SARAL PENSION YOJANA
WHAT IS SARAL PENSION YOJANA ?
WHAT IS SARAL PENSION YOJANA ?
A STANDARD PENSION SCHEME
26.01.2020 : Indian life insurance market currently has several individual immediate annuity products marketed by life insurers, with each product having its own features, terms and conditions and annuity options. With a view to having uniformity across Insurers, and to make available a product by all Life Insurers that will broadly meet the needs of an average customer, IRDAI felt necessary to introduce a standard, individual immediate annuity product, with simple features and standard terms and conditions.
Such a standard product will make it easier for the customers to make an informed choice, enhance the trust between the Insurers and the insured, and reduce mis-selling as well as potential disputes.
It can be noted here that in the last year , IRDAI had come with many standard policies to be issued by all insurers like Arogya Sanjeevani plan , Saral Bima Yojana etc . Issuance of standard policies will help the customers to compare the premiums demanded and come to an informed decision .
The policy will be issued by 1st , April , 2021 by all the Life insurers .
SARAL PENSION SCHEME - IMMEDIATE ANNUITY PLAN
BASIC FEATURES :
SARAL PENSION PLAN is a Single Premium, Non-Linked Non-Participating Immediate Annuity Plan.
It will be offered to individuals without restrictions on gender, place of residence, travel, occupation or educational qualifications.
1. Policies issued by all Life insurance companies will comply with IRDAI Notification .
2. Type of Annuity :
Option 1 : Life Annuity with Return of 100% of Purchase price (ROP) : Under this option, Annuity is paid for life of the annuitant.
In addition, 100% Purchase Price will be returned to the nominee / legal heirs on death of the annuitant.
2. OPTION 2 : Joint Life Last Survivor Annuity with Return of 100% of Purchase Price (ROP) on death of the last survivor. In this case, the annuity is first paid to the annuitant for life. After death of the annuitant, if the spouse is surviving, the spouse continues to receive same amount of annuity for life till his/her death. Subsequently, on 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 price shall be payable to the nominee / legal heirs.
3. FREQUENCY OF ANNUITY PAYMENT : Monthly, Quarterly, Half-Yearly and Yearly.
Payments shall be in arrears only, which means that the first annuity payment will start after the modal duration; for example after three months in case of quarterly mode. Modal factors to be derived with an interest rate consistent with pricing rate of interest
4. Maturity Benefit : There is no Maturity Benefit under the product
5. Surrender of Policy : Only on diagnosis of critical illness of the annuitant(s)
6 . Payment on Surrender : The policy can be surrendered any time after six months from the date of commencement, if the annuitant or the
spouse or any of the children of the annuitant is diagnosed as suffering from any of the critical illnesses specified in the Policy Document, based on the documents produced to the satisfaction of the medical examiner of the Insurer.
The list of critical illnesses may be revised from time to time by the Authority as needed. On approval ofsurrender, 95% of the Purchase Price shall be paid to the annuitant, subject to deduction of outstanding loan amount and loan interest, if any. On payment of surrender value, the policy stands terminated.
7. LOAN : Loan can be availed any time after six months from the date of commencement of the policy. Maximum amount of loan that can be granted under the policy shall be such that the effective annual interest amount payable on loan does not exceed 50% of the annual annuity amount payable under the policy. Under joint life option, the loan can be availed by the primary annuitant and on death of the primary annuitant, it can be availed by the secondary annuitant.
8 . Interest on Loan : The interest on loan shall be at 10-year G-Sec rate per annum as at 1st April, of the relevant financial year, as published by M/s. FBIL, plus not more than 200 bps and shall be applicable for all loans granted during the period .
9 . Recovery of Interest : interest will be recovered from the annuity amount payable under the policy. The loan interest will accrue as per the frequency of annuity payment under the policy and it will be due on the date of annuity. The loan outstanding shall be recovered from the claim proceeds under the policy. However, the annuitant has the flexibility to repay the loan principal at any time during the currency
of the annuity payments.
10. Minimum Annuity ( Pension ) : Rs. 1000 per Month, Rs. 3000 per Quarter, Rs. 6000 Per half year and Rs. 12000 per annum.
11. Maximum Annuity ( Pension ) : No limit
12. Entry Age : Minimum : 40 Years last birthday . Maximum : 80 Years last birthday
13 . Policy Term : Whole Life
To read IRDAI CIRCULAR , click here