Pension plans from insurance companies are not a great way to save tax be cause of the high charges. Although Ulip charges have been reduced, pension plans still levy high charges on buyers. In comparison, the low-cost NPS is a much better alternative.

The pension plans from insurance companies are also not as tax friendly. Only 33% of the corpus can be withdrawn at the time of maturity and is tax free. The balance 66% has to be compulsorily put in an annuity to get a monthly pension that is fully taxable.

For the NPS, up to 40% of the corpus is tax free. Of the balance amount, only 40% has to be put in an annuity.