Pension Plans Are an Incredibly Easy Method That Works for All

The initial policies and motives of individuals after India got independence was, to find jobs. However, soon they realised that just getting a well-paying job wasn’t the only solution. They were bound to work-out something known as ‘post-retirement finances.’ These included not only basic costs of survival but high-end one-time expenses like education, marriage of children, etc. 

Hence, came into existence the concept of ‘Pension Plans.’ Pension or Retirement plans involve saving a set of the funds you accumulate during your working years to meet your needs after you stop hitting the office. An ideal pension plan or retirement plan can be understood as a sort of a post retirement salary. It is received every month but may be higher than the salary you earned because it consists of invested funds. 

Reasons why Pension Plans do make it a lot easier

The need to be financially independent: While initially, people looked at retirement as an age to foot the big expenses of their children- times have changed. Studies of Indian households reveal that 90% of retired employees depend on their children for financial assistance as their savings get exhausted rather soon.


The remaining 10% get government pensions or aid from former employers, but even this may fall short. Considering the increase in medical care and day to day expenses, planning one’s retirement is important now than ever.


Increase in Life Expectancy: As healthcare facilities continue to improve, the average life expectancy increases. But there’s nothing like a free lunch. These facilities come at a cost. As per the latest data published by the World Health Organization (WHO), the average human life expectancy in India is 68.8 years (2018).


Another report states that healthcare costs in India are bound to double in comparison to the rate of inflation across the country. So how does one pay for such facilities and sustain health-related expenses post-employment? A retirement ULIP plan, that’s how.


Nuclear Family Set-up: The transition from the joint-family system to a nuclear one had a huge impact on life post-employment. Essentially, being on your own and being financially independent is the only way to deal with life after employment. Having a retirement plan in place now will provide the financial assistance you need during retirement. 

Types of Pension Plans in India

Following are the different types of pensions plans available in India.

  • Deferred Annuity Plan

In this pension plan, the premium is paid for a limited period. The pension starts as soon as the tenure ends.

  • Immediate Annuity Plan

Under this pension plan, the investment is done once through a lump-sum amount. The pension starts as soon as the investment is done.

  • Pension Plan With/Without Life Cover

Pension plans with a life cover offer a sum assured to the nominee upon the untimely death of the policyholder during the ULIP tenure. Immediate annuity pension plans are pension ULIPs that do not offer life cover.

  • Traditional & Unit-Linked Pension Plans

These pension schemes are a types of investment plan. They either invest in government securities, called traditional pension plans, or in a combination of bonds, stocks, equities, etc., called Unit-Linked Pension Plans.

  • Annuity Certain Plan

In this, you get the annuity amount for a specific number of years, which you can choose as per your requirement. In the case of your demise before the expiry of the payments, your nominee will be paid the amount.

  • Guaranteed Period Annuity

As the insured, you get the annuity for a certain period, such as 5, 10, or 15 years, etc.

  • Life Annuity

In a life annuity retirement plan, you receive the pension throughout your life. If you choose the ‘with spouse’ option, he/she will get the pension benefit in your absence.


Hence, though post-retirement financial life is a matter of concern for everyone the solution is simple. Get to your pension funds now and start with Bajaj Finance!


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