Best Deferred Annuity Plans

Amidst a variety of investment plans in the market, a deferred annuity plan is one that helps generate pension for you. This annuity plan provides you regular income during your retirement years for a specific period as per your choice. You’ll start receiving deferred income as per your vesting age chosen at the inception of the policy. Since there are so many deferred annuity plans in the market, choosing the best from them can be a tricky affair for you. This is where we can guide you towards choosing the best deferred annuity plan.

We’ve shortlisted some plans that offer guaranteed payouts to secure your retirement. Besides, impressive annuity payouts and flexible premium payment & policy terms make them the most sought-after ones in the market. Read this page and know more about the best deferred annuity plans available in India.

Which are the Best Deferred Annuity Plans?

The following are the best deferred annuity plans that will help you financially during your retirement years –

ICICI Pru Guaranteed Pension Plan

ICICI Pru Guaranteed Pension Plan provides regular income to the insured during the retirement years for hassle-free living. Here. you can choose the annuity you wish to receive, or the purchase price (premium) you wish to pay. You can choose to receive your deferred pension from 1 to 10 years. The following deferred annuity options are available under this plan –

Deferred Single life with return of purchase price: Under this option, you’ll get the annuity payout after the end of the deferment period as chosen by you. In case of death during the deferment period, the insurer shall pay higher of the following to the nominee –

• Purchase Price + Accrued Guaranteed Additions
• 105% of the Purchase Price

In case of death after the deferment period, the insurer shall pay higher of the following –

• Purchase Price + Accrued Guaranteed Additions – Total annuity paid out till the date of intimation of death
• Purchase Price

Deferred Joint life with return of purchase price: The annuity shall be payable under this option after the end of the deferment period as long as either of the annuitants is alive. In case of death of the last survivor during the deferment period, the insurer shall pay higher of the following to the nominee –

• Purchase Price + Accrued Guaranteed Additions
• 105% of Purchase Price

Whereas, in case of death after the deferment period, the insurer shall pay higher of the following –

• Purchase Price + Accrued Guaranteed Additions – Total annuity paid out till date of intimation of death
• Purchase Price
• Deferred single life with return of purchase price on Critical illness or Permanent Disability due to accident or Death

You’ll receive the annuity payouts after the deferment period as chosen at inception. And it will continue until you survive before the age of 80 years. A lump sum benefit is payable in case of death or occurrence of any of the seven specified critical illnesses or permanent disability due to accident.

Note: You can lock in the current interest rates for the annuity payout after the end of the deferment period. The guaranteed additions will start accruing at the end of every policy month during the deferment period and are equal to the total annuity payable in a policy year/12.

LIC’s New Jeevan Nidhi Plan

On vesting of the LIC’s New Jeevan Nidhi Plan, you’ll get the option to purchase a new Single Premium deferred pension product from Life Insurance Corporation of India. Under this option, your entire proceeds will be utilized to purchase a new single premium deferred pension product, provided you meet the eligibility criteria. No commutation of the benefit amount is available on policy vesting if you choose this option. You need to notify the insurer about the annuity option at least six months before the date of vesting.

In case of death during the first five policy years, the insurer shall pay the basic sum assured along with accrued guaranteed additions to the nominee. Whereas, if the death occurs after the first five policy years, the basic sum assured along with accrued guaranteed additions, simple reversionary and final additional bonus (if any) shall be paid to the nominee. The nominee can receive the death benefit as a lump sum or in the form of an annuity or partly in a lump sum and balance in the form of an annuity.

Note: The total death benefit should not be less than 105% of the total paid premiums

Max Life Guaranteed Lifetime Income Plan

Max Life Guaranteed Lifetime Income Plan helps you get a financially stable lifestyle during your retirement years. With the deferred annuity variant of the plan, you can lock higher annuity rates at present for a risk-free lifelong payout. You’ll get the following annuity options under this plan.

Single Life Deferred Annuity for life (with death benefit): You’ll get a fixed guaranteed income throughout life, after the end of the chosen deferment period. These payouts shall cease on the death of the annuitant.
Joint Life Deferred Annuity for life (with death benefit): Here, the fixed income is payable as long as at least one of the annuitants is alive, after the end of the deferment period. And the payment will cease on the death of the last survivor.

In case of death, the insurer shall pay higher of the following –

• Single Premium + Top-up Premium (if paid during the deferment period) + Accrued Guaranteed Additions – Total annuity payments made till the date of intimation of death (if any)
• 105% of (Single Premium + Top-up premium)

Note: The death benefit for top-up premiums shall be paid after the end of the deferment period. The guaranteed additions shall accrue monthly till the end of the deferment period.

HDFC Life Guaranteed Pension Plan

Under the HDFC Life Guaranteed Pension Plan, you’ll get the option of Deferred Life Annuity with Return of Purchase Price. This deferred annuity option is available on both single life and joint life basis. The annuity rate will be the same as chosen at the inception of the policy.

For Single Life – The annuity is payable to you after the end of the deferment period as per the chosen payout frequency.

For Joint Life – The annuity is payable after the end of the deferment period as long as either of the annuitants is alive.

In case of death, the insurer shall pay higher of the following in a lump sum to the nominee –

• Purchase Price + Guaranteed Additions – Total Annuity Payouts till the date of death
• 110% of the Purchase Price

Guaranteed Additions = Purchase Price x Annuity Rate/12

The guaranteed additions start accruing from the end of every policy month and stop at the end of the deferment period.