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Which are the best annuity plans for my mom with an investment of 15 lakhs?

Milind

Milind Vadjikar  | Answer  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Jan 20, 2025

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
Smit Question by Smit on Jan 20, 2025Hindi
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Dear Sir, Can you please suggest which are the better annuity plans currently in the market. Can you please share with calculations if I invest 15 lakhs (of my mother) how much can we expect monthly return for next 10 years? What happens to the principal amount. Please guide as I have limited knowledge about Annuity plans. Also advise if POMIS or SWP is a better option.

Ans: Hello;

In line with the mandate of this forum to maintain neutrality we are forbidden to take specific names.

The pro's and con's of these avenues for generating retirement income is discussed in the previous answer.

You can have annuity corpus returned to your mother after a certain predecided term or in case life annuity the base sum will be returned to the nominee of annuitant.

Best wishes;
Asked on - Jan 20, 2025 | Answered on Jan 21, 2025
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Thank you sir
Ans: You are welcome!
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

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Mutual Funds, Financial Planning Expert - Answered on Jul 13, 2024

Asked by Anonymous - Jun 02, 2024Hindi
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Hello, I need guidance for 2 concerns, since I have resigned and existing from NPS I have to compulsorily purchase annuity for 80% of NPS value, which companies annuity plan is best, Aditya Sunlife, LIC, India first, ...pls guide as the purchase value will be around 12Lacs. 2- I'll be getting around 10Lacs lumpsum, where to and how to invest considering the fact I may not go back to work ever again and I want this funds to grow and create a good wealth for my future, as of now I am 44 years old. Kindly guide
Ans: Annuity plans provide regular income post-retirement. They are crucial for financial stability when you stop working. Since you need to purchase an annuity for 80% of your NPS value, selecting the right plan is essential.

Evaluating Annuity Providers
Aditya Sun Life
Aditya Sun Life is known for its flexible options. They offer different annuity plans, allowing you to choose based on your needs. Their customer service is also commendable.

LIC (Life Insurance Corporation of India)
LIC is a trusted name in insurance. They provide a variety of annuity plans with reliable returns. LIC’s reputation for stability makes it a popular choice.

IndiaFirst Life Insurance
IndiaFirst offers competitive annuity rates and several plan options. Their plans are designed to cater to diverse needs, ensuring you find a suitable one.

Key Factors to Consider
Annuity Rates
Compare the annuity rates offered by different providers. Higher rates will ensure better returns.

Payout Frequency
Choose between monthly, quarterly, or annual payouts based on your requirements.

Plan Features
Evaluate additional features such as joint life annuity, return of purchase price, and inflation-adjusted payouts.

Customer Service
Good customer service is essential for smooth claim processing and query resolution.

Provider Reputation
Select a provider with a solid reputation for reliability and financial stability.

Investing the Lumpsum of Rs 10 Lakhs
Investment Goals and Risk Tolerance
You’re 44 and planning not to return to work. Your investment strategy should focus on growth and wealth creation. Balancing risk and returns is crucial.

Diversified Portfolio
Mutual Funds
Investing in mutual funds can provide good returns. Actively managed funds are preferable over index funds due to the potential for higher returns through expert management.

Debt Funds
Debt funds offer stable returns with lower risk. They are suitable for preserving capital and earning moderate returns.

Gold
Gold is a reliable investment for diversification. It acts as a hedge against inflation and market volatility.

Equity Funds
Equity funds have higher risk but offer substantial returns over time. Diversify across sectors to mitigate risk.

Regular Funds vs. Direct Funds
Benefits of Regular Funds
Investing through a Certified Financial Planner (CFP) offers several advantages. They provide expert guidance, ongoing portfolio management, and personalized advice. This ensures your investments are well-managed and aligned with your goals.

Disadvantages of Direct Funds
Direct funds may seem cost-effective due to lower expense ratios. However, without professional guidance, you may make suboptimal investment decisions, potentially affecting your returns.

Investment Strategy
Systematic Investment Plan (SIP)
Consider setting up SIPs for consistent investment in mutual funds. This mitigates market volatility and promotes disciplined investing.

Asset Allocation
Maintain a balanced mix of equity, debt, and gold. This diversification reduces risk and enhances potential returns.

Rebalancing
Regularly review and rebalance your portfolio to align with your risk tolerance and financial goals.

Risk Management
Emergency Fund
Set aside a portion of your lump sum as an emergency fund. This ensures liquidity for unforeseen expenses.

Insurance
Ensure you have adequate health and life insurance coverage. This protects you and your family from financial hardships in case of emergencies.

Long-term Perspective
Wealth Creation
Investing with a long-term perspective is key to wealth creation. Patience and consistent investing yield significant returns over time.

Avoiding Market Timing
Trying to time the market can be risky. Instead, focus on staying invested through market cycles for better outcomes.

Final Insights
Investing your NPS proceeds and lump sum wisely can secure your financial future. Evaluate annuity providers based on rates, features, and reputation. For your lump sum, diversify across mutual funds, debt funds, and gold. Engage a Certified Financial Planner for professional guidance, ensuring your investments are aligned with your goals. Maintain a balanced portfolio and focus on long-term wealth creation.

By taking these steps, you can build a robust financial plan that supports your aspirations and ensures a secure future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Milind

Milind Vadjikar  | Answer  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 04, 2024

Asked by Anonymous - Nov 04, 2024Hindi
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What are different types of annuity plans. Do we have plan which gives fixed income till I live and then principle is return to my nominee. If I have 3 Cr , what max return per month I can get ? And is this tax free ?
Ans: Hello;

Annuities are types of plans where you make a lump sum payment and get a regular income for a certain period of time or for life.

There are primarily two types of annuities:

1. Immediate annuity
This is a type of annuity plan that provides you with a guaranteed regular income immediately after you pay the lump sum premium.

2. Deferred annuity
In a deferred annuity plan, your income starts at a later date and you can choose when you want the regular income to start.

Based on type of regular monthly payments annuities could also be classified as Fixed annuity and Variable annuity.

Below are the various options available in an annuity plan:

A. Life annuity: In this option, you receive annuity for life. The frequency of payments is usually pre-decided by you at the time of the purchase of the policy.

B. Joint life annuity: This is similar to a life annuity. In this option, you receive annuity payments for life. In your absence, your spouse continues to receive annuity payments for life.

C. Life annuity with return of purchase price: This provides you annuity payments for life. In case of an unfortunate event, your nominee will receive the amount you paid at the time of the purchase of the policy.

D. Annuity payable for a pre-decided term: This provides you the option to choose the duration for which you would want to receive annuity payments. The period can be 5 years, 10 years, or more.

Yes plans are available which can pay provide you fixed income and return of purchase price (principle) to your nominee.

With 3 Cr corpus you may expect 1.5 L (pre-tax) per month payout considering 6% annuity rate. This varies from company to company and if you shop around you may get a better rate then the one considered here.

This is like pension income and is taxable income as per your age and income slab.

Best wishes;

..Read more

Milind

Milind Vadjikar  | Answer  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Feb 10, 2025

Asked by Anonymous - Feb 10, 2025Hindi
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I am 51 single, divorced and have one little sister who is 32. Recently I lost my job, and I am not in the mood to search for a new one. I am in the process of making arrangement to fulfill my monthly needs. I am holding the NPS which has a small corpus of 5 lacs in tier 1 and 45k in tier 2. Now I want to completely exit from the NPS. Now I must compulsorily accept the 20% withdrawal and 80% annuity. I have a few queries below. 1. Should I consider buying 100% annuity. 20% withdrawal does not make sense 2. Should I consider putting 1.5 lacs more to enhance the annuity (The corpus will become 7 lacs approx.). 3. Should I consider taking out the annuity on a yearly basis (Please explain Its pros and cons), since it offers more benefit. 4. Should I consider the Shriram life insurance. 5. Will it be safe to consider Shriram life insurance for life long future annuity. It offers the highest annuity. 6. Should I consider Annuity for Life with ROP - Subscriber will get annuity for lifetime and on death of the Subscriber, payment of annuity ceases & 100% of the purchase price will be returned to the nominee(s). The annual offer is 49,063.00 (7.01%) 7. Should I consider Annuity for Life without ROP - Subscriber will get annuity for lifetime and on death of the Subscriber, payment of annuity ceases, and no further amount will be payable. The annual offer is 58,112.00 (8.30%)
Ans: Hello;

Point wise answers to your queries as given below:

1. Yes.
2. Yes.
3. If you do monthly annuity the rate will be lower but you get monthly payouts. In yearly the rate will higher but only one shot payment per year so it depends on your preference.

4. Cannot comment on suitability of xyz firm.

5. Consider an insurer which has good capital adequacy, growing profitable business, preferably listed, reputation of the owner/group apart from decent annuity rates on offer.

6 & 7. My suggestion would be to opt for annuity for life with ROP to your nominee. Ultimately it is your call.

Please have adequate healthcare insurance cover.

Best wishes;

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I had commerce and maths in 12and now Want to do graduation in business analytics . Which college should I prefer in Jaipur as well as pan india. Pls Give suggestions for *both* Don't want to do ca cfa Cs cma and other such courses. College should have various societies, cultural activities like debates and modern age competitions with strong academic excellency and placement records. Stream :commerce with maths Should be affordable (even by availability scholarship family annual income 12 L) Like Krea university offering scholarship for the same income grp . 12% =86 No entrance exam given Suggest college which is accepting admissions right now also.
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The following ten institutions accept 12th commerce + maths applicants now, offer vibrant student life (debate clubs, data challenges, cultural fests), and provide need-based or merit scholarships similar to Krea’s model:

ICFAI University, Jaipur – BBA (Business Analytics) with UGC approval, societies for finance, quizzing, tech fests, campus recruitment rates around 80% and scholarships up to 50% for incomes ≤ ?12 LPA.

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JECRC University, Jaipur – BBA (Hons) Business Analytics endorsed by Institute of Analytics, robust cultural societies, data-hackathons, ~75% campus placements, fee waivers for eligible candidates.

Manipal University Jaipur – BBA (Business Analytics) with NAAC A+ ranking, vibrant student council, intercollegiate festivals, 85% placement assistance, need-based financial aid.

Vivekananda Global University, Jaipur – BBA (Business Analytics) in a UGC-approved private university, multiple entrepreneurship and analytics clubs, ~70% placement, scholarships for middle-income families.

JAIN University, Bangalore – BBA Business Analytics & Intelligence, industry-aligned labs, cultural and hackathon events, ~90% placement in analytics roles, merit-cum-need scholarships.

Christ University, Bangalore – BBA Strategy & Business Analytics (Hons) with research options, national debating society, business clubs, ~88% placement, scholarships up to 50% for ?12 LPA income.

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Woxsen University, Hyderabad – BBA (Business Analytics), collaborative start-up incubator, cultural council, ~80% placement, substantial scholarships for middle-income families.

Recommendation: For the strongest blend of analytics focus, campus life, and scholarships, prioritize ICFAI University Jaipur and IBS Jaipur for their immediate admission cycles and generous aid. Next consider JAIN University and Christ University for pan-India exposure and vibrant societies, followed by JECRC University for its analytics accreditation and Jaipur-based convenience. All the BEST for a Prosperous Future!

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Nayagam P

Nayagam P P  |9019 Answers  |Ask -

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Asked by Anonymous - Jul 17, 2025Hindi
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Hi sir my son is in 10th now he opts for iit and it woukd be challenging so i jave suggested him to go with bits and iiit too. In this case what are exams he has to go through At the same time he has taken kannada as 2nd language in 10th and wants to opt sanskrit in 11th and 12th for scoring purpose will be a wise decision as we have a option to answer the paper in english to please advise
Ans: For a 10th grade student aspiring to join IIT, BITS, and IIITs, understanding the complete examination roadmap and making strategic language choices is crucial for maximizing overall academic performance. Regarding language selection, switching from Kannada to Sanskrit in Classes 11 and 12 offers compelling advantages for scoring purposes. Sanskrit consistently demonstrates superior scoring potential compared to regional languages, with 2,758 students achieving perfect 100 marks in Sanskrit during recent CBSE examinations, significantly higher than other languages. Educational experts confirm Sanskrit's reputation as a "scoring and simple subject" with compact syllabi, straightforward question patterns, and high success rates, as evidenced by Karnataka students historically choosing Sanskrit for easy scoring compared to Kannada, English, or Hindi. The Sanskrit examination format includes multiple-choice questions with given options, fill-in-the-blank grammatical forms, and structured essay questions—all conducive to higher marks with proper preparation. Additionally, Sanskrit papers can be answered in English in many examination systems, eliminating language barriers while maintaining the scoring advantages. The strategic benefit extends beyond board examinations, as Sanskrit knowledge proves valuable for competitive examinations like UPSC, where it's considered among the most scoring optional subjects.

Recommendation: Your son should proceed with JEE Main and Advanced preparation while registering for BITSAT and researching IIIT-specific entrance examinations like UGEE. Switching to Sanskrit in Classes 11 and 12 is strategically wise given its consistent high-scoring potential, simplified examination patterns, and compatibility with English-medium answering, ultimately supporting his overall academic percentage crucial for engineering admission success. All the BEST for a Prosperous Future!

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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