When you are young, retirement might be a tiny dot in the distance. You would be living your dream life, doing everything except saving up for your later years. However, what seemed like ages from now would come just like that. Only then do you realize you did not do enough planning to sustain your retirement life. Doing timely financial planning in Dubai will ensure you can settle down peacefully and live an independent life after retirement. So, here is an all-inclusive pension planning guide for NRIs.
What is a Pension Plan?
The pension plan is a corpus you build over time that pays a lumpsum benefit at its maturity. This amount can either be done as a lumpsum payment or by making regular investments in small amounts over time.
Different pension plans in the UAE
If you want to start investing for your retirement, then there are many plans that you can select. Here is a list of pension plans to consider.
1 – Deferred Or Fixed Annuity Pension Plan
This plan is a fixed payment plan that matures after a certain period. To understand it better, just think of it as a regular investment plan where the amount is locked until maturity. Once it matures, you can either receive it as a lump sum payout or withdraw it every month. This plan offers a fixed interest rate on investments. Therefore, it is one of the safest investment plans in Dubai.
2 – Immediate Annuity Pension Plan
Like its name, this plan would provide instant returns when you start investing. You can enjoy assured benefits for life. However, the returns depend on the market conditions. The lump-sum money you invest is converted as small payments. This is an ideal plan for those close to retiring who cannot afford to lock their funds.
3 – Certain Annuity Pension Plans
The insurance company would either pay the policyholder or the nominee for a certain period only. The returns are very attractive among all other plans since they have an expiration date.
4 – Life Annuity Pension Plans
NRIs very much prefer this plan. It will guarantee a pension for the entire life. The best part about this plan is its joint-annuity feature where a person can add his spouse. Hence, the benefit will transfer to the spouse once the policyholder passes away.
5 – Pension Plans With Life Insurance
Under this plan, the policyholder can enjoy regular pension coverage and protect his family after death. However, a sizable amount goes to building the pension amount rather than the life insurance fund. The policyholder can avail this option on annuity and certain annuity pension plans. But, it is not possible to do so with immediate annuity pension plans.
6 – Life Unit-linked investment pension plans
A ULIP plan has both life insurance and investment component in equal measure. A portion of the amount is dedicated to life insurance, while the rest is invested debt or equity instruments.
Choosing a suitable pension and term insurance in UAE may be confusing without a financial planner. So, you may reach out to the experts at Life Insurance Bazaar and select the plan that gives you a better future.
