Latest articles on Life Insurance, Non-life Insurance, Mutual Funds, Bonds, Small Saving Schemes and Personal Finance to help you make well-informed money decisions.
NPS subscribers have to mandatorily opt for an annuity scheme at the time of exit. They have to opt for an annuity service provider (ASP) at the time of retirement or premature exit from the scheme.
Annuity under the National Pension Scheme refers to the regular payment to the NPS subscriber after her exit from the scheme. These regular payments are provided by an IRDA registered insurance company called an annuity service provider.
If an NPS subscriber retires at the age of 60, she has to compulsorily buy an annuity plan for 40% of the total corpus. She can withdraw upto 60% in lumpsum.
However, if a subscriber chooses to make a premature exit, she will have to buy a compulsory annuity for 80% of the total corpus. She can withdraw 20% in lumpsum.
LIC is the default ASP in case the subscriber does not choose one.
The minimum age to receive annuity is predefined by each ASP. Like, HDFC Standard Life and LIC allow annuity from the age of 30 while SBI Life offers the annuity only after the subscriber reaches 40 years of age.
A subscriber can choose from different annuity options provided by the ASPs as below:
The monthly annuity amounts or pension will differ depending on the option chosen. You can visit the insurer website for specific payouts. Annuity can be received in quarterly, half yearly or yearly frequencies as well.
Follow us on our social media channels:
Copyright © 2024 www.thebridge2wealth.com. All Rights Reserved
Industry News