Life Annuity

Even after retirement, you would like to maintain your lifestyle by having a regular income. And a smart way to ensure regular income after retirement is by investing in a Life Annuity plan. A life annuity is an insurance plan that has a feature of a predetermined periodic payout until the death of the insured. The plan comes with attractive premium offers and several other exciting features. Read this post further and learn more about life annuity.

Types of Life Annuity

There are different types of life annuities, each has its benefits and purpose. Know more about them below:

Immediate Annuity –  This type of life annuity provides immediate income to the insured as soon as he/she invests. After the death of the insured, the nominee will receive a regular income.

Guaranteed Annuity –  Receive annuity payout for a fixed period under this plan, and in case you die, your nominee will receive the same.

Fixed Annuity – A fixed annuity will be paid for a fixed period, and if the insured dies during the annuity payout, the nominee will receive it on his/her behalf.

Variable Annuity –  Variable annuity plan provides your payout based on the market rate, so your income may fluctuate with the up and down of the market. This plan is suitable for those who are ready to take risks with their investment.

Joint Annuity – A joint annuity provides payouts until both the annuitants die. Sometimes the amount of annuity may reduce after the death of the first annuitant. When both the annuitants die, the nominee will receive the annuity payout.

Deferred Annuity – Under this annuity plan, your money will be invested for a period before the retirement period starts. This type of life annuity is suitable for those who are still working and have some years of work left before retirement.

Immediate Life Annuity with Return of Purchase Price Option – This plan is available on both single life and joint-life annuity. The annuity will be payable as long as the annuitant is alive.

Deferred Life Annuity with Return of Purchase Price Option – This plan is available on both single life and joint-life annuity. The annuity will be payable post deferment period as long as the annuitant is alive.

Popular Life Annuity Plans in India

The following are some of the popular Life Annuity plans, so compare their offers and select the one for yourself –

HDFC Life Pension Guaranteed Plan

This is a single premium non-linked non-participating annuity plan that provides the following benefits to you –

1. Single or Joint Life option
2. An immediate or deferred annuity option
3. Annuity payout option – monthly, quarterly, half-yearly or yearly
4. Return of Purchase Price option
5. Top Up option

Note – Minimum entry age for HDFC Life Pension Guaranteed Plan is 30 years.

ICICI Prudential Easy Retirement Plan

A unit-linked non-participating individual pension plan with benefits like –

1. Assured Benefit payable at the maturity date
2. Pay premiums for five years or ten years or throughout the policy term, as per your choice
3. Pension Booster available after 10th policy year or every 5th policy year, up to 5% of the average daily total Fund Value

At the time of retirement, you can choose your annuity payout from the following:

1. Life Annuity
2. Life Annuity with Return of Purchase Price
3. Life Annuity guaranteed for 5, 10 or 15 years & life thereafter
4. Joint Life, Last Survivor without Return of Purchase Price
5. Joint Life, Last Survivor with Return of Purchase Price
6. Life Annuity with Return of 50% Purchase Price
7. Life Annuity with Return of 75% Purchase Price
8. Life Annuity with Return of Balance Purchase Price
9. Life Annuity with an annual increase of 5%
10. Joint Life, Last Survivor with Return of Purchase Price in Parts
11. Life Annuity with Return of Purchase Price on Critical Illness, Permanent Disability due to Accident or Death

Note – The minimum entry age is 35 years for ICICI Prudential Easy Retirement Plan, and the premium starts from INR 48,000.

TATA AIA Life Insurance Smart Annuity Plan

A single premium non-linked non-participating individual annuity plan that provides benefits like –

1. Flexible annuity options – Immediate Life Annuity, Immediate Life Annuity with Return of Purchase Price, Deferred Life Annuity with Return of Purchase Price
2. Option of Single or Joint Life annuity
3. Flexible Annuity Payouts
4. Option of Top-up to enhance annuity payout

Note – Your age should be at least 45 if you want to purchase TATA AIA Life Insurance Smart Annuity Plan. The minimum annuity purchase price payable to the nominee at the time of death is INR 2,06,155

Max Life Guaranteed Lifetime Income Plan

Under this annuity plan, you will get the option of both immediate and deferred income along with the following benefits –

1. Guaranteed income throughout the lifetime
2. Payout intervals – yearly, half-yearly, quarterly, monthly
3. Minimum 105% of the purchase price will be payable to the nominee if you opt for the deferred income option

Note – The minimum entry age – 50 years (Immediate Income) & 45 years (Deferred Income)

Aditya Birla Sun Life Immediate Annuity Plan

Aditya Birla Sun Life Insurance is an immediate annuity plan that gives you regular income during the retirement years. This plan provides you the following benefits –

1. 6 annuity options
2. Guaranteed income throughout the life
3. Annuity payout as per your choice – monthly, quarterly, half-yearly or yearly
4. No medical tests

Note – Your entry age should be at least 30 years and a maximum of 90 years.

SBI Life Annuity Plus

SBI Life Annuity Plus is a retirement scheme that offers –

1. Steady income
2. Fixed annuity throughout
3. A comprehensive range of annuity options

Note – The minimum entry age is 45 years for this annuity plan.