An annuity converts a lump sum into a stream of fixed periodic payments - useful for guaranteed retirement income, structured payouts and lottery / settlement planning. This calculator computes the periodic payout for any combination of corpus, rate and tenure.
Payout frequency
Periodic payout
₹35,822
monthly
Total received
₹85,97,173
Over 20 years
Interest portion
₹35,97,173
Insurer's earnings on corpus
What you receive vs what you paid
Real-world annuities have many flavours - immediate, deferred, joint life, with return of corpus. Each has different rates and payouts. Use the rate quoted by your insurer for accurate results. All annuity income is taxable in India.
Une partie du contenu est encore affichée en anglais.
An annuity is a financial product that converts a lump-sum payment into a guaranteed stream of periodic income - monthly, quarterly or annually - for either a fixed period or for life. In India, annuities are issued by insurance companies (LIC, HDFC Life, SBI Life, ICICI Prudential, Max Life and others) under the IRDAI regulatory framework. Under the NPS framework, retirees are required to use at least 40% of their accumulated corpus to purchase an annuity from a registered insurer - making annuity math a near-universal retirement concern for Indian NPS subscribers.
Annuity rates in India have hovered between 5-7% for the past decade. That's lower than what you can typically earn from a balanced mix of FDs, SCSS and conservative mutual funds (7-9% blended) - but you give up the certainty of those returns in exchange for the guaranteed payout for life. The trade-off favours annuities for retirees who fear running out of money, and disfavours them for retirees who have the discipline and confidence to self-manage their corpus.
Enter the annuity corpus (lump-sum invested).
Set the expected annual rate the annuity provider offers (5-7% in India).
Choose the payout duration in years.
Pick monthly or annual payout frequency.
Read the periodic payment and the total received over the term.
The corpus is the present value of all future payments. Solving the standard annuity formula gives the periodic payment that fully exhausts the corpus over the chosen period at the chosen rate. The math is identical to amortising a loan - the corpus is your 'loan to the insurer' and the payment is the EMI you receive back.
Payment = Corpus × r / [1 − (1 + r)^−n]
The annuity formula Payment = Corpus × r / [1 − (1 + r)^−n] is the same math as a loan EMI in reverse. Instead of you paying the bank for n periods on a loan they give you, you give the insurer a lump-sum and they pay you back for n periods. The insurer earns the spread between their investment return on your premium and the rate they promise you - typically 1-2%.
Annuity variants in India include: Immediate Annuity (pays from the start), Deferred Annuity (pays starting at a future date), Level Annuity (fixed payments forever), Inflation-Indexed Annuity (rising payments), Joint-Life Annuity (continues to spouse after death), and Return-of-Purchase-Price Annuity (returns the original lump-sum to your nominee on death, with slightly lower payouts). Each has different rate structures - joint-life and ROP variants pay 0.5-1.5% less than level lifetime annuities.
Annuity rates depend on age, gender, payout option and prevailing interest rates. Older buyers get higher annuity rates because the actuarial life expectancy is shorter - a 65-year-old gets roughly 0.5-1% more than a 60-year-old buying the same product. Female annuitants get slightly lower rates (longer life expectancy on average). Joint-life lifetime options give the lowest rates because two lives are being insured.
Monthly payout ≈ ₹35,800. Total received over 20 years: ₹85.9 lakh. The insurer earns interest on your shrinking corpus and converts it to a fixed monthly cheque. Net of 30% tax, your effective post-tax income is roughly ₹25,000/month - make sure your retirement budget fits.
Monthly payout ≈ ₹46,000 (lifetime - paid as long as you live, no guarantee on total). Same corpus on a 25-year fixed-period at 6.5% would yield ≈ ₹68,000/month - but stops after 25 years. The lower lifetime rate is the cost of insurance against living to 95.
LIC and private insurers offer 5-7% on immediate annuities for fixed-period or lifetime payouts. Lifetime annuities pay slightly less because the payout depends on life expectancy.
Fixed-period guarantees payout for, say, 20 years. Lifetime pays as long as you live, with options for spouse continuation. Lifetime gives peace of mind; fixed-period gives a clearer total.
Yes. Annuity income from NPS-bought annuities is fully taxable as salary income. Pension from EPS is similarly taxable. Plan for the tax - your effective net is lower than the gross payout.
Annuities give 5-6% guaranteed; debt SWP gives 7% but with credit risk; equity SWP gives 9-12% but with volatility. Many retirees split - annuity for essentials (food, rent), SWP for discretionary.
In a level annuity yes. Inflation-protected annuities increase the payout each year by a fixed % - but the starting amount is lower. Choose based on your expected lifespan.
Most are non-surrenderable once started. Some have a partial-surrender provision but penalties are steep. Buy only after clarity on your long-term needs.
Indian financial products - home loans, fixed deposits, mutual funds, NPS, insurance - each carry their own quirks: monthly reducing balance vs flat-rate interest, quarterly vs monthly compounding, indexation on capital gains, the choice between the old and new tax regime. We design every finance calculator to use the formula that an Indian bank, AMC, or insurer would actually use, and to surface the assumptions in plain English so you can audit the result against your own statement.
Use this calculator alongside the EMI, SIP and inflation calculators to plan your money holistically. A standalone EMI number means little until you compare it with your in-hand salary, your existing debt-to-income ratio, and the impact of inflation on the real cost of the loan. The related-tool grid below makes it one click to chain these analyses together.
The Annuity Calculator is part of the Finance suite on Online Calculator Tools, alongside 6 related calculators. All tools share the same UI patterns, the same privacy-first rendering (nothing is sent to a server), and the same commitment to showing the formula and assumptions behind every result.
