What is a Retirement Pension Plan

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What is a Retirement Pension Plan
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• retirement Pension plans or retirement plans are
  offered by Life Insurance Companies to help
  individuals build a retirement corpus. On
  maturity this corpus is invested in an Immediate
  Annuity Plan for generating a regular income
  stream, which is referred to as annuity payout.

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• Typically, pension plans have two phases
• Accumulation phase The premiums paid by the
  policyholder accumulate through the tenure of the
  plan. The policyholder has the option to choose
  Traditional or Unit Linked Pension Plan based on
  their risk taking capacity. On vesting, the
  policyholder has the option to invest the entire
  proceedings in Immediate Annuity Plan from the
  same Life Insurer or commute 1/3rd of the
  accumulated corpus as a lump sum amount and
  invest the remaining in Immediate Annuity.

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• Annuity phase This follows the accumulation
  stage, wherein the policyholder starts getting
  payouts from the accumulated corpus. The age for
  the start of the payouts is decided by the
  policyholder and is called the vesting age. In
  most Retirement pension plan it is usually
  between 30to 70 years. In the immediate annuity
  option, a person can pay in lump-sum, instead of
  over the years, and start getting income
  immediately.
• Payout frequency
• The frequency of annuity payments to be received
  can be monthly, quarterly, half-yearly or
  annually.

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