An annuity refers to a regular and predictable income to support the individual's living expenses in retirement. The annuity amount depends on the investment, chosen annuity plan, and prevailing interest rates. At least 40% of the accumulated corpus must be used to purchase an annuity on superannuation, ensuring a reliable post-retirement income.

At the time of exiting the NPS, subscribers must select an annuity plan from a list of empanelled Annuity Service Providers (ASP) (WEB). ASPs are insurance providers approved by the Pension Fund Regulatory and Development Authority (PFRDA).

There are 5 annuity plans to choose from:

• Annuity for life: The annuity or pension in this plan is payable to the subscriber, also known as an annuitant, at a consistent rate. Upon the death of the annuitant, the policy shall terminate, and no further benefits will be payable.
• Life and survivor: The annuity or pension in this plan is payable to the annuitant and then to their spouse after their demise. Upon the death of the last survivor, the annuity payments will cease, and no further amount will be payable.
• Life and repurchase: The annuity or pension in this plan is payable to the annuitant for their entire life. Upon the death of the annuitant, the annuity is paid out to the nominee, and no further benefits will be payable.
• Return of Premium (RoP) of the annuity: The annuity or pension in this plan is payable to the primary annuitant for their entire life. Upon the primary annuitant's death, the secondary annuitant receives the annuity. Upon the death of the secondary annuitant, the purchase price is paid out to the nominee, and no further benefits will be payable.
• NPS family income: The annuity or pension in this plan is payable to the annuitant and spouse throughout their lifetime. Upon the annuitant's and spouse's death, the annuity would be paid to the subscriber's mother and, after her, to the father. Upon the death of the last survivor, the annuity would be refunded to the annuitant's child/nominee.