Why is ICICI Pru Group Immediate Annuity Plan special?
This plan helps you offer pension to your employees to take care of their post-retirement needs.
What is annuity?
Annuity is one of the most important retirement benefits for your employees. It is the regular income that your employees receive in return for a one-time payment made by you. This regular income starts at the time of your employee’s retirement.
How does this plan work?
As an employer, you can purchase an ICICI Pru Immediate Annuity plan by making a one-time payment. Through this payment, your employees will get regular pay-outs for the rest of their lives.
The annuity amount your employee will receive depends on the annuity rate applicable at the time of purchase and the pay-out option selected by you. These pay-outs will remain constant throughout the life of your employees.
At the time of purchase, you choose the frequency of the pay-outs (monthly, quarterly, half-yearly or yearly). This is called the pay-out mode.
You can select the pay-out option according to which your employees will get the pension, post-retirement. You can also choose for the pension to continue for the employee’s nominee*.
Which are the pay-out options available?
There are five pay-out options available under this plan:
Life Annuity: Regular payments are made throughout the life of your employee after his or her retirement.
Life Annuity with Return of Purchase Price: Your employee will receive the pay-outs for life in this option. In the absence of the employee, the purchase price^ of this plan will be returned to the nominee*.
Joint Life, Last Survivor without Return of Purchase Price: Similar to the Life Annuity option, the pay-out amount is first given to the employee for life. In the absence of the employee, the employee’s spouse will continue to receive the same pay-out amount as pension for life.
Joint Life, Last Survivor with Return of Purchase Price: In this option, the employee receives the pay-out amount for life. In case of an unfortunate event, the employee’s spouse will continue to receive the same amount as pension for life. In the absence of both the employee and the spouse, the purchase price of this plan will be returned to the nominee.
Life Annuity guaranteed for 5/10/15 years and thereafter: In this pay-out option, the regular pay-outs will be provided (to your employee or their spouse) for a chosen term (i.e. 5, 10 or 15 years), in both, the employee's presence and absence. If your employee completes this term, the pay-outs will still continue for life. However, the employee's spouse will not receive pay-outs in the employee's absence after the completion of the chosen term.
*Nominee is the person appointed at the time of purchase for receiving the benefits of the insurance policy in the absence of a member.
^Purchase Price is the one-time lump sum payment made to buy the annuity.
Paying pension to employees requires extensive planning to manage Longevity risk. This risk increases your liability over time if not protected with an adequate insurance cover.
ICICI Pru Group Immediate Annuity plan helps employers manage the Longevity risk. This ensures that your employees receive pension through their lifetime.
What is Longevity Risk?
Life expectancy or the number of years an individual lives, is on the rise due to development and better access to medical care. This increase in life expectancy has led to an increase in pension payment duration, thereby adding to the expenses of the company. As an employer, you can manage this liability through the ICICI Pru Group Immediate Annuity plan, as the annuity is paid for life.
Tax benefits to the group administrator and members are available as per prevailing Income Tax Laws and are subject to amendment from time to time. Applicable taxes will be charged as per prevailing laws and regulations. It is always advisable to take an independent view from your tax consultant. ICICI Prudential Life Insurance Company Limited will not be responsible in cases where any tax benefits, as stated above, are denied by the Income Tax department.