WHAT IS LIC’S NEW JEEVAN SHANTI PLAN?
LIC’s New Jeevan Shanti is an Annuity plan which has option of purchasing Deferred annuity and can be purchased only by paying a lump sum amount. The plan provides for annuity payments of a stated amount throughout the life time of the annuitant.
WHY BUY DEFERRED ANNUITY PLAN?
Buying a deferred annuity plan can be a prudent financial decision for individuals who seek to secure their future and ensure a steady income stream during retirement. A deferred annuity plan is a type of retirement product that allows policyholders to accumulate funds over a specified period, known as the accumulation phase, and then receive regular payouts, known as annuity payments, during the distribution phase (usually retirement). Here are some reasons why someone might consider purchasing a deferred annuity plan
RETIREMENT INCOME
One of the primary reasons to buy a deferred annuity plan is to create a guaranteed and reliable source of income during retirement. By contributing to the plan during their working years, individuals can build up a substantial fund, which is later converted into regular annuity payments to support their lifestyle after retirement.
TAX-DEFERRED GROWTH
Deferred annuity plans offer tax-deferred growth on the funds invested. During the accumulation phase, the money grows without being subject to annual taxes on dividends, interest, or capital gains. This tax deferral can help the accumulated amount to compound more effectively over time.
FLEXIBILITY IN PREMIUM PAYMENTS
Deferred annuity plans often allow policyholders to contribute premiums over time, rather than requiring a lump-sum payment. This flexibility can make it easier for individuals to contribute to their retirement fund according to their financial capacity and cash flow.
LIFETIME INCOME
Deferred annuity plans can be structured to provide lifetime income, ensuring that the policyholder will not outlive their retirement savings. This protection against longevity risk can provide peace of mind during retirement.
NO CONTRIBUTION LIMITS
Unlike some retirement accounts, deferred annuity plans often have no contribution limits, allowing individuals to invest more for retirement if needed.
DEATH BENEFIT
Many deferred annuity plans come with a death benefit that guarantees a pay out to the beneficiary in case the policyholder passes away during the accumulation phase. This feature can provide financial protection for loved ones.