Pension plans, is the policy where a person starts investing a small amount of money before his old age, so that after a certain period he can utilize his pre-stored money in the form of pension. Moreover, pension plans are same as annuities because in the both conditions, the policy does not give any life insurance coverage but instead of this, provide a regular amount of money after the maturity of the plan. And because of high return assurance after retirement, many people are drifting towards annuity and pension plans which is why there are many insurance companies like ICICI prudential, HDFC life insurance, Birla sun life insurance who have come up with high returns pension/annuity plans which one can get by paying less premium amount. However, the mode of paying premium may differentiate in each insurance company.

Basically, there are four kind of pension/annuity plans from which a person can choose, which depends upon his personal requirement.

The first pension/annuity plan is guaranteed period annuity, in which the annuity holder receives a specific amount for several years after the maturity of the plan. However, in case of his natural death his nominee receives afterward installments as pension.

Second one is life annuity that assures life time income on monthly basis (with higher returns) as a pension but in case of natural calamity if the annuity holder dies, than the whole amount (without any bonus) suppose to re-pay back to the nominee of the policy.

Third, one is deferred annuities, in which the annuity holder gets the exemption from tax at the time when he starts investing in the plan, however, at the time of maturity when the policy holder start getting his monthly installment than the sum assured is taxable after certain figures.

Fourth, one is Annuity certain, under this plan the policyholder does not get the surety of regular income till the time he is alive but instead of this, the total sum assured at the maturity of the plan suppose to paid within a certain period.