HDFC Life New Immediate Annuity Plan is a non-linked traditional annuity plan that provides the policyholder several annuity options, so that he/she can enjoy a financially stable retirement period. The policy provides a steady source of income post retirement, till the death of the policyholder or his/her spouse. The policyholder also has the flexibility to choose annuities at annual, semi-annual, quarterly, and monthly frequencies. He/she can also benefit from higher rates of annuity with investments of Rs.2,50,000 or more. Some of the annuity options also provide death benefits to the spouse of the policyholder.
A customer is required to satisfy certain eligibility criteria to be able to purchase the HDFC Life New Immediate Annuity Plan. These factors are related to the age of the customer and the payout of the annuity. The eligibility factors of the HDFC Life New Immediate Annuity Plan are detailed below:
|Minimum Entry Age||30 years|
|Maximum Entry Age||85 years|
|Minimum yearly annuity payout||Rs.10,000|
|Maximum yearly annuity payout||No limit|
|Minimum half-yearly annuity payout||Rs.5,000|
|Maximum half-yearly annuity payout||No limit|
|Minimum quarterly annuity payout||Rs.3,000|
|Maximum quarterly annuity payout||No limit|
|Minimum monthly annuity payout||Rs.1,000|
|Maximum monthly annuity payout||No limit|
All ages mentioned above are with respect to the last birthday of the policyholder.
The minimum price of purchase that will produce the minimum annuity (as per the table above) will be dependent on the annuity rates prevalent at the time of purchase. These rates are prone to changes with time; however, once the annuity is bought, it is guaranteed for life.
The payout will be at the end of the annuity payment frequency. This indicates that:
The annuity rates vary based on the price band, and hence, the policyholder stands to benefit greatly from higher annuity rates when the purchase price is Rs.250,000 and above. The purchase price bands are specified in the table below:
|Band 1||Less than Rs.250,000|
|Band 2||Rs.250,000 - Rs.499,999|
|Band 3||Rs.500,000 - Rs.999,999|
|Band 4||Rs.1,000,000 - Rs.4,999,999|
|Band 5||Rs.5,000,000 and above|
For instance, the applicable annuity rate for a customer may be 8.75% when the price of purchase is Rs.250,000. If the purchase price is Rs.1,000,000, the annuity rate will be higher, say around 8.85%. However, these rates are subject to change; so you must consult a certified financial consultant for the latest updates on annuity rates.
HDFC Life New Immediate Annuity Plan offers you a steady income stream after you enter into retirement. This guaranteed income will be offered to you or your spouse till death. This enables you to enjoy a retirement life that is financially secure and free of worries.
At the inception of the policy, you can choose to opt for any of the following annuity options:
In this type of a policy, the primary annuitant is the individual whose life events are of utmost importance with respect to the payout under the contract. Secondary annuitant is the individual who is associated with the joint life contract, in addition to the primary annuitant.
|Annuity Option||Death Benefits|
|Life Annuity with Return of Purchase Price or Premium||100% of the purchase price or premium of the annuity will be paid to the nominee|
|Life Annuity with Return of Purchase Price or Balance Premium||The amount paid to the nominee will be equal to 100% of purchase price or premium of the annuity less the aggregate of all annuity instalments that were already paid to the annuitant|
|Life Annuity with a Guarantee Period||None|
|Life Annuity at 5% escalation||None|
|Life Annuity with Return of Premium or Purchase Price in Parts||1) At the death of the annuitant before the seventh policy anniversary, 100% of the premium or purchase price will be paid to the nominee 2) At the death of the annuitant after the seventh policy anniversary, 70% of the premium or purchase price will be paid to the nominee|
|Life Annuity with Return of Premium or Purchase Price on diagnosis of Critical Illness||100% of the purchase price or premium of the annuity will be paid to the nominee|
|Joint Life Annuity with 100% annuity to the Secondary Annuitant||None|
|Joint Life Annuity with 50% annuity to the Secondary Annuitant||None|
|Joint Life Annuity with 100% annuity to the Secondary Annuitant and return of Purchase Price or Premium||100% of the purchase price or premium of the annuity is payable to the nominee|
|Joint Life Annuity with 50% annuity to the Secondary Annuitant and return of Purchase Price or Premium||100% of the purchase price or premium of the annuity is payable to the nominee|
|Frequency||Time of Annuity payout|
|Annual||After one year from the purchase of the policy|
|Semi-annual||After 6 months from the purchase of the policy|
|Quarterly||After 3 months from the purchase of the policy|
|Monthly||After 1 month from the purchase of the policy|
Annuity instalments for various frequencies are as follows:
|Semi-annual||98% of yearly annuity * 1/2|
|Quarterly||97% of yearly annuity * 1/4|
|Monthly||96% of yearly annuity * 1/12|
This is not applicable for the plan.
There are no exclusions under this plan.
In case the policyholder is not satisfied with the terms and conditions specified within the policy, he/she can return it back to the insurance company within 15 days from the receipt of the policy documentation. The free-look period for policies that are purchased through distance marketing is 30 days. When the insurer receives the letter and original policy documents from the insured, they will arrange for a refund after deducting the stamp duty and annuity payout. Once the policy is returned, it cannot be revived, restored, or reinstated again.
The annuity options listed in the table below are associated with guaranteed surrender values. The insurer may pay a higher surrender value, i.e., Special Surrender Value, for the policy on the basis of prevalent market conditions.
|Annuity Option||Guaranteed Surrender Value|
|Life Annuity with Return of Purchase Price||100% of the purchase price|
|Life Annuity with Return of Purchase Price on diagnosis of critical illness|
|Life Annuity with Return of Purchase Price in parts||a) If surrender was within 7 years, 10% of the purchase price b) If surrender was after 7 years, 7% of the purchase price|
The annuity payouts will attract income tax as per prevalent laws on the date of payout. The policyholder will have to check with his/her tax consultant for specific details.
HDFC Life is a leading insurance company in India, offering a bouquet of individual and group insurance schemes. The insurance plans formulated by the company serve the purposes of Investment, Pension, Protection, and Health. The insurer had an excellent claim settlement ratio of 99.41% in the financial year 2013-14. HDFC Life also provides efficient customer service through their dedicated claims assistance cell.
Spread across 398 offices and 9,000 touch-points across the country, HDFC Life ensures that their products are easily accessible. The insurer also has a proficient financial consultancy wing that provides financial assistance to customers within India and abroad.
A. The following illnesses are covered under this annuity option:
A. The HDFC Life New Immediate Annuity Plan does not offer any maturity benefit.
A. Policy loan is not allowed under the HDFC Life New Immediate Annuity Plan.
A. After the purchase of the annuity, no alterations can be made.
A. This policy cannot be assigned to another individual.
A. Direct taxes - The amount pertaining to direct taxes will be deducted at the applicable rates for payments made towards the policy, as per the Income Tax Act, 1961. This amount is amended from time to time.
Indirect taxes - Service tax and cess will be levied. Any other form of tax or statutory levy may become applicable in the future, and will have to be borne by the policyholder.
A. The purpose of a pension plan is different from that of a savings and investment plan. When you enter into retirement and have no other source of income, a pension plan provides you a regular payout like a monthly income. Moreover, pension plans cannot be liquidated easily. This implies that your savings are secure for use during the time when you need it the most.
A. The best time to start planning for retirement is during your thirties. However, the earlier your start planning, the greater would be the savings in your retirement corpus. The power of compounding over a period of time enables you to build a large amount in your retirement kitty from relatively low investments.
A. Having diverse incomes is good for you during your earning years. But when you are older, you may not be able to work like you do now. At that point, your alternate incomes may not seem as lucrative as they are today. The ideal way in which you can ensure that you have a good balance in your retirement corpus is by purchasing a pension plan that provides you regular payouts post retirement.
A. As you grow older, there are several unexpected factors that affect your expenses. Increase in life expectancy and cost of living may render your employer-funded pension insufficient for your daily expenses. Ideally, you should look to accumulate an amount in your retirement kitty that equates to 20 times the value of your income in the year just before retirement. Hence, you should invest in a pension plan at an early age to supplement your employer-funded pension after retirement.