As far as the senior citizens and investments are concerned, there is only one scenario that is prevalent in India. The age above 60 years is considered unofficially to only get the ‘returns’ on the investments that one undertook during the working period. Be it any life insurance plan or other savings plan, most of them are invested in with intent to receive post-retirement benefits.
However, is it wise to just sit idle with cash? There are plenty of reasons to extend the financial planning that started at a young age to beyond the sixties. Generally, as one nears the retirement age, most of the requirements are met. For instance, senior citizens are usually debt-free, and their kids are settled. The parked money would be more than enough to meet the basic necessities.
Hence, it is sensible to pick a portion of idle money and look for investment schemes for senior citizens. The traditional FDs and savings plan only offers mild returns. In contrast, the newer schemes are much better with greater safety. Read on to get guidance on financial planning for senior citizens. After all, this is the golden age to utilize the wisdom gathered over the years.
Here is the list of 4 investment plans that can be considered by senior citizens:
1. Pension4life Plan
Financial independence in the post-retirement age is of utmost importance to live a tension-free, healthy life. To achieve expenditure discipline as per the need, it is rational to think of a guaranteed income scheme. This, along with financial independence, provides returns on the investment.
Canara HSBC Oriental Bank of Commerce Life Insurance brings Pension4Life saving plan. It provides annuity as per the choice of the investor. For the unaware, an annuity is a fixed payment instrument in return for a lump-sum premium. Based on the financial planning and lump sum payment, one can choose an amount to be received monthly/quarterly/half-yearly/yearly. Key features of this plan as follows:
- The minimum age of entry is 45 years, while the maximum age is 80 years
- Provides guaranteed lifetime income which is credited into the bank account
- Comes with a choice for an immediate or deferred annuity with or without return of purchase
- In total, there are 7 options under the plan for investment
The pension4life plan offers worthwhile annuity rates, which differ as per the option chosen. It is one of the best options of financial planning for senior citizens.
2. Guaranteed Savings Plan
As the name suggests, it is a savings plan that offers guaranteed additions to the cumulative annual premium paid. It’s yet another product offered by Canara HSBC Oriental Bank of Commerce Life Insurance. For senior citizens, the age of entry in this scheme is 60 years. One has to choose from payment premium terms of 5, 7, and 10 years to receive 8%, 10%, and 12% addition, respectively.
For the age of entry as 60 years, it comes in two variants: Guaranteed Savings Option and Guaranteed Savings with Double Protection Option. One unique feature of this savings plan is that it also gives death benefits like life insurance. Therefore, it is a better means of financial planning for senior citizens combining savings plus death benefits. Highlights of the Guaranteed Savings Plan as follows:
- Gives guaranteed sum assured and guaranteed additions to the cumulative premium
- Combines wealth creation and protection by providing a death benefit
- Additional guarantees through high premium boosters
- A loan can be availed against this savings plan
- Maximum entry and maturity age is 60 and 75 respectively for senior citizens
All the above perks make it a great investment scheme for senior citizens.
3. Guaranteed Income4Life Plan
A highly customizable life insurance cum savings plan designed to meet the requirement of short-term, long-term, and lifetime income. Similar to the guaranteed savings plan, senior citizens can enter this scheme at the age of 60 years. Various payout options can be chosen if one wants to receive payment monthly, quarterly, etc.
Also, the premium protection feature takes care of any adverse events, keeping the policy benefits intact. In case of death, future premiums get waived off, and income payouts would be as decided earlier. Furthermore, it has additional benefits such as a loan facility, premium booster, and tax benefits. Guaranteed Income4Life plan comes with three options depending on the financial planning.
- Guaranteed income: This plan provides income for a short-term period of 10 years.
- Guaranteed long-term income: This plan covers income requirements for a period of 15 to 20 years.
- Guaranteed lifelong income: Lifetime income is provided up to the age of 99 years. This option is the best-suited investment scheme for senior citizens. Also, it comes with an option to cover a spouse.
4. Invest 4G Plan
Invest 4G scheme by Canara HSBC Oriental Bank of Commerce Life Insurance is a life insurance savings plan. Along with the insurance protection, this scheme invests the savings into a portfolio option chosen by the policyholder. The portfolio comprises equity fund, debt fund, liquid fund, and other fund types. Therefore, it has the potential for providing aggressive returns.
Invest4g plan scheme also offers added benefits such as partial, systematic, milestone withdrawal option. In case of death, the sum assured is paid immediately while the fund value will be paid on maturity. Based on risk appetite, it gives four portfolio management options.
- Systematic transfer option: Systematic entry in the equity segment
- Return protector option: Protects the returns from future market volatility
- Auto fund rebalancing: Automatic balancing of the portfolio every three months
- Safety switch option: Safely move the investment from equity to liquid fund
Invest 4G is an impressive investment scheme for senior citizens who want to have some equity investment.
It is pertinent to invest idle money in such excellent investment schemes for senior citizens. Although the income earned from these schemes is taxable, senior citizens have numerous tax benefits. Apart from making personal income, this can also be used to create a financial legacy and become a safety net for surviving family members.