A Pension Plan With Life-Long Guaranteed Income For Your Retirement Days

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Investment
oi-Vipul Das

| Published: Tuesday, September 7, 2021, 13:33 [IST]

A pension plan is the one to consider if you and your spouse want a monthly guaranteed income for the longest time possible to secure a brighter tomorrow. Aviva Life Insurance Company has launched Aviva Saral Pension for completely stress-free retirement days. It’s a sort of retirement plan that can offer a steady income life-long as well as financial stability for your family. Among the most appealing features of this plan is the one-time payment to get guaranteed life-long regular income flow, the joint-life alternative, which also guarantees your spouse’s future income, the possibility of loan against policy after the first 6 months, tax benefits centered on prevailing tax legislation. Here are the benefits of Aviva Saral Pension Plan that can be a part of personal finance on your post-retirement days.

Benefits

Following are the benefits of Aviva Saral Pension Plan that you need to know about:

Survival Benefit: The plan offers two types of survival benefit i.e. single-life annuity and joint-life annuity. Under the single life annuity, option annuity payments will be provided in installments as long as the annuitant survives, according to the mode selected. Under the joint-life annuity option For as long as the primary and/or secondary annuitants are alive, annuity payments will be issued in installments according to the specified method.

Tax benefit: Under Section 80CCC and Section 10(10A)(iii) of the Income Tax Act of 1961, the premiums paid and claims filed are eligible for tax deductions.

Death benefit: Aviva Saral Pension Plan offers two types of death benefits i.e. single-life annuity and joint-life annuity. Under the single life annuity option, the annuity payments would be stopped immediately upon the annuitant’s death, and the nominees/legal heirs would get 100% of the purchase amount. Whereas under the joint-life annuity option as long as one of the annuitants remains alive after the first death of either of the covered lives, 100 percent of the annuity amount will be provided and annuity payments would stop immediately upon the death of the last survivor, and the purchase price would be paid to the nominee(s)/legal heirs.

Loan option: Loan can be availed at any time after six months from the date of commencement of the policy. The maximum amount of loan that can be granted under the policy shall be such that the effective annual interest amount payable on the loan should not surpass 50% of the annual annuity amount payable under the policy. Under the joint-life option, the loan can be availed by the primary annuitant and on the death of the primary annuitant, it can be availed by the secondary annuitant.

Payout options: Apart from regular life-long income through annuity payout and the possibility to cover yourself and your spouse the pension plan also allows the option to receive annuity payments on a monthly, quarterly, half-yearly, or annual basis.

Plan options

Aviva Saral Pension Plan offers two types of plan options i.e. single life and joint life. Both the options have different types of premium benefits which are as follows:

Single Life: Under this option, the minimum entry age is 40 years and the maximum entry age is capped at 80 years. The purchase price of the annuity would be a single premium. For a minimum yearly annuity payment of Rs 12,000, the maximum single premium is Rs 264,959.

Joint life: Under this option, the minimum and maximum entry age are the same as single life. The annuity’s purchase price would be a single premium. The maximum single premium under this option is Rs 260,813; for a minimum annual annuity amount of Rs 12,000.

Surrender option: According to the announcement of Aviva Life Insurance Company the policy can be surrendered any time after six months from the date of commencement, if the annuitant or the spouse or any of the children of the annuitant is diagnosed as suffering from any of the critical illnesses specified in the Policy Document, based on the documents produced to the satisfaction of the medical examiner of the Insurer. The list of critical illnesses may be revised from time to time by the Authority as needed. On approval of surrender, 95% of the Purchase Price shall be paid to the annuitant, subject to deduction of outstanding loan amount and loan interest, if any. On payment of surrender value, the policy stands terminated.

Freelook period: Following receipt of the Policy Document, this is an option for reviewing the policy. The insured person has a 15-day (or 30-day in the case of electronic policies) free look period, which is permitted in line with the insurer’s issued disclosures.

Annuity Payout

This saral pension plan offers two types of annuity options i.e. Life Annuity with a 100% Return of Purchase Price (ROP) on the death of the last survivor, and Joint Life Last Survivor Annuity with a 100% Return of Purchase Price (ROP) on the death of the last survivor. An example of an Annuity Payout in Arrear for a Purchase Price of Rs. 10 Lakhs is shown below.

Annually:

Age (years) Annuity Payout (Rs.) Single Life Annuity Annuity Payout (Rs.) Joint Life Annuity
40 47,967 47,370
50 48,935 48,235
60 50,171 49,502
70 51,263 51,140
80 51,521 52,437

Half-yearly:

Age (years) Annuity Payout (Rs.) Single Life Annuity Annuity Payout (Rs.) Joint Life Annuity
40 23,635 23,340
50 24,112 23,766
60 24,721 24,391
70 25,259 25,198
80 25,385 25,837

Quarterly:

Age (years) Annuity Payout (Rs.) Single Life Annuity Annuity Payout (Rs.) Joint Life Annuity
40 11,701 11,555
50 11,937 11,766
60 12,239 12,075
70 12,505 12,475
80 12,568 12,791

Monthly:

Age (years) Annuity Payout (Rs.) Single Life Annuity Annuity Payout (Rs.) Joint Life Annuity
40 3,881 3,833
50 3,959 3,903
60 4,059 4,005
70 4,148 4,138
80 4,168 4,243

Minimum and maximum single premium

Annuity payment frequency Minimum purchase price for single life option in Rs Minimum purchase price for joint life option in Rs Minimum annuity amount in Rs
Yearly 260,813 264,959 12,000
Half-Yearly 264,667 268,877 6,000
Quarterly 267,320 271,555 3,000
Monthly 268,637 272,913 1,000
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Story first published: Tuesday, September 7, 2021, 13:33 [IST]