All About Saral Pension Plans

Buying a pension or an annuity policy is going to be much easier from now as IRDAI recently asked all life insurance providers to sell a Regular Individual Immediate Annuity Plan called 'Saral Pension Plan,' from 1 April 2021. 

The regulator has provided recommendations for the Saral Pension plan, specifying benefits, characteristics, terms and conditions and annuity options.

Suggested Features of Saral Pension Plans

Following are some of the key expected features of the Saral Pension Plans - 

1. Entry Age

Anyone between the age of 40 and 80 years can invest in Saral Pension.

2. Premium Frequency

Saral Pension Plan is a Single Premium Scheme, i.e. one will have to invest a lump sum in order to earn a regular monthly, quarterly, half-yearly or annual pension. 

3. Pension Amount

The basic pension amount will be Rs. 1,000 per month, Rs. 3,000 per quarter, Rs. 6,000 per half-year and Rs. 12,000 per year. The amount invested is called the Annuity Purchase Price.

4. Bonus

This policy comes with a Guaranteed Simple Reversion Bonus for the first 5 years

5. Policy Tenure

This is the Standard Premium Deferred Annuity Package which features a policy tenure of 10 to 40 years

Also Read:- What are Retirement Plans? How Do They Work?

How Does A Saral Pension Plan Work?

In this policy, the premium must be charged for the whole insurance period which can range between 10 to 40 years. The primary benefit of this scheme is Sum Assured + Vested Simple Reversal Bonuses + Terminal Bonus, if any. Sum Assured shall have an unconditional fixed interest rate of at least 0.25% p.a. compounded annually.

Benefits Payable Under Saral Pension Plans

The various benefits under the Saral Pension Plans are listed below -

• In the event of the death of the annuitant during the policy period, the full premium charged up to date along with an interest rate of 0.25% p.a. Compounded annually + Vested Simple Reversion Bonus + Terminal Bonus will be payable to the nominee as a Death Benefit, which the nominee will elect to receive in a lump sum or in annuity.
• When the plan matures, the Vesting Benefit of this arrangement is Sum Assured + Vested Simple Reversing Bonuses + Terminal Bonus, if any.

You May Also Like to Read:- Benefits of Purchasing Retirement Plans

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Conclusion

The Indian life insurance industry currently has a range of individual immediate annuity policies sold by life insurers, each policy having its own attributes, terms and conditions and annuity options. In order to ensure uniformity among insurance markets and to make accessible to all life insurers a policy that will usually satisfy the needs of the average consumer,It is deemed essential to implement a regular, individual, immediate annuity plan with clear features and standard terms and conditions.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.