What are Pension Plans?-canara-hsbc-pension-plans

These plans come in two versions and provide a source of income to people in their older ages when they have retired from active employment. Immediate Annuity plans are where the policyholder pays a bulk amount to the company to buy the plan and then annuity payouts start from the next frequency without any delay. No money is payable if the policyholder dies during the annuity phase. Deferred annuity plans are those where the annuity payments are delayed. The policyholder buys the plan for a specific term, called the deferment period, makes payments for the premium required during this period and when the period expires is eligible to receive annuity. If he dies during this period, a specific benefit is paid as death benefit. The policyholder can only withdraw 1/3rd of the accumulated amount in cash while the remainder has to be used to avail annuity.