If you want to secure regular income payout throughout your life starting now or later – Annuity Plans (also often referred as Pension Plans) are worth to consider. Mostly such plans are opted by retirees. But even if someone continues to work and still want a regular payout for whatever reason – annuity plans can be opted. What are the options available? What do you must know before buying? Read on.

• Immediate or deferred Annuity - First thing first – decide whether you want regular payout to start immediately or later. If you want to start receiving income immediately – go for Immediate Annuity Plans. For immediate annuity plans, you must pay a single premium in lump sum. If you do not want to receive income immediately but after say, 5 – 10 years – then go for Deferred Annuity Plans. For deferred annuity plans, you may choose to pay a single lump sum premium (in such cases you can defer the payout receiving to commence by minimum 1 year or multiple of 1 year). For deferred annuity plans, if you choose to pay regular premiums – then there must be a minimum deferment period (in most cases, minimum 5 years – though it may vary depending on insurer and plan opted).
• Payment Frequency - Next, you must choose payment frequency. Depending on plan chosen, you may opt to receive regular payouts – monthly, quarterly, half-yearly or annually.
• Annuity Option – Last but not the least – you must choose an Annuity Option. There are so many annuity options available – that you may find it overwhelming. Let’s discuss here two most common options – Life Annuity with Return of Purchase Price: Annuity will be payable to you throughout your life and on death the Purchase Price will be returned to your nominee.
• Joint Life Last Survivor with 100% of annuity to spouse with Return of Purchase Price: Annuity will be payable to you throughout your life; and on death, your spouse will receive 100% of the prevailing annuity throughout his/her life. On death of the last survivor, the Purchase Price will be returned to the nominee.