yearly basis.

• Life annuity:

Annuity plans provide you with an option to receive the level annuity in the form of arrears as long as the annuitant is alive. Which means, so long as you live, you will receive the pay-outs or paybacks.

• Annuity Guaranteed:

Generally, annuity plans offer you a guarantee for 5 years and also for as long as you live. Which mean, you will receive the level annuity in the form of arrears for the first 5 years. This is irrespective of whether you – the annuitant – survives or not during these 5 years. Additionally, after elapse of a guaranteed period which is the first 5 years, you will continue receiving the pay-outs till your last breath.

• Increasing annuity for life, every annum:

With this benefit, the life annuity keeps on increasing @ 3% p.a. The received payback is paid as arrears for as long as the annuitant survives.

• Return of purchase price:

Apart from the level annuity paid, annuity plans also give you the Purchase Price of the annuity (excluding taxes). This is paid to the nominee on death of the Annuitant.

So, if you still want to know whether annuity plans will save you from bankruptcy? The answer is yes. Reasons? All the ones mentioned above. You can even use annuity premium calculator to know your premiums.