Income after retirement: Risks and rewards of deferred annuity plans

Allocate just enough to generate a basic retirement income; over-investing in this illiquid product can backfire

Several insurance companies, including the Life Insurance Corporation (LIC) of India, have launched deferred annuity plans in the past few weeks. Customers need to understand the role these plans can play in their retirement portfolio before investing in them.    

Fixed, lifelong income
 

These plans offer a reliable income stream during retirement. “This is the only product that can provide a guaranteed income during retirement for as long as the customer lives,” says Srinivas Balasubramanian, head of products, ICICI Prudential Life Insurance.
 

With average life expectancy increasing, most people are uncertain whether their savings can sustain them during their retirement.