Annuity Plans

What is an Annuity Plan?

An annuity plan is an insurance contract between you (the annuitant) and an insurance company to provide you with a regular stream of 100% guaranteed pension for a lifetime after retirement. This helps you to secure your life goals and create a financial net for your family.

As an annuitant, you can make payment in a suitable annuity plan in the following two ways:

• Regular premium payments

• Lump sum payment

In return, the insurance company offers an annuity plan as the investment option that guarantees a fixed stream of income at high annuity rates for your entire life. Annuity plans locks your pension rate today for your entire life, ensuring that rates do not drop with dropping repo rates.

Features of the Annuity Plans in India

Some of the significant features of the annuity plan in India are listed below:

Annuity Plans in India 2024

Below is the list of different categories of annuity plans to invest in 2024:

1. Regular Pay Annuity Plan

   These are the annuity plans where you make regular premium payments over a period in exchange for a guaranteed income stream at decided intervals.

   List of Regular Pay Annuity Plans:

   If you invest in an annuity plan at the age of 50 years with the following specifications:

   • You Invest: Rs. 2.4 lakhs p.a.

   • Premium Payment Term: 10 years

   • Annuity Starts After: 10 years (from the age of 61 years)

   • Annuity Plan Type: Pension For Lifetime + ROP

   The list of annuity plans in India with regular pay feature is as follows:

   Investment Plans	Entry Age	Premium Payment Term (PPT)	Deferment Period	Purchase Price (Annual)	Annual Annuity Amount For Lifetime (in Rs.)
   Tata AIA Fortune Guarantee Pension	30 - 85 years	5 - 12 years	Equal to PPT	As per the Annuity Amount	Rs. 12,000 - As per Board Approved Underwriting
   ICICI Pru Guaranteed Pension Plan Flexi	40 - 70 years	5 - 15 years	5 - 15 years	As per the Annuity Amount	Rs. 12,000 - As per Board Approved Underwriting
   Max Life Guaranteed Lifetime Income Plan	25 - 85 years	5 - 10 years	PPT - 10 years	Rs. 12,000 - No Limit	Rs. 12,000 - As per Board Approved Underwriting
   HDFC Life Systematic Retirement Plan	45 - 75 years	5 - 15 years	PPT - 15 years	Rs. 30,000 - As per Board Approved Underwriting	Rs. 12,000 - As per Board Approved Underwriting
   Bajaj Allianz Guaranteed Pension Goal	Immediate: 30 - 85 years Deferred: 45 - 84 years	5 - 10 years	PPT - 10 years	As per Board approved Underwriting	Rs. 12,000 - As per Board Approved Underwriting

2. Single Pay Immediate Annuity Plan

   In this annuity plan, you make a single lump-sum payment upfront, which immediately starts generating a regular income stream for a specified period.

   List of Single Pay Immediate Annuity Plans:

   If you invest in an annuity plan at the age of 60 years as per the following specifications:

   • You Invest: Rs. 10 lakhs p.a.

   • Premium Payment Term: One-Time

   • Annuity Starts After: Immediately from Next Month 

   • Annuity Plan Type: Pension For Lifetime + ROP

   The following table shows the list of immediate annuity plans in India are listed below:

   Investment Plans	Entry Age	Purchase Price (Annual)	Annual Annuity Amount For Lifetime (in Rs.)
   Tata AIA Saral Pension	40 - 80 years	As per the Annuity Amount	Rs. 12,000 - No Limit
   HDFC Life New Immediate Annuity Plan	20 - 85 years	Rs. 2.5 lakhs - No Limit	Rs. 10,000 - No Limit
   Max Smart Guaranteed Pension Plan	30 to 85 years	As per the Annuity Amount	Rs 12000 - No Limit
   ICICI Pru Guaranteed Pension Plan	30 - 65 years	As per the Annuity Amount	Rs. 12,000 - As per Board Approved Underwriting
   Bajaj Immediate Annuity	30 - 85 years	As per Board approved Underwriting	Rs. 12,000 - No Limit
   Kotak Life Immediate Annuity	45 - 99 years	As per Board approved Underwriting	Rs. 12,000 - No Limit
   IndiaFirst Immediate Annuity Plan	40 - 80 years	Rs. 3 lakhs - No Limit	Rs. 12,500 - As per Board Approved Underwriting

3. Single-Pay Deferred Annuity Plan

   In a single-pay deferred annuity plan, you make a single lump-sum payment upfront, which accumulates and grows over a specified period until it is converted into a regular income stream.

   List of Single Pay Deferred Annuity Plans:

   Let us say you invest in an annuity plan at the age of 60 years as per the following details:

   • You Invest: Rs. 10 lakhs p.a.

   • Premium Payment Term (PPT): One-Time

   • Annuity Starts After: 5 years

   • Annuity Plan Type: Pension For Lifetime + Return of Premiums

   You can learn the best-deferred annuity plans with the Single Pay feature from the following table:

   Investment Plans	Entry Age	Deferment Period	Purchase Price (Annual)	Annual Annuity Amount For Lifetime (in Rs.)
   LIC New Jeevan Shanti	30 to 79 years	1- 12 years	Rs 1,50,00 - No Limit	Rs 12000 (As per board approved Underwriting)
   Max Life Guaranteed Lifetime Income Plan	25 - 85 years	1 - 10 years	Rs. 12,000 - No Limit	Rs. 12,000 - As per Board Approved Underwriting
   ICICI Pru Pension for Life	30 - 85 years	1 - 10 years	As per the Annuity Amount	Rs. 12,000 - As per Board Approved Underwriting
   TATA AIA Pension for Life	30 - 85 years	1 - 10 years	As per the Annuity Amount	Rs. 12,000 - As per Board Approved Underwriting
   Bajaj Allianz Pension for Life	45 - 84 years	1 - 10 years	As per Board approved Underwriting	Rs. 12,000 - As per Board Approved Underwriting
   HDFC Life Pension for Life	30 - 85 years	1 - 10 years	Rs. 76,046 - No Limit	Rs. 12,000 - No Limit
   IndiaFirst Pension for Life	45 - 80 years	5 - 10 years	Rs. 1 lakh - No Limit	Rs. 12,500 -As per Board Approved Underwriting

Details of Annuity Plans in India in 2024 (Regular Pay)

1. ICICI Pru Guaranteed Pension Plan Flexi

   ICICI Pru Guaranteed Pension Plan Flexi is a non-linked, non-participating deferred annuity plan that provides you with an assured income and the annuity rates. This investment plan helps to ensure peace of mind during your golden years. 

   ICICI Pru is the only insurer to provide you with the Waiver of Premium (WOP) Option in annuity plans.

   Features of ICICI Pru Guaranteed Pension Plan Flexi:

   • Return of Purchase Price (ROP) Option: This annuity plan offers you the Return of Purchase Price (ROP) option along with the lifetime guaranteed annuity benefit.

   • Diverse Annuity Options: This annuity plan provides you with the following Annuity options-

     • Single Life Annuity

     • Joint Life Annuity

   • Flexible-Premium Payment Term and Vesting Age: You get the flexibility to choose the premium payment term and vesting age as per your financial needs.

   • Varied Payout Frequencies: Annuity payouts are available on a monthly, quarterly, semi-annual, and annual basis as per your preference.

   • 100% Surrender value from Day 1: You can choose to surrender the policy anytime during the premium payment term and get 100% premium paid back as surrender value.

   • Exclusive Waiver of Premium (WOP) Rider: ICICI Pru holds the status of the only insurer that provides an additional rider of Waiver of Premium (WOP). In case the primary annuitant dies during the premium payment term, all future premiums are waived, and the secondary annuitant will continue to receive the regular income after the deferment period until death.

   • "Save the Date" Option: The "Save the Date" option helps you choose the date on which you wish to receive your annuity.

   • Top-Up Option for Additional Funds: You can use the Top-up option of this annuity plan to park your additional funds and get more annuity benefits on retirement.

   • Tax Benefits: The premium paid during the accumulation phase grows without tax deductions. 

   • Capital Gains Tax Exemption on Surrender: When you surrender the ICICI Pru Guaranteed Pension Plan Flexi, you will not have to pay any capital gains tax.

2. Max Life Guaranteed Lifetime Income Plan

   Max Life Guaranteed Lifetime Income Plan is a non-linked, non-participating annuity savings plan. It gives you higher assured income and the annuity rates on your retirement. Max Life is a single insurer that provides annuity plans from the age of 30 years.

   Features of Max Life Guaranteed Lifetime Income Plan:

   • A Comprehensive Annuity Plan: This annuity plan stands out in the market by providing a combination of deferred annuity and valuable death benefits.

   • Early Start Advantage: Only insurer in the industry that offers you an annuity scheme from 30 years of age.

   • High Annuity Rates: This annuity plan offers you guaranteed assured income at high annuity rates throughout your lifetime.

   • Flexible Annuity Options: Annuity options available with this annuity plan:

     • Single Life Annuity

     • Joint Life Annuity

   • Varied Annuity Choices: You get the flexibility to choose from various income payout options under this annuity plan.

   • Nominee Benefits: In your absence, your nominee is provided with the benefit of 105% of the Purchase Price.

   • Tax Efficiency: No tax is deducted on the premium growth during the accumulation phase. 

3. Bajaj Allianz Guaranteed Pension Goal

   The Bajaj Allianz Guaranteed Pension Goal Plan is a non-participating, non-linked, deferred annuity plan. This investment plan aims to help you achieve your lifestyle goals during your post-retirement period.

   Features of Bajaj Allianz Guaranteed Pension Goal:

   • Guaranteed Income: This annuity plan offers guaranteed income throughout your lifetime.

   • Flexible Payout Modes: Annuity Payout Modes are available with this annuity plan on a Monthly/ Quarterly/ Semi-Annual/Annual basis.

   • Annuity Options Catered to You: You can select from a wide range of annuity options as per your financial needs.

   • Joint Life Annuity: In case of your unfortunate demise, this annuity plan provides the facility to give annuity payouts to your spouse of up to 50% or 100% as per your choice under the Joint Life Annuity option.

   • Return of Purchase Price (ROP) Option: The Return of Purchase Price (ROP) option is also available in your absence or as a survival benefit if the option has been opted for.

   • Financial Benefits on Premium: Premium investments grow without tax implications during the accumulation phase.

4. HDFC Life Systematic Retirement Plan

   HDFC Life Systematic Retirement Plan is an individual/ group, non-participating, non-linked deferred annuity plan that provides you with a regular income and higher annuity rates along with financial independence during your post-retirement period.

   Features of HDFC Life Systematic Retirement Plan:

   • Tailored Deferment Period: You can select your annuity deferment period as per your financial needs.

   • Diverse Payout Modes: Annuity payout modes are available with this annuity plan on a Monthly/ Quarterly/ Semi-Annual/Annual basis.

   • Lifetime Financial Security: You get a guaranteed fixed income and the annuity rates for a lifetime upon payment of premiums for a limited period.

   • Nominee Protection: Your nominee gets the Return of Purchase Price (ROP in case of your unfortunate demise if the option has been opted for).

   • Tax Efficiency: The premium builds up without tax being deducted.

5. IndiaFirst Life Guaranteed Annuity Plan

   IndiaFirst Life Guaranteed Annuity Plan is a non-linked, non-participating annuity plan that provides you with assured regular income along with the annuity rates throughout your lifetime.

   Features of IndiaFirst Life Guaranteed Annuity Plan:

   • Lifelong Financial Security: This annuity plan provides you with guaranteed income at high annuity rates for a lifetime.

   • Tailored Annuity Options: You can choose from 12 annuity options as per your financial planning.

   • Diverse Payout Modes: Annuity payout modes that align with your financial goals: Monthly/ Quarterly/ Half-yearly/ Yearly.

   • Critical Illness Protection: The Return of Purchase Price (ROP) option is available with the annuity plan to provide protection against critical illnesses.

   • Assured Income, Even in Absence: You can choose the Annuity Certain option to get assured income and high annuity rates for the pre-determined period, even in case of your unfortunate demise.

   • Family-Centric Facilities: A Joint Life or Family Income facility is also available with this annuity plan to provide regular income to your loved ones in your absence.

   • Increasing Annuity Income: The escalating Life Annuity option provides a constantly increasing annuity income.

   • Tax Efficiency: Premium investments grow without tax implications during the accumulation phase.

Details of Annuity Plans in India in 2024 (Single Pay)

1. HDFC Life New Immediate Annuity Plan

   The HDFC Life New Immediate Annuity Plan is a single premium annuity plan that provides you with a guaranteed income for life.

   Features of HDFC Life New Immediate Annuity:

   • Lifelong Financial Security: Once you purchase this annuity plan, you will receive a guaranteed income for life at the annuity rates.

   • Tailored Payout Frequencies: Depending on your preference, the following annuity modes are available- Monthly/ Quarterly/ Semi-annually/ Annually.

   • Versatile Annuity Options: This annuity plan in India offers you flexible annuity options-

     • Single Life Annuity

     • Joint Life Annuity

   • Tax Advantages: Tax deductions do not apply to premiums as they build up during accumulation phase.

   • Enhanced Returns with High Purchase Price: You can explore the advantage of higher annuity rates linked to a high Purchase Price, enhancing your overall returns.

   • Safety Net with ROP Option: The Return of Purchase Price (ROP) option is available with this annuity plan for detecting death and critical illness.

2. TATA AIA Saral Pension Plan

   The TATA AIA Saral Pension Plan is a retirement plan that offers guaranteed lifetime income at the best-fixed annuity rates.

   Features of TATA AIA Saral Pension Plan:

   • Diverse Annuity Options: This annuity plan is available in two options:

     • Single Life Annuity

     • Joint Life Annuity

   • No Medicals Required: There is no need for medical examinations to purchase this annuity plan in India.

   • Income Variability: The amount of income you receive will depend on your age, purchase amount, and the annuity option you choose.

   • Tax Benefits: Premiums increase during accumulation without being taxed.

   • Flexible Payout Frequencies: You can choose to receive your annuity payments monthly, quarterly, semi-annually, or annually.

   • Nominee Protection: In the unfortunate event of your demise during the policy term, the nominee will receive the Purchase Price (ROP)in case the ROP option is opted for.

3. Bajaj Allianz Immediate Annuity Plan

   The Bajaj Allianz Immediate Annuity Plan is a non-linked, non-participating, immediate annuity plan that provides regular income for life with the annuity rates.

   Features of Bajaj Allianz Immediate Annuity:

   • Guaranteed Income at Optimal Fixed Rates: This annuity plan provides a guaranteed income for life with the fixed annuity rates, regardless of how long you live.

   • Versatile Annuity Options: You can choose from a variety of annuity options under this plan, including:

     • Single life annuity

     • Joint life annuity

     • Period certain annuity

   • Flexible Payout Frequencies: Annuity modes available with this plan: Yearly/ Half-yearly/ Quarterly/ Monthly.

   • Return of Purchase Price (ROP) Option: This annuity plan allows you to receive your invested amount back as a Return of Purchase Price (ROP) on death or as a Survival benefit.

4. ICICI Pru Guaranteed Pension Plan

   ICICI Pru Guaranteed Pension Plan is a retirement-oriented insurance product. It is designed to provide you with a regular income with high annuity rates during your retirement years.

   Features of ICICI Pru Guaranteed Pension Plan:

   • Lifelong Financial Security: This annuity plan offers a guaranteed annual income to ensure financial stability during retirement.

   • Flexible Payout Frequencies: Under this annuity plan, you can receive the income on a monthly, quarterly, half-yearly, or yearly basis, depending on your preference.

   • Comprehensive Annuity Options: Availability of 11 annuity options designed to suit your financial requirements

   • Tailored Annuity Choices: You can choose from a variety of annuity options to meet your specific needs-

     • Single life annuity

     • Joint life annuity

   • Tax Benefits under ICICI Pru Guaranteed Pension Plan: The premium amount in the accumulation phase grows without being reduced by taxes.

   • Safety Net with ROP Option: The Return of Purchase Price (ROP) option is available in the occurrence of unfortunate death, critical illness, or accidental permanent disability.

   • Annuity Enhancement: You can increase your annuity income through a top-up option.

   • Nominee Protection: On your unfortunate demise, your nominee will receive a death benefit depending on the purchase amount and the annuity option you choose.

5. Kotak Life Immediate Annuity Plan

   Kotak Life Immediate Annuity Plan is a non-linked, non-participating immediate annuity plan that provides you with a regular stream of income for life along with high annuity rates.

   Features of Kotak Life Immediate Annuity Plan:

   • Varied Annuity Options: This annuity plan in India offers you 6 annuity options to choose from this annuity plan, as per your financial needs.

   • Maximizing Returns: You can get higher annuity rates for higher premium payments.

   • Consistent Annuity Rates: Once decided, the annuity rates remain stable during your lifetime.

   • Diverse Annuity Options: This annuity plan provides you with the option of Single Life Annuity and Joint Life Annuity.

   • 6 Annuity Options:

     • Lifetime Income

     • Lifetime Income with Cash-back

     • Lifetime Income with Term Guarantee

     • Last Survivor - Lifetime Income with 100% Annuity to Surviving Spouse

     • Last Survivor - Lifetime Income with 50% Annuity to Surviving Spouse

     • Last Survivor - Lifetime Income with 100% Annuity to the Surviving Spouse and Cash-back on the Death of Surviving Spouse

   • Enhanced Annuity Rates: You can get higher annuity rates on payment of the higher premium amount.

   • Financial Advantages: The amount invested during accumulation grows tax-free.

Types of Annuity Plans in India

Various insurance companies offer a range of annuity plans in India, prominent of them are as follows:

Documents Required to Buy Annuity Plans in India

The essential documents required to buy annuity plans in India are listed in the table below:

Working of Annuity Plans in India

Learn the working of annuity plans in India from the steps mentioned below:

Step 1: Selection of Annuity Plan

The first step is to choose the type of annuity plan that suits your needs. Consider factors such as the desired payout frequency, whether you want an immediate or deferred annuity, and any additional features you require.

Step 2: Pay the Premium 

Once you have chosen an annuity plan, you will need to pay a premium. The premium amount will depend on the type of annuity plan you choose, your age, and the amount of income you want to receive.

Step 3: Vesting Age

The vesting age is the age at which you want to start receiving income earned from the annuity rates under the annuity plan.

Step 4: Annuity Payout Options 

Before reaching the vesting age, you will need to select the annuity payout options that determine the frequency and duration of your income payments. You can choose monthly, quarterly, half-yearly or annual payouts.

Step 5: Start receiving payments 

Once you reach the vesting age, the insurance company starts providing you with regular income payments as per the annuity payout options for the chosen duration.

Step 6: Additional Features

Some annuity plans offer additional features, such as a joint-life annuity or return of purchase price or waiver of premium option. Joint-life annuity ensures that the income continues to the spouse or nominee after the annuitant's death, while the Return on Purchase Price (ROP) guarantees that the remaining amount is given to the nominee or legal heirs if the annuitant passes away before using the total investment. Waiver of premium ensures that the policy continues in case of the unfortunate demise of the primary annuitant.

Advantages of Annuity Plans in India

Let us have a look at the advantages offered under the annuity plans from the list mentioned below:

1. No Cap of Investment

   annuity plans do not have investment limits, unlike government schemes like the Senior Citizens Savings Scheme (SCSS) and Post Office Monthly Income Scheme (PO-MIS).

2. Sense of Financial Security

   Annuity plans offer financial security by providing a guaranteed income stream along with the annuity rates. The insurance company assumes the responsibility of managing the investment and longevity risk, ensuring that you receive the promised income for the specified period or throughout your lifetime.

3. Guaranteed Income 

   An annuity plan in India provides you with a guaranteed income for life and high annuity rates. This can be a great way to ensure that you have a steady income to live on during retirement.

4. Tax Benefits 

   Annuity Plans in India offer tax-deferred growth, which can help you save taxes and increase your retirement savings.

5. Flexibility 

   Many types of annuity plans are available, so you can choose one that fits your individual needs and circumstances. For example, you can choose an annuity that pays out a fixed amount of money each month or an annuity that pays out a variable amount of money based on the performance of the underlying investments.

6. Retirement Income 

   Annuity plans provide a reliable and regular income during your retirement years. This ensures that you have a steady source of income to support your lifestyle and meet your financial obligations after you stop earning.