Bajaj Allianz Life Insurance on Wednesday launched an insurance plan offering a guaranteed regular deferred annuity during post-retirement life.
There is a funding gap in the post-retirement life and lots of people will not be earning but would need funds, so this is a grave issue that needs to be addressed, said Bajaj Allianz Life MD and CEO Tarun Chugh while announcing the launch of ‘Bajaj Allianz Life Guaranteed Pension Goal’ plan.
The life insurer said the plan is designed to fill the gap of the pension needs of various categories of people, which has nine different variants in the offing.
Bajaj Allianz Life claimed it is the only life insurance plan that offers a regular premium deferred annuity option so that the policyholders have a guarantee of their pension, having paid regularly over a period of time, when they are not active in work life.
Chugh said that India is undergoing a demographic change in terms of share of ageing and improvement in life expectancy rate. At the same time, cost of living is increasing and the nuclear family set-ups are growing.
“Add to this is a not-so-comprehensive social security system. This developing environment makes it critical for individuals to save for their retired lives, which typically will span for 25-30 years post their working age (typically 60 years in India),” he said.
He added that while there are several saving instruments that will help build a retirement corpus, annuity plans are one of the most effective tools to ensure individuals receive an income in a sustained manner through their retired life.
Chugh said the company’s new product is the latest in its basket and a first-of-its-kind that will strike the right note with the customers and help policyholders sustain their life post retirement.
Under this plan, policyholders can opt for an immediate regular income through an immediate annuity plan or start the income later through the deferred annuity plans.
“The plan is designed to help people secure their retirement income for life,” said the insurer.
Policyholders can have premium payment option of 5-10 years, while single premium option is also available. They can also change their annuity (pension amount) frequency at any policy anniversary, Bajaj Allianz Life said.
Among other key features of the policy include: option of taking joint life annuity with 50 per cent or 100 per cent annuity payable to spouse after the death of policyholder so that the family can sustain.