Buying a pension or an annuity strategy will turn out to be significantly less difficult now. IRDAI has asked all life insurance coverage businesses to present Standard Individual Immediate Annuity Product, ‘Saral Pension’ with impact from 1st April 2021. The regulator has released the suggestions on Standard Individual Immediate Annuity Product, ‘Saral Pension’ by defining the advantages, functions, terms and situations and annuity solutions.
Anyone involving 40 and 80 years can invest in Saral Pension which will be a Single Premium strategy i.e. one will have to invest a lump sum quantity to get common pension on Monthly, Quarterly, Half-Yearly or Yearly basis. The minimum quantity of pension will be Rs. 1000 per Month, Rs. 3000 per Quarter, Rs. 6000 Per half-year and Rs. 12000 per annum. The quantity invested is known as Purchase Price in annuity spot.
There will only be only two annuity solutions:
a) Life annuity with one hundred% Return of Purchase Price – Under this choice, Annuity is paid for the life of the annuitant. In addition, one hundred% Purchase Price will be returned to the nominee / legal heirs on the death of the annuitant.
b) Joint Life annuity with a provision of one hundred% annuity to the secondary annuitant on the death of the main annuitant and Return of one hundred% Purchase Price on death of the final survivor. In this case, the annuity is 1st paid to the annuitant for life. After the death of the annuitant, if the spouse is surviving, the spouse continues to get the identical quantity of annuity for life till his/her death. Subsequently, on the death of the spouse, Purchase Price shall be payable to nominee / legal heirs. However, if the spouse has pre-deceased the annuitant, then on the death of the annuitant, the Purchase value shall be payable to the nominee / legal heirs.
Benefits payable
There is no Maturity Benefit below the item. In the case of a single life annuity, one hundred% of the Purchase value is paid on death. In the case of a joint-life annuity, immediately after the death of the annuitant:
- If the spouse is surviving, the spouse continues to get the identical quantity of annuity for life till his/her death. Subsequently, on the death of the spouse, one hundred% Purchase Price shall be payable to nominee / legal heirs.
- However, if the spouse has pre-deceased the annuitant, then on the death of the annuitant, the Purchase value shall be payable to the nominee /legal heirs.
Indian life insurance coverage market place at present has various person quick annuity merchandise marketed by life insurers, with every item obtaining its personal functions, terms and situations and annuity solutions. With a view to obtaining uniformity across Insurers, and to make accessible a item by all Life Insurers that will broadly meet the wants of an typical buyer, it is felt essential to introduce a regular, person quick annuity item, with straightforward functions and regular terms and situations.