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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.
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||25 years|
|Maximum Entry Age||70 years|
|Accumulation Period||5 to 20 years, subject to a maximum vesting age of 80 years|
|Pay Term||Single pay|
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.
The BSLI Empower Pension - SP Plan works in the following manner:
|Guaranteed Additions||Guaranteed Additions are units that are added to the policy at certain intervals.|
|Vesting Benefit||On the date of vesting, the policyholder receives the greater amount among the following:
|Death Benefit||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 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.
The significant features of the BSLI Empower Pension - SP Plan are described below:
|Surrender Benefit||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:
|Smart Option||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.|
|Investment Funds||The BSLI Empower Pension - SP Plan is associated with the following investment funds:
|Policy Charges||The following charges are applicable to the BSLI Empower Pension - SP Plan:
|Policy Loan||Loans are not offered under the policy.|
|Partial Withdrawals||The insurer does not allow partial withdrawals under the plan.|
|Free-look Period||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.|
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 advantages of buying the BSLI Empower Pension - SP Plan from Birla Sun Life Insurance are listed below:
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.
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