What Is Annuity?
Regular Income for Your Retirement
Hindi: Annuity एक financial product है जो आपको retirement के बाद नियमित pension या income देती है। यह retirement corpus को invest करके life insurance company से खरीदी जाती है।
📌 Definition
✔ Annuity is a financial contract where you pay a lump sum or series of payments to an insurance company and receive periodic income (monthly, quarterly, or yearly) for a fixed period or lifetime.
✔ It helps in converting your retirement corpus into guaranteed income.
💰 Types of Annuities
1️⃣ Life Annuity: Pension paid for lifetime of retiree.
2️⃣ Life Annuity with Return of Purchase Price: Pension for lifetime + corpus returned to nominee on death.
3️⃣ Joint Life Annuity: Pension continues for retiree and spouse until both alive.
4️⃣ Annuity Certain: Pension paid for a fixed number of years only (5, 10, 15 years).
5️⃣ Immediate Annuity: Starts paying immediately after investment.
6️⃣ Deferred Annuity: Starts paying after a specified period (e.g., retirement age).
🎯 Benefits of Annuity
✔ Guaranteed regular income post-retirement
✔ Security for retiree and family (joint life options)
✔ Helps in financial planning for old age
✔ Predictable cash flow, reduces dependency on others
✔ Option to receive lump sum on death for some types
⚠️ Considerations / Risks
❌ Fixed pension may not keep pace with inflation
❌ Returns may be lower than market-linked retirement options
❌ Limited liquidity after annuity purchase
❌ Taxable under Income Tax slab (pension received)
📈 Tax Treatment
✔ Pension received from annuity is taxable as per Income Tax slab rates
✔ Certain types may offer partial exemption (Government schemes or special policies)