Categories
Uncategorized

Features and Benefits of a Pension Plan

When we are young we feel invincible and confident. Then middle age hits, bringing with it a lot of medical issues and unexpected twists and turns in life. By the time it will be too late to start saving for retirement. So plan early, pay small premiums as you are considered less liable by the insurance agencies. If your money is with them for a longer period, they will be generous in your settlement.

What are the features and benefits of a pension plan?

Pension plans offer the same income and advantages to an individual even after ceasing to work. Many youngsters today are looking forward to retiring early and enjoying life away from the shackles of a desk job. If you have been caught napping in this area, don’t panic. Just pay a higher premium and try to catch up by curtailing your current expenses. If you are late you may even consider reverse mortgaging your current property to benefit you till you die. Find out the details of the plan from your advisor before taking a decision.

How does the insurance company offer you a lump sum after your payment term?

They invest your monies in mutual funds, government bonds, gilds etc. Insurance companies are subjected to strict regulations in all the countries around the world. This guarantees good returns for your money. However, if you are investing in the markets yourself, there are certain risks involved.

Taxes on pension plans are determined by the government to be lesser than other benefits, so there is savings in this area also.

There are pension plans with cover and without cover. What it means is that, if the insurer dies during the payment tenure, there is extra payment to the nominees for the life insured. In case there is no cover, the accumulated payments with interest are paid to the survivors of the insured.

Leave a Reply

Your email address will not be published. Required fields are marked *