To bring uniformity in annuity products across insurers, IRDAI has asked life insurers to offer a standard individual immediate annuity called ‘Saral Pension’.
“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, it is 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,” said IRDAI.
Saral Pension will have two options:
- Life annuity with 100% return of purchase price - Under this option, annuity will be paid to policyholder for life. In addition, nominees/legal heirs will get 100% premium amount on death of annuitant
- Joint life annuity with return of purchase price – Insurers have to pay pension until both the survivors die. On death of the primary annuitant, the purchase price will be given to spouse or nominee/legal heir
Here are some key features of Saral Pension:
- 40-80 years old can buy this policy
- Mode of receiving payments - monthly, quarterly, half-yearly and yearly
- No maturity benefit under the product
- Minimum annuity payable under the policy is Rs.1,000 per month, Rs.3,000 per quarter, Rs.6,000 half yearly, and Rs.12,000 per annum. However, there is no limit on the maximum annuity
- The policy can be surrendered after six months of the commencement of the policy, if the annuitant or his/her spouse is diagnosed with some critical illness
- Insurers can decide premium amount of Saral Pension