An annuity plan is a financial product that gives you a regular income—either for a fixed period or for life—in return for a lump sum investment. These plans are usually offered by insurance companies and are commonly used for retirement income.

In India, annuity plans can be:

Immediate annuity: income starts soon after you invest
Deferred annuity: income starts after a chosen waiting period

They help create a steady income after retirement. Depending on the option chosen, they may offer lifetime payouts, income for a fixed number of years, return of purchase price, or joint-life income for spouses.

A common example in India is LIC’s Jeevan Akshay VII plan. An individual pays a lump sum to LIC and, in return, receives a fixed regular income—either for life or for a selected period.

For example, a 60-year-old retiree investing ₹10 lakh in a lifetime annuity option may receive around ₹6,000 to ₹7,000 per month for as long as they live. This provides financial stability after retirement and reduces the risk of running out of money.

• 1980s – Introduction of annuity products by LIC
LIC began offering annuity and pension products to provide retirees with a guaranteed income, making them a popular retirement option

• 1990s–2000s – Growing demand for retirement income
With rising life expectancy and a growing middle class in India, demand for retirement income products increased. Insurers expanded their offerings to include options like joint-life and deferred annuity plans