Pension Plan: Features & benefits

Here is what a good pension plan typically offers. Exact benefits differ by insurer and product, so always read the policy wording.

You pay premiums or a lump sum during the accumulation phase and receive income during the payout phase.

Deferred annuities start income later; immediate annuities start income right after a lump-sum purchase.

Life annuity, life annuity with return of purchase price, joint-life annuity and increasing annuity are common options.

Annuity income continues for as long as you (or your spouse in joint-life options) live.

The nominee usually receives the accumulated value or sum assured if you die before vesting.

Some plans allow part of the corpus to be taken as a lump sum at vesting, subject to rules and tax treatment.

Contributions and payouts are treated differently under various sections; the rules depend on product and tax regime.

Read the fine print. Features are subject to terms, conditions, waiting periods and exclusions. We will walk you through them before you decide.

Key terms to know