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What are the best term insurance plans for planning retirement

dateKnowledge Centre Team dateMarch 02, 2021 views113 Views
What are the best term insurance plans for planning retirement

Ever wondered about your life after retirement?

Most people imagine a quiet and serene life spent with their loved ones taking care of them, living off the pensions that their organization may or may not offer them. While it is good to have the reassurance that your children or other close family members will bear the burden of looking after you when you stop having a stable income, isn’t it a lot better to have a little income of your own even then, so that you can still contribute to the household?

During peak years of work, Indians put in the time and effort to save up for their kids’ marriage, upgrading their house, buying cars, and providing their children with a world-class, expensive education. In their hurry to make things easier for their kids, people often forget to think about themselves a few years in the future.

It is true that many organizations in the organized sector have begun to offer retirement and pension plans that can cover the costs of your basic needs after retirement. But on the very likely chance that a health emergency pops up, or one of your children are in urgent need of money, it is ideal that you have a sum of money put away safely or that you get a fixed amount every month without fail. Even if you are a government employee whose pensions are pretty much guaranteed, it is a great idea to invest in a retirement insurance policy.

Canara HSBC Oriental Bank of Commerce Life Insurance offers the best term plan that satisfies the universal standards of retirement plans and goes the extra mile to make sure that you are never in need of anything after your retirement. Their settlement option allows you to receive the entire maturity amount in monthly installments or at any frequency chosen by you if you do not want to receive the full amount in one go.

Benefits of Canara HSBC Oriental Bank of Commerce Life Insurance Term Plans

  • Smaller premiums

    The policyholder can get an impressive life coverage from a term insurance plan even if they pay a smaller and more affordable premium amount. This is ideal for families who are not from a strong economic background. The premium will be even lower if you start very early.

  • Life coverage

    Most term plans these days offer a full life coverage up to 99 years of age. This ensures that the policyholder will be covered for their entire life, and their family members will never have to experience financial difficulties.

  • Sum insured payout

    Term insurance plans usually provide an assured sum to the family members of the policyholder if they die an unprecedented death. Some plans also have the option to split this assured sum into monthly premiums to evenly distribute it over a longer period.

  • Tax benefits

    Most term insurance plans come with tax benefits under Section 80C and Section 80D. This means the total expenditure for one family for insurance will be considerably less when the cumulative tax cuts are subtracted from the total amount paid as premiums.

  • Coverage for terminal illness

    If the policyholder is diagnosed with terminal illnesses like AIDS or Cancer, some term insurance plans offer lump-sum payouts on the diagnosis. This money can help with the treatments, proceedings, etc., protecting the family finances.

  • Accidental death benefit

    To avoid your nominee’s claims being rejected by the insurer in case it is untimely/accidental, most term plans offer an accidental death benefit that offers protection against any misunderstandings in the future.

Canara HSBC Oriental Bank of Commerce Life Insurance Term Insurance Plans

iSelect Star Term Plan

The iSelect Star Term Plan offers a variety of choices in terms of coverage, premium payment and the payout for benefits. This individual non-linked premium life insurance term plan is an important addition to your financial portfolio. The maximum age of entry is 65 years. Once you reach the age of maturity, the assured sum will be paid out to you in monthly installments, lump-sum or as part lump sum and monthly income, based on your choice.

Benefits of Canara HSBC Oriental Bank of Commerce Life Insurance iSelect Star Term Plan

  • Highly customized and affordable

    The iSelect Star Term Plan’s high customizability allows the policyholder to customize their plan according to their financial conveniences. This alignment with your financial goals allows you to make the premiums smaller and affordable. Additionally, there is a discount on premiums for female lives or for higher assured sums.

  • Options for coverage

    You can choose to cover your life for a limited period or for 99 years, which covers your whole life. You can also choose to add your spouse in the same policy at a discounted rate, provided they are under the age of 50 (for a non-working spouse). You can also include additional inbuilt coverages that provide benefits related to Accidental Death, Child Support, Accidental Total and Permanent Disability Benefit etc. You can also increase your life cover according to your financial situation at various points of your life. This augmentation provides high levels of flexibility according to your key life milestones.

  • Options for benefits

    There is always the worry that leaving behind a lump sum amount for your family may not be the best idea, especially if the family is not very financially literate. You might be worried that they may use up the money very quickly. This is why having an option to receive the death benefits in monthly income amounts is a great relief. The iSelect Star Term Plan also has the option for the nominee to receive the death benefit as a part lump sum part monthly income.

  • Choose between Life, Life with Return of Premium and Life Plus

    The iSelect Star Term Plan offers three plan options - life, life with return of premium and life plus, and the life plan comes with the option to have either a level coverage or an increasing coverage. You can also add in-built covers including child support benefits.

  • Tax benefits

    You may be eligible for tax benefits on premiums paid/received benefits, provided it aligns with the prevailing tax laws.

POS - Easy Bima Plan

This pure term life insurance plan has a return of premium on the date of maturity, providing a safe source of financial support after retirement. There is also the option to nominate a loved one, who will be eligible for a death benefit on the policyholder’s untimely demise, provided it is not an accidental death. The maximum age of entry is 55 years and the maximum age of maturity is 65 years - unlike the iSelect Star Term Insurance Plan, there is no provision for increasing the coverage to a whole life plan (99 years).

Highly customizable

The Canara HSBC Orienta Bank of Commerce’s Easy Bima Plan offers customizability at all levels of the policy. The policyholder first gets to choose their sum assured based on their financial requirements. There is a rule that the sum assured amount has to be a multiple of Rs. 50,000. Then the policyholder can choose the premium payment term as well as the policy term.

The shorter the term, the higher the premiums will be, additionally influenced by your age at the time of taking up the policy, the sum assured, the premium payment frequency as well as your gender (because women tend to live longer, insurance companies can offer smaller premium payments to them). The minimum sum assured is Rs. 50,000 while the maximum is Rs. 1,50,000 - however there is no maximum premium limit as it depends upon the chosen sum assured. You can also choose to pay the premium in an annual or monthly mode depending on the modal factors.

Tax benefits

The policyholder is eligible to avail tax benefits on the paid premium amount applicable based on Section 80C of Income Tax Act, 1961.

There you have it – Canara HSBC Oriental Bank of Commerce Life Insurance offers the best term plan that is comprehensive, profitable, and capable of securing your future in times where uncertainty lurks around every corner. Since some of these plans double up as life insurance, you can have all your insurance needs – saving plans, retirement plans, and life insurance – all in one place. The high customizability and safety nets provided by the plans allow you to rest easy.

The best age to take up such a plan is as early as possible so call your advisor today!

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8 funds and 4 portfolio strategies to invest

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Get double life cover in case of accidental death

Choice of flexible premium payment and policy term

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Frequently Asked Questions (FAQs) for Retirement and Pension Plans

The premium is one of the most important factors to consider before buying a policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the Premium calculator available in the ‘Tools and Calculator’ section of www.canarahsbclife.com.

The Invest 4G plan offers three benefit options to choose from. If you have opted for the Life Option or Whole Life Option, the insurer will pay the nominee(s) death benefit if the policyholder meets with an unfortunate incident. However, in the Life Option with Premium Funding, the policy continues even after the death of the policyholder. The company pays the remaining premiums until the policy matures.

Life is unpredictable and so it is important to prepare for all eventualities. If you regularly save a substantial amount of your income for retirement, the corpus may expand to a comfortable level before retirement. In case you become disabled and are unable to contribute to the retirement plans, most plans will continue to multiply your savings. The amount already accumulated will continue to grow and besides the existing plans you can also choose to invest in pension schemes specifically designed for people with disability.

Investment in ULIPs like Invest 4G plan qualifies for tax deductions under section 80C of the income tax law. The maturity benefits of ULIPs are also tax-exempt under section 10 (10D) of the Income Tax Act, 1961. However, if the premium paid during the policy term is more than 10% of the sum assured, the maturity proceeds will be taxable.

The concept of early retirement is catching up fast in India, but there are no specified ages for early retirement. While in some western countries the age between 35 and 45 is considered favourable for early retirement, in India the ideal age is 45-50 years. With the right planning and investments, it is not very difficult to retire early.

At the age of 35-40, people generally have several responsibilities such as children’s education and various EMIs. It is difficult to spare a substantial amount of income for retirement. Depending upon the needs of the household and the lifestyle, one should aim to save around 40-50% of his/her income. Around 10% of the income should exclusively be allocated for retirement planning. Here are some tips to choose the best retirement plan.

  • Focus on your needs: It is easier to formulate a strategy when the goal is clear. Make an estimate of the amount required to sustain your life. Take inflation into account and zero in on the targeted corpus.
  • Research thoroughly: Conduct thorough research before investing in any financial product. Read the term and conditions properly and try to understand how an investment product fits your needs.
  • Consider different products: The market is awash with all kinds of investment products. Do not follow conventional advice as the need of every person is different. Take into consideration all the suitable products, conduct an objective analysis and then invest.

Owning a house is a cherished dream for many. There are several ways to save for a new house, but in urgent cases, people may be tempted to withdraw from their retirement fund. There are various financial products for retirement planning, and all have different withdrawal rules. In the case of the National Pension Scheme, partial withdrawals for special purposes like buying a house are allowed only thrice during the policy tenure. However, to avail the withdrawal facility, you should be an NPS investor for at least 10 years and you are permitted to withdraw only 25% of your contribution. If you have a PPF account, you can withdraw 50% of the accumulated amount, but only after staying invested for at least 6 years. The Invest 4G plan also allows partial withdrawals after five years of investment.

The quantum of monthly savings depends on the specific needs of the buyer. Financial advisors, however, suggest people save around 15% of the monthly income for retirement.

Retirement plans such as NPS have a very low entry threshold. It is also open to all and anyone can open an NPS account and start saving. A small business can also invest in Invest 4G plan from Canara HSBC Oriental Bank of Commerce for as low as Rs 5000 every month.

The choice between paying off a student loan or start a retirement account is not a difficult one. Starting early for retirement planning has its own advantages but extending the student loan will increase the interest burden. You will have to find a balance between the two. Try to pay off the student loan as soon as possible, but do not hold back on investing in a retirement account.

Most people nominate their spouse to receive retirement benefits in their absence. But a spouse is not automatically entitled to be the beneficiary of a retirement account owned by the other spouse.

Gold is a safe investment asset and investors often flock to the yellow metal to stabilise their portfolios. Holding a small quantity of gold can be considered as the intrinsic value of gold remains intact. You can also choose to have an exposure to gold through ULIPs. ULIP funds invest in a variety of asset classes and some fund options also have a small exposure to gold. You can choose fund options with gold to have a small and indirect investment in gold.

While there are no explicit rules barring the use of retirement account to finance real estate, it may not be advisable to do so. For instance, you are allowed to avail loan from the PPF account from the third financial year. The loan can be used to finance real estate, but it would defeat the purpose of having a dedicated retirement account.

While there are no explicit rules barring the use of retirement account to finance real estate, it may not be advisable to do so. For instance, you are allowed to avail loan from the PPF account from the third financial year. The loan can be used to finance real estate, but it would defeat the purpose of having a dedicated retirement account.

The government has allowed all central government pensioners to open a joint account with their spouses.

Vesting date or age signifies when your pension plan’s accumulation phase is over and the distribution phase can begin. For example, in a deferred annuity plan, you may have a vesting date which is 10 to 30 years away depending on your age at entry. You will continue to invest or stay invested till the vesting date. After the vesting date or age, you can start receiving the pension or withdraw the money from the plan.

The steps may differ from plan to plan. However, you can buy the online retirement plans following the steps below:

  • Retirement Calculator: Use a retirement calculator to estimate your corpus need and expected monthly investment amount to achieve it
  • Choose Plan: Select the online retirement plan you want to start investing in
  • Contact Information: Fill in the personal details including the contact information. Make sure to put the correct e-mail ID which you can access since all future communication about the policy will take place via e-mail.
  • Define Your Investment: Select the goal, investment term, investment frequency and amount you want to invest (based on the calculator estimate)
  • Select Fund Allocation: Online retirement plans give you the option to invest in multiple assets including equity funds. You can select the ratio in which your premium will be allocated to these funds as per your risk appetite. Then select one of the portfolio rebalancing strategies.
  • Select Withdrawal Plan: You can withdraw money based on set milestone or systematically from the plan after the lock-in period. Select the options for withdrawal as per your plan.
  • Review Plan & Investment Details & Complete the Application Form

You can pay the premium amount before or after completing the application form to start investing.

The best time to plan your retirement is when you are planning your career. However, this may not be the time when you really start investing money for your retirement. You must start investing in your retirement plan as soon as you start earning.

Retirement is the only financial goal you cannot repair with other means of funding like a loan. Thus, developing the habit of investing with every income you have is the best way to have a comfortable retired life.

Insurance allows your family, especially your dependent spouse to continue living without financial worries if anything happens to you. Also, insurance may help you save enough for retirement in case of permanent disabilities. Additionally, life insurance retirement plans allow you to build a good retirement corpus with bonus additions.

Yes, you can change the nominee of the policy anytime you need. If you are using an Electronic Insurance Account (EIA) to manage your policies, you can change the nominees anytime from this account. Otherwise, you can contact the customer care to update the nominations on your policy.

You can opt for auto-debit of the premiums from your savings account. You can also pay the premiums online using your debit card, credit card or a payment wallet.

You can get Rs. 1 Core pension plan using the online retirement calculator. The calculator will assess your eligibility and provide you with the probable monthly or annual investment to achieve the goal. If the amount seems feasible you can complete the purchase online or set an appointment for a qualified advisor to help you in the process.

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