Most of the retirement plans offered by insurers are blended products that offer both investment benefits and insurance. Pension is a basic need of retirement life, after serving the whole life everyone wants to live a retirement with their own style and a pension is a way to live a retirement life in style. It is important to understand three important terms related to pension plans:
Vesting Age: It is the age at which the insured individual starts receiving a pension.
Accumulation period: The period during which the individual pays premiums for accumulating funds for retirement.
Annuity: It is the monthly income received by an individual after the vesting age has been crossed.
Why Should You Plan Now?
It does not take rocket science to understand the fact that you need a sufficient amount of money after retirement to lead a decent life. Even if you are a business professional, who prefers to work in the later stages of life, it is a wise idea to make an investment in pension plans because you will have contingency funds in case of an emergency.
Also, as the plans come with insurance benefits, your dependents will have a substantial amount in case of a tragedy. If we take inflation into consideration, it might be difficult to manage the expenses in the future just by saving the money in your bank account.
The pension plans offer regular income after vesting age, which means you don’t have to rely on anyone to take care of your regular and medical expenses.