Tata AIA Life Insurance has launched their Fortune Guarantee Pension, a flexible annuity (guaranteed income for life) plan that will offer multiple guaranteed income options.
The company claims that the pension plan will aim to help consumers bridge the gap in terms of adequate retirement planning and income, gain financial freedom, and lead a carefree life by encouraging savings from an early age for the policyholder and the spouse. Ensuring a comfortable lifestyle throughout one’s life, especially at retirement, is an often-neglected priority in financial planning.
In a recent report by the World Economic Forum, the size of the retirement savings gap in India is expected to touch USD 85 trillion by 2050. The Guarantee Pension plan, the life insurance company says is positioned to allow the customer to live without worries all through life.
The product will be suitable for a diverse set of individuals, including the married, women and individuals wanting to consider saving to maintain their current lifestyles for the future. It is also apt for SME customers who need to ensure a security net for themselves in their life.
Samit Upadhyay, Chief Financial Officer, Tata AIA Life Insurance, says, “In the absence of a formal social security system in India, there is an urgent need to expand the influence of protection- income and health – to ensure against a fall in living standards through exigencies that may arise. There are 44 per cent households in India with a protection gap of over 90 per cent in terms of their long-term protection needs.”
He further adds, “Annuity products that offer guaranteed income for life can help navigate this existent gap with the required security. Through this Guarantee Pension, individuals save adequately as early as possible before retirement, ensuring stable income and maintaining of their lifestyle and aspirations in the present and the future.”
The company says that the plan will be an ideal solution for those seeking a suitable and secured retirement income, and for the retired who want to increase their retirement kitty by investing any surplus funds into a guaranteed life insurance solution.
Under the Deferred Life Annuity (GA-I) and with Return of Purchase Price, when a 45-year old male annuitant pays an annual premium of Rs 5 lakhs for seven years, he would start receiving an annuity income of Rs 2,54,450 per annum from the 8th year till the time he is alive. Thus, he ensures an annual income of 7.27 per cent of the total premiums paid. In case of the annuitant’s death, the nominee is also entitled to receive Death Benefit.
The product also offers a proposition for the Deferred Life Annuity (GA-II) and with Return of Purchase Price. When a 50-year old individual invests an annual premium of Rs 5 lakhs for ten years when still employed, they would start receiving an annuity income of Rs 35,000 per month / Rs 4 lakhs per annum on reaching the age of retirement. Upon the annuitant’s death, the total premiums paid would be returned to his nominee. In the Joint Life option, when a 48-year old husband and 45-year old wife invest Rs 2 lakhs for 12 years, they will get a guaranteed annual annuity of Rs 2,07,240 for life. Upon their death, their nominee would receive Rs 24 lakhs.
Key product benefits include;
- Immediate Life Annuity: The Annuity plan offers immediate annuity payouts as per the chosen frequency during the annuitant’s lifespan. It also offers Immediate Life Annuity with Return of Purchase Price, wherein the amount paid at the time of purchase is paid back as a death benefit.
- Option of Guaranteed Additions: Guaranteed Additions are accumulated at the end of every policy month during the Deferment Period.
- Option of choosing annuity in advance: This option allows you to avail of the annual annuity payout in advance.
- Avail loan against policy: You can get a loan on the policy, six months after the policy’s commencement. Under the Joint Life option, you can take a loan which the secondary annuitant can avail of in case of your death.
- Joint Life Options: Wherein the Primary Annuitant is the person entitled to receive the Annuity Payouts. Secondary Annuitants (spouse/ child/ parent/ parent-in-law or sibling) are entitled to receive the Annuity Payouts in the event of death of the Primary Annuitant, as applicable.