How to Decide the Best Annuity Option for Yourself?

How to Decide the Best Annuity Option for Yourself

The retirement phase is looked upon as a golden era. Everyone dreams of living this time without any stress and in the most comforting manner. Thus, it becomes essential to plan from today in order to actualise this dream. In this case, financial planning is one thing that comes into the picture. The moment one starts earning, it is advised to start planning your finances well in order to enjoy every phase, be it marriage, parenthood, adulthood or retirement. 

Hence, it is essential to check different investment options such as equity, debt, pension plan, saving plan, term life insurance, etc., to secure a great future ahead. Here, annuities play a vital role in doing so. Thus, one should check with different insurance service providers to invest in a reliable pension policy. 

For example, FG Pension Plan or Fortune Guarantee Pension Plan is the best Tata AIA policy that one should consider at the time of planning one’s retirement. Similarly, there are other pension policies which can be readily considered. One can check the best pension plan online, compare them and then select the one which suits the requirements. But, before that, it is also essential to decide on the best annuity plan in India for oneself. 

What is an Annuity Plan?

Annuities are investment products which promise a secured future and generate regular income for the policyholder and his/her family. There are three different types of annuity, namely, fixed, indexed and variable. The best annuity plan for retirement promises the policyholder to provide regular payouts either monthly or annually. The premium amount can be paid in either lump sum or regularly, depending upon the requirements of the policyholder. As per the Income Tax Act, 1961, if the policyholder withdraws the amount, then it is subject to taxation. So, what are the factors that will impact the decision to get the annuity option for buying the best pension plan? 

Factors to Take into Consideration to Choose the Best Annuity Option:

Everyone planning to buy a financial product has different needs and requirements. Hence, it is very important for a person to first analyse all the available assured pension plans, compare them and then make a decision. An annuity plan is a lucrative option which promises financial freedom to the policyholder and a secured retirement time. However, there are certain factors that one should consider to buy the best annuity option for oneself:

  • A safe and secure option

An annuity pension plan builds an accumulated fund or a corpus that secures the future of the policyholder. The investment is majorly made for a tenure of 20 to 30 years at least. It also promises regular payouts. Basically, it replaces the regular income with a pension plan which helps the policyholder enjoy their future comfortably.

  • Check the rate of return

Often, policyholders miss factoring in the inflation rate while identifying the payout amount. When the investments are made, it is equally important for the policyholder to calculate the returns. One can also seek professional advice and estimate future return value. The policyholder should analyse the annuity rates, which can be calculated by keeping inflation rate, financial liabilities and lifestyle into consideration. Thereafter, one should buy an annuity plan. 

  • Withdrawal of funds

There might be a possibility that the policyholder requires to withdraw money in case of emergencies. However, it is advised not to withdraw before the policy is due. But, if there is any possibility, then one should check with the insurance service provider and know about the policies for withdrawal of funds. 

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  • Check the performance of the Insurance service provider

Before buying the annuity plan, one should do background research and study the financial strength and past record of pay-out of the insurance service provider. This will ensure the authenticity of the provider. Since money is hard-earned and depends upon it for future security, one should not take a chance. Thus, check everything well and then go ahead to buy it. 

  • The type of Annuity

There are different types of annuities. The policyholder should analyse their lifestyle, needs and expectations in order to select the right pension plan. This will then benefit them. Policyholders can choose from any type of annuity – immediate fixed annuity, deferred fixed annuity, immediate variable annuity and deferred variable annuity. 


Now that you are well aware of these points, you can refer to them and then buy the best annuity option for yourself. Moreover, you can also seek guidance from experts and then make a decision accordingly. 


IITSWEB is the Chief Business Development Officer at IITSWEB, a Magento design and development company headquartered in Redwood City, California. He is a Member of the Magento Association and an Adobe Sales Accredited Magento Commerce professional. Jan is responsible for developing and leading the sales and digital marketing strategies of the company. He is passionate about ecommerce and Magento in particular — throughout the years his articles have been featured on Retail Dive, Hacker Noon, Chief Marketer, Mobile Marketer, TMCnet, and many others.

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