An annuity is a pension product which aims to offer financial security to individuals in their old age through assured cash flow at regular intervals. Based on a sum of money invested by an individual in advance, the insurance company will pay a regular sum of money. Annuity Insurance offers cover against any financial risk such as- income replacement, inflation and investment risk etc. that arise during old age/retirement. Features
  • By paying a sum of money on a one-time basis as premium, individuals falling within the age group of 40 – 100 years can avail an Annuity Insurance policy.
  • Annuities ensure that the insured is financially protected in old age as a specific amount is paid out as pension through this scheme.
  • Payment of annuity can be done on an annual, half-yearly, monthly or quarterly basis, as chosen by the policy holder.
Types Annuities are of following types:
  1. Fixed Annuity:
A fixed annuity pays out a fixed rate of return on your money. It provides a guaranteed income stream throughout the policy term, suitable for a person with low-risk appetite.
  1. Variable Annuity:
A variable annuity pays out a variable rate of return on your money. The income stream usually has a minimum guaranteed amount but can increase depending on the performance of the underlying investments that you select.
  1. Fixed Index Annuity:
A fixed index annuity pays out a rate of return on your money based on a specific equity-based index such as-Nifty 50. It serves as a hybrid of both fixed and variable annuities, providing a minimum guaranteed return which may increase subject to gains in the attached index.
  1. Immediate Annuity:
Immediate Annuity Insurance policies offer an assured payout on a regular basis, once a lump sum premium is paid, which commences immediately. It is suitable for someone who has just retired and now requires a regular income stream in place of his salary.
  1. Deferred Annuity:
Under Deferred Annuity income stream commences at a future date. You are required to pay premiums regularly for a specified period. After the period ends, the insurance company will start giving payments regularly according to the agreement. Pros/Benefits
  • Annuities provide guaranteed periodic payments for as long as you live. It covers you from the risk of “living too long”.
  • Annuities also protect you from inflation. By paying a small amount of extra premium, the amount of annuity can be increased in relation to the cost of living.
  • The amount invested in annuities is secured. You (or your heirs) will certainly get back the amount invested in the annuities.
  • Annuities also eliminate re-investment risk by guaranteeing the same rate of payout for life, irrespective of high or low-interest rates prevailing in the market.
  • You can avail an income tax exemption under section 80CCC of the Income Tax Act, 2016 as well. You can commute up to 1/3rd of the policy proceeds and is exempted from taxation. The sum assured upon death of the insured is also not taxable.
  • The cost of annuities is high. You have to pay high premiums for a considerable time to get the benefits of annuities.
  • The returns on annuities is generally low, sometimes lower than inflation. In such a situation investment in other avenues such as- mutual funds, stocks etc. is a better option than annuities.
  • Annuities are largely inflexible. You cannot have access to the sum of money spent on the purchase of annuity. In other words, once you have entered into an annuity contract, you cannot change your mind and cash it.
Steps to buy annuity plan online Below listed are the five simple steps you need to follow while buying an annuity plan online: Step-1:- You need to log in to company’s website from which you need to buy the annuity plan. Step-2:- Next, You need to choose the required annuity plan from the available ones, by comparing the features of each and every plan. Step-3:- After that, you need to choose the coverage/ sum assured and provide all the details. Step-4:- Now the premium will be determined by the insurance company on the basis of the details filled by you. Step-5:- You are then required to pay the premium online using debit card, credit card or net banking facilities available and the policy will be issued. Factors to be considered while choosing an annuity plan:
  • Your current age
  • Your retirement age
  • Life expectancy
  • Inflation
  • Your investment style
  • Your living standard
  • Your spending
Do’s and Don’ts in annuity Plan: Following are the Do’s and Don’ts related to your Annuity Plan. Many people have found that owning an annuity provides a more secure financial future. But, as with any major purchase, you need to thoroughly understand what you’re about to buy. It is advisable to consult a properly licensed and credentialed Certified Financial Planner to know the plan which is best fit for you.  


CMT Level 1 Study Material

As a matter of fact you can watch live market trading that helps you to connect with CMT. Join a Technical Analysis Course which works on real time markets by using tools & techniques . That’ll give you behavioural understanding of real time Share market. Understanding the money management by real time trading or investment activity. As we know CMT is an MCQ Exam & ask question on application level. Create short notes of Course Content. Get PPT based Short Notes & note interpretation of tools & Techniques on technical analysis. Short Notes help you out to quick revision at the CMT exam time. CMT Books have very complicated language & course content is not properly aligned as it takes topics from various books of different writers. 

So we have to take individual topics and understand concepts in simple, Concise and Clear manner. Take content from various books or websites like Investopedia or Stock Charts on Each Topic for in-depth understanding. Apply tools & techniques with the help of Technical analysis or trading software’s. Read Books twice as MCQ can be created from a single line. while study mark important topics.