Insurance companies to launch Saral Pension Yojana on 1 April
While the premium may differ from insurer to insurer, features of the Saral Pension plan will be similar
New Delhi: Saral Pension Yojana, a standard annuity product prefixed by the insurer’s name, will be available with all insurers April 1, 2021 onward. The plan offers two types of annuities. Insurance Regulatory and Development Authority of India (Irdai), on January 25 had directed insurance companies to launch the standard annuity product to have uniformity across insurers. While the premium may differ from insurer to insurer, features of the Saral Pension plan will be similar.
What is annuity
Amount paid to the insured on regular intervals by an insurance company against the premiums or lump sum deposited, is known as an annuity. Annuity plans offer regular income to the insured post-retirement and can be useful for private sector employees particularly.
Immediate annuity plan
Saral Pension plan comes with an immediate annuity option that offers immediate pension to the subscriber as soon as he signs up. The subscriber can choose from monthly, quarterly and half-yearly options.
Pension options
Saral Pension is a single premium pension plan i.e. the subscriber will have to pay the entire premium at the time of buying the policy and he will receive a fixed lifetime pension. The plan comes with two options–life annuity and joint-life annuity. The life annuity option offers a 100% return of purchase price to the insured. This option will have only one annuitant and after his death, the base premium will be given to the nominee. The joint-life annuity option will have two annuitants and in case of death of the primary annuitant, the secondary annuitant will continue receiving the pension. After the death of the secondary annuitant, nominee receives the base price of the plan.
Eligibility
Anyone aged between 40 years and 80 years can sign up for the policy. While there is no cap on the maximum investment, the minimum amount is fixed at Rs 1,000 per month, Rs 3,000 quarterly, and so on. In case of contingencies and critical illness, the subscriber can withdraw a lump sum amount.
Loan option
The pension plan also allows the subscriber to avail loan 6 months after signing up. However, the proportion between the loan amount and investment may vary from insurer to insurer.