Tata AIA Life Insurance Co. Ltd., one of the fastest growing private life insurance companies in the country, announced the launch of Tata AIA Life Insurance Smart Annuity Plan, a Single Premium, Non-Linked Non-Participating Annuity plan that offers guaranteed lifetime income to help manage expenses post retirement, thereby enabling financial independence during that life phase.
The plan removes investment risk and the risk of outliving one’s savings for annuitant, in their retirement years by providing a guaranteed income (also called annuity) for as long as they live. The plan has three, flexible annuity options to meet a retiring individual’s needs - Immediate Life Annuity, Immediate Life Annuity with Return of Purchase Price, and Deferred Life Annuity with Return of Purchase Price.
For those who plan ahead, the deferred annuity option offers guaranteed1 income at rates locked in today, for a lifetime, and the income can commence at a future date, as decided by the annuitant.
All three options are available on single life and joint life basis. What that means is that in a joint-life option, income will continue to come in for as long as even one of the partners is alive.
Speaking on the occasion, Samit Upadhyay, Chief Risk Officer and Head products, Tata AIA Life Insurance, said: “Peace of mind post retirement only comes when one has financial security. For that, it is critical to have guaranteed income for as long as one lives. This is easier said than done in a world of increasing life expectancy and fluctuating markets. Empirical evidence shows that in India, 10-year bond yields have fallen by approx. 6.5% since 1996 (14% to the current 7.5%)approx. In India. In most developed economies like the US and UK, the fall has been close to 5%-6% approx., for the same period. Safeguarding one’s retirement income from market fluctuations becomes imperative. For those looking to retire in the near future, locking into guaranteed income sooner rather than later makes ample sense. Our latest offering, Tata AIA Life Insurance Smart Annuity Plan addresses the need for guaranteed1 income for lifetime with a variety of annuity options.”
Tata AIA Life Insurance Smart Annuity Plan offers the policyholder the option to choose an annuitant other than self. This ensures that one can provide for old age income of a close blood relative. Guaranteed income1 (or annuity) is paid out at a frequency – monthly, quarterly, half yearly or yearly – as chosen by the customer, at a rate guaranteed at the time of purchase. Annuity rates vary by the age of the annuitant, the amount invested and the annuity option chosen.
The plan also offers the choice of boosting the lifetime income post purchase of the plan by flexible top-ups. The additional annuity amount payable is based on the top-up amount and the annuity rate prevailing at the time of top-up.
The minimum age of entry for the annuitant is 45 years. The minimum one-time investment can be as low as Rs 47,9622. The single premium invested is also eligible for a tax deductions3 under section 80CCC of the Income Tax Act.