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Your annuity income is reduced if you transfer principle to a nominee

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<p>The majority of National Pension System (NPS) participants choose the lifelong annuity with purchase price reimbursement plan. Even if the family receives their investment back, the annuity amount drops dramatically. The annuity with no purchase price return is the better option for parents whose children are self-sufficient since the payment is much larger.</p>
<p><img decoding=”async” class=”alignnone wp-image-517610″ src=”https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-your-annuity-income-is-reduced-if-you-transfer-principle-to-a-nominee-rupee-9-11zo-750×422.jpg” alt=”theindiaprint.com your annuity income is reduced if you transfer principle to a nominee rupee 9 11zo” width=”997″ height=”562″ title=”Your annuity income is reduced if you transfer principle to a nominee 3″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-your-annuity-income-is-reduced-if-you-transfer-principle-to-a-nominee-rupee-9-11zo-750×422.jpg 750w, https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-your-annuity-income-is-reduced-if-you-transfer-principle-to-a-nominee-rupee-9-11zo-768×432.jpg 768w, https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-your-annuity-income-is-reduced-if-you-transfer-principle-to-a-nominee-rupee-9-11zo-390×220.jpg 390w, https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-your-annuity-income-is-reduced-if-you-transfer-principle-to-a-nominee-rupee-9-11zo.jpg 1024w” sizes=”(max-width: 997px) 100vw, 997px” /></p>
<p>For example, a sixty-year-old private sector subscriber would get Rs 11,876 per month if he invests Rs 20 lakh in Max Life Insurance’s return of purchase price option. On the other hand, it would cost Rs 15,238 every month if he chooses not to get his purchase money back.</p>
<p>The investor’s demands and preferences have a role in the decision to choose an annuity. The joint life annuity with return of purchase price plan, in which the spouse receives the benefit, is the second most popular annuity option. Subscribers have access to fifteen life insurance providers that are NPS-empanelled, offering a variety of annuity programs.</p>
<p>Subscribers need to evaluate the interest rates since annuity rates differ throughout insurers. In actuality, the annuity payment amount is set, regardless of changes in interest rates or the state of the equities market. They also need to investigate the assets being managed and the standing of the annuity service provider.</p>
<p>Co-founder of MyWealthGrowth.com Harshad Chetanwala claims that choosing a life annuity with a return of purchase price lowers the annuity amount. Some families just consist of the two of them, or the children are self-sufficient. Because the annuity payment would be larger in such a scenario, it is preferable to choose annuities with no purchase price return.</p>
<p>The subscriber receives a lifelong annuity under the NPS Family Income Option with refund of purchase price. The annuity is payable to the subscriber’s spouse after his death. Annuities are given to the subscriber’s dependent father first, and subsequently to their dependent mother, upon the death of the spouse. The purchase money is given back to the surviving children or the legitimate successor upon the passing of the last annuitant.</p>
<p>When a subscriber purchases a joint life annuity without receiving their purchase money back, they get annuity payments for life, which are then transferred to their spouse at their death. The subscriber’s surviving children or legal heir will not get the purchase money back in the event of the spouse’s death.</p>
<p>When an NPS subscription reaches maturity, the subscriber must purchase an annuity with a minimum of 40% of the corpus. The paid pension is included in income and subject to marginal rate taxation.</p>


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