What exactly is an annuity plan? Naval Goel explains

"So, it basically ensures that till whatever time you live, you get that income because usually what happens is during retirement, you do not know how many years of money you will need because let us say somebody who lives till 70 and at the age of 60, if he is planning retirement, he would not know that he will live for 10 years or 20 years," says Naval Goel, PolicyX.com...

So, usually for retirement, it is a very good product because if you have a corpus which you have saved for your retirement planning, you can basically give that corpus to an insurance company and they will pay you your annual or monthly income, whatever you choose...

So, annuity product takes away that kind of risk basically if you outlive or if you die too soon, that kind of risk is mitigated because once you pay that money, you know how much income you are going to get every month and you can basically plan your expenses accordingly...

If you have a portfolio where you have taken care of your post-retirement life, it is good for you but then if really one wants to bank on an annuity or if one has an investment portfolio and still wants to buy an annuity, what are the things in mind and especially what are the red flags that one needs to keep in mind because a lot of time what people experience is the person selling an annuity product or insurance plan like this do not give them all information?.

So first thing that one should do is first to analyze whether he needs an annuity plan or not because if you have a lot of money then these kind of plans are not suitable for you but if you have reasonable amount of money only for your retirement yes these plans can provide you that freedom that your retirement corpus will not exhaust before time...

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