Saral Pension Yojana: All you should know

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For those planning for a secure retirement investment, Saral Pension Yojana is an appropriate option. It is a standard individual immediate annuity product with simple features and standard terms and conditions. As per the guidelines of the country’s insurance regulatory body, Insurance Regulatory and Development Authority (IRDAI), there are two types of annuity options – single life and joint life – that are available to insurers in Saral Pension Plan. Various life insurance companies including state-owned Life Insurance Corporation of India (LIC), which commands more than 66% market share, offer this policy to its customers.

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Features

– This is a single premium, non-participating, non-linked immediate annuity plan.

– The Saral Pension comes with two annuity options. You can get a lifetime pension with the return of purchase price (amount invested initially) and joint-life (last survivor annuity) with the return of purchase price on death of the last survivor.

– The plan offers a single premium payment option.

– The mode of annuity payment will be monthly, quarterly, half-yearly, and yearly.

Policy price

The insurance companies will decide the pricing. According to market experts, generally the average IRR (net yield) of these plans is 5.10%.

Benefits

Return of purchase price

Under option 1 which covers single life, the purchaser will continue getting annuities as long as the person is alive. On the death, the nominee or legal heirs will be paid the full purchase price.

Under option 2, which covers joint life. There are two types of death benefit options. After the first death 100% of the annuity payments continue to be paid as long as one of the annuitants is alive. However, on the death of the last survivor, the annuity payments will be stopped and the purchase price will be payable to the nominee or legal heirs.

Maturity benefit

There is no maturity benefit under this scheme.

Policy loan

Policy loan facility also available after the six months from the policy commencement date. The insurer will recover the loan interest from the annuity amount payable under the policy.