BSLI Empower Pension - SP Plan is a unit linked, non-participating pension plan that helps you invest your single premium and investment returns into a retirement corpus. The time during which the retirement corpus is generated is referred to as the accumulation period. Once the policy vests, the policy will enter into the income phase. During this phase, the corpus will be used to provide a steady stream of income to the policyholder for the rest of his/her life.
During the accumulation period, BSLI offers the Smart Option which allows the insurer to manage and administer the investment portfolio of the customer based on his/her needs. The retirement corpus that is accumulated can be utilised at the time of retirement to purchase an annuity option from BSLI at the rates prevailing then.
Investment funds are subject to market risks. The investment risk under the BSLI Empower Pension - SP Plan is borne by the policyholder.
Eligibility -Who is the BSLI Empower Pension - SP Plan for?
A customer will be eligible to buy the BSLI Empower Pension - SP Plan, if he/she fulfills certain eligibility conditions. These factors are described in the table below:
|Minimum Entry Age
|Maximum Entry Age
||5 to 20 years, subject to a maximum vesting age of 80 years
Sum Assured and Premium Range - What you get and what it costs
The BSLI Empower Pension - SP Plan offers various benefits such as Vesting Benefit, Death Benefit, Surrender Benefit, etc. The sum assured under the plan varies based on the chosen vesting date and risk profile.
The policyholder is required to pay a single premium towards the policy. The minimum premium is Rs.1 lakh and there is no limit on the maximum premium.
Plan coverage - What the BSLI Empower Pension - SP Plan covers
The BSLI Empower Pension - SP Plan works in the following manner:
- The customer first chooses the single premium amount that he/she will pay towards the policy. Top-up premiums are not allowed under the plan.
- The vesting date is decided next. When choosing this date, you should ensure that there is an accumulation period of 5 to 20 years.
- The customer then chooses the risk profile, i.e., conservative, moderate, or aggressive, based on his/her risk appetite. Once the risk profile is chosen, it cannot be altered.
- The Guaranteed Vesting Benefit is determined automatically based on the choices above.
- The single premium is used to purchase units in two investment funds, i.e., Income Advantage Guaranteed (debt fund) and Maximiser Guaranteed (equity fund). The proportion of investment is based on the selected risk profile and vesting date.
- Fund Value is the total value of investments till date. This value is equal to the prevailing unit prices multiplied by the units allocated to the investment funds.
- The coverage of the BSLI Empower Pension - SP Plan is as detailed below:
||Guaranteed Additions are units that are added to the policy at certain intervals.
||On the date of vesting, the policyholder receives the greater amount among the following:
The Guaranteed Vesting Benefit varies based on the risk profile and vesting date chosen. Once the Guaranteed Vesting Benefit is assigned to a policy at inception, it will remain constant.
On the vesting date, the policyholder can utilise this benefit to:
- The Guaranteed Vesting Benefit
- Fund Value
- Extend the accumulation period, subject to the policyholder being below 55 years of age and the maximum vesting age being below 80 years.
- Purchase a new single pay deferred pension plan from BSLI, based on the products and rates available then.
- Receive 1/3rd of the vesting benefit as a tax-free lump sum and use the remaining amount to receive a steady stream of income from the insurer.
- Enter into the income/annuity phase with BSLI as per the products available on the vesting date.
||If the life assured dies while the policy is in effect, the nominee will be paid the death benefit. This amount is the greater of the following:
The Guaranteed Death Benefit is the greatest amount among:
- Guaranteed Death Benefit
- Fund Value (on the date of intimation of death)
The nominee can choose to withdraw the death benefit payment or use the entire proceeds to buy an annuity from the insurer.
- 105% of the single premiums paid, or
- Accumulation of the single premium that has already been paid at a compounding guaranteed rate.
Exclusions - What the BSLI Empower Pension - SP Plan doesn’t cover
The nominee will be paid the fund value if the policyholder commits suicide, whether medically sane or not, within 1 year from the date of issuance of the policy.
Other Key Features – Freelook Period, Surrender Values, Grace Period etc.
The significant features of the BSLI Empower Pension - SP Plan are described below:
||The policyholder can surrender the policy anytime during the accumulation period. The discontinuance date is the date on which the policy is surrendered.
If the policy is surrendered during the first 5 policy years, on the discontinuance date, the fund value with the discontinuance charges will be transferred to the Pension Discontinued Policy fund. This fund is also credited with the higher among the actual returns or a minimum guaranteed interest rate. The proceeds from the fund are paid to the policyholder on the date of the fifth policy anniversary or death, whichever occurs first.
If the policy is surrendered after the completion of 5 policy years, on the discontinuance date of the plan, the policyholder is paid the fund value. The policy terminates following this.
The policy proceeds can be used in any one of the following ways:
- To buy a single pay deferred pension plan from the insurer on the surrender date.
- Commute as much as required and use the remaining amount to receive a steady stream of income from the insurer.
- Enter into the income/annuity phase with BSLI on the surrender date.
||If the policyholder chooses the Smart Option, his/her portfolio will be structured based on the chosen risk profile and vesting date. The insurance company invests the single premium between two investment funds, i.e., Income Advantage Guaranteed (debt fund) and Maximiser Guaranteed (equity fund) in a proportion that is predetermined based on the chosen risk profile and vesting date.
From then, the insurer will administer the investment portfolio on behalf of the policyholder. Over a period of time, the allocation is managed in a way such that at every policy anniversary, it will automatically switch from riskier assets to safer ones, progressively. This continues till the plan approaches vesting, i.e., the retirement date of the policyholder.
||The BSLI Empower Pension - SP Plan is associated with the following investment funds:
Apart from this, the Pension Discontinued Policy Fund also operates.
- Income Advantage Guaranteed (debt fund) - Very low risk
- Maximiser Guaranteed (equity fund) - High risk
||The following charges are applicable to the BSLI Empower Pension - SP Plan:
- Investment Guarantee Charge
- Premium Allocation Charge
- Fund Management Charge
- Policy Administration Charge
- Miscellaneous Charge
||Loans are not offered under the policy.
||The insurer does not allow partial withdrawals under the plan.
||If the policyholder is not satisfied with the terms and conditions in the policy document, he/she can return the same to the insurer within 15 days. This interval is called the free-look period. The free-look period for policies that were bought through distance marketing is 30 days.
When the insurer receives the original policy documents with relevant reasons for the return, it pays the fund value and non-allocated premiums to the policyholder.
Tax benefits – How you can save with the BSLI Empower Pension - SP Plan
The BSLI Empower Pension - SP Plan offers tax benefits according to Section 80CCC and Section 10(10A) of the Income Tax Act, 1961. This is, however, subject to the fulfillment of additional conditions mentioned in these sections.
Since tax rules are subject to change, it is advisable to consult a tax advisor to understand the latest provisions.
Other benefits – How you can save with the BSLI Empower Pension - SP Plan
Other advantages of buying the BSLI Empower Pension - SP Plan from Birla Sun Life Insurance are listed below:
Apply online: Customers can buy insurance policies easily through the insurer’s website.
Online premium calculator: The company website has an online premium calculator using which customers can determine the amount of premium they are required to pay towards a policy.
Status of application: A customer can check the status of his/her application on the insurer’s website by entering the application number and his/her personal details.
Insurance advisor: The insurance company offers the assistance of an insurance advisor who would assist in narrowing down on a plan suitable to the customer’s needs. To avail this service, the customer would have to fill up a form on the BSLI website. The insurance advisor will then contact/meet the customer at his/her convenience.
Grievance redressal: The insurer has a grievance redressal cell that would resolve issues/grievances raised by customers. Grievances are acknowledged within 3 working days, and a resolution is provided in 15 days.
Online premium payment: The insurer’s website enables customers to pay premiums online using their bank accounts or credit cards.
Claim process: Customers can initiate claims through the company’s website. Alternatively, they can visit the nearest BSLI branch or call the toll-free number, 1-800-270-7000 for the same. The company will also provide assistance on claim-related issues if these are emailed to BSLI.Claims@birlasunlife.com.
Policy alerts: Customers can receive alerts and policy updates through emails.
Customer service: If a customer has any queries on any of the BSLI policies, he/she can contact the customer service team of the insurer at 1-800-270-7000 or send an email to firstname.lastname@example.org.
Why should you buy BSLI Empower Pension - SP Plan from Birla Sun Life Insurance Company Limited?
Birla Sun Life Insurance ranks fourth in India among the private sector insurers, with a market share of 7.6%. In the financial year 2015-16, the company reported a gross premium income of Rs.5,580 crores, net profit of Rs.140 crores, and assets under management of Rs.30,811 crores.
- The insurer is affiliated to 3 bancassurance partners.
- BSLI offers a wide range of insurance products, including child plans, ULIPs, group plans, and micro-insurance policies.
- The company has won several accolades for its marketing strategies and customer satisfaction initiatives, some of which include:
- Birla Sun Life Insurance was nominated for the 8th Asia Insurance Industry Awards in 2004.
- The company came second in the Best Life Insurer category at the Outlook Money Awards in 2004.
- BSLI has won a silver medal and an appreciation letter from APPIES 2010 - Asia Pacific Advertising & Marketing Congress for its campaign on Wealth with Protection Solutions.
- The company received the award for ‘Best Insurance Integrated Ad Campaign’ at the IAC Awards in 2011.