What are Pension Plans/Retirement Plans?

Retirement Plans are a category of life/annuity plans that are specially designed to meet your post-retirement needs such as medical and living expenses. To ensure that you can enjoy your golden years with financial independence, these policies help you plan for your expenses and secure your future.

Why do I need to plan for my retirement?

Increasing retirement years

With average life expectancy increasing in India, it has become increasingly important to plan for a longer retirement. The life expectancy figures indicate how long an average individual lives. In India, the average life expectancy of a person aged 60 is 18.022 years. This means that an average Indian lives up to the age of 78. Hence, you need to start planning in advance to maintain your lifestyle and take care of other expenses for such a long duration.

Medical expenses

A major worry with increasing age is unforeseen medical expenses. Rising medical costs can be difficult to manage unless you plan for them in advance.

Financial independence post retirement

You would like to live your life on your own terms after your retirement. However, more than 65%^^ individuals above the age of 60 depend on others for their daily expenses. This shows how important it is to plan for your retirement and ensure your financial independence.

^^As per the 'Situation Analysis of The Elderly in India' report of Ministry of Statistics and Programme Implementation MOSPI





Benefits of Retirement Plans

 
GUARANTEED REGULAR INCOME FOR LIFE

GUARANTEED REGULAR INCOME FOR LIFE

With Retirement plans, you and your spouse can receive regular pension for life.

SECURITY FOR YOUR CHILDREN IN YOUR ABSENCE

SECURITY FOR YOUR CHILDREN IN YOUR ABSENCE

In some retirement plans, your children will receive a lump-sum amount in the absence of both you and your spouse. This helps you leave behind a legacy for your children.

TAX BENEFITS U/S 80CCC AND 10(10A)

TAX BENEFITS U/S 80CCC AND 10(10A)

Apart from enjoying a comfortable retirement, you can also enjoy tax benefits** on the premium paid up to a limit of ₹1.5 lakh.

 

**Tax benefits are subject to conditions under Section 80CCC and 10(10A) and other provisions of the Income Tax Act, 1961. Applicable taxes will be charged extra as per prevailing rates. Tax laws are subject to amendments from time to time.

4 ways to pass on your retirement plan money to your family

1

ENTER CORRECT NOMINEE DETAILS

Provide correct nominee details to ensure your nominee receives the money, in case of your demise during the policy term. Ideally, make your spouse or child the nominee.

2

INFORM YOUR NOMINEE ABOUT THE POLICY

Ensure your nominee is aware about your plan and share key policy details. (e.g. Policy Number), so that he/she can get the claim amount without hassle.

3

BUY THE RIGHT ANNUITY PLAN TO SECURE YOUR SPOUSE

For e.g. you can secure your spouse's future by opting for a joint life annuity plan. Regular income will be provided to your spouse after your demise.

4

BUY AN ANNUITY PLAN THAT CAN HELP YOUR CHILDREN

For e.g. you can buy an annuity with return of purchase price. You will receive regular income as long as you live. After you, your children will get back the initial lump sum paid by you.

 

 



No matter what your need is, we have a solution

ICICI Pru Gua₹anteed Pension Plan - DEFERRED ANNUITY

Get a guaranteed income for life with the option to defer income by upto 10 years. You also have a choice of getting back your purchase price on diagnosis of a Critical illness (CI) or Permanent Disability due to accident (PD) and use it for treatment~.

KEY FEATURES
  • Single premium plan to get guaranteed income for life with the option to defer income by upto 10 years
  • Lock in the current interest rates for the annuity to be received later
  • Annuity plan can cover either single or joint life*
  • Flexible payout options to suit your need#
  • Tax benefits^ on premium paid u/s 80CCC of Income Tax Act, 1961

ICICI Pru Gua₹anteed Pension Plan - IMMEDIATE ANNUITY

Get a guaranteed income for life immediately. You also have a choice of getting back your purchase price in your survival years1.

KEY FEATURES
  • Single premium plan to get guaranteed income immediately for the rest of your life
  • Annuity plan can cover either single or joint life*
  • Flexible payout options to suit your need#
  • Tax benefits^ on premium paid u/s 80CCC of Income Tax Act, 1961
  • Purchase annuities from your savings or accumulated NPS corpus

ICICI Pru SARAL PENSION - A Non-linked Non-participating Single Premium Individual Immediate Annuity Plan

Get a guaranteed income for life immediately with the choice to opt for single life or joint life option.

KEY FEATURES
  • Pay just once and get a guaranteed lifelong income
  • Continue pension for spouse after you with the Joint Life1option
  • Purchase Price is returned back to your nominee2
  • Option to avail a loan against your policy3
 
 

How much do I need to save for retirement?

It is important to consider your financial requirements after retirement to calculate the retirement kitty that will suit your needs. You must decide the amount required to maintain your lifestyle as well as take care of your increased medical expenses.

Why should I start planning for my retirement now?

Investment amount ₹1,50,000

at 8% inflation

Invest at 45 yrs age retirement amount will be

₹44,00,000

Invest at 45 yrs age retirement amount will be

₹74,00,000

Inflation at 7%

EXPENSES ₹ 2.66 LAKH
10 20 30 40 50 60
 

Power of compunding

Power of Compounding

If you start saving early, your money will get more time to grow. For example, if you start investing ₹ 1.5 lakh p.a. at the age of 45, your retirement savings will be ₹ 44 lakh at a rate of 8% or ₹ 31 lakh at a rate of 4%, by the time you are 60 years. However, if you had started saving the same amount from the age of 40, your retirement savings at 60 would be ₹ 74 lakh at 8% interest rate and ₹ 46 lakh at 4% interest rate.

Increasing Inflation

After retirement, you will need regular income to meet your expenses. The later you start saving for your retirement, the more you will need to save. For example, if your monthly expenses are ₹ 35,000 at the age of 30, then by the age of 60, they will be ₹ 2.66 lakh## due to inflation. To meet these expenses, your retirement savings will need a monthly contribution of ₹ 27,000. However, if you delay your savings by just five years, this amount will increase to ₹ 42,500 per month. ##Assuming inflation at 7%

Calculate Now

How do pension plans work?

Upon retiring, your regular income flow dries up and meeting day to day expenses can become a problem. A pension plan ensures that your income flow continues well beyond your retirement. Pension plans let you accumulate a corpus of funds through a lump sum investment or premiums that you pay over a period of time. Upon retirement, you receive regular payments from your corpus to ensure that the expenses can be met and your future is secure.

Types of pension plans in India

Immediate Annuity

Your pension begins almost immediately after a policy is purchased and a lump sum amount has been deposited by you.

Deferred Annuity

You may have a few years before you retire and are looking to secure your post-retirement years with regular income. Deferred annuity option provides you the flexibility to defer your annuity (pension) payouts (for life) after a specific deferment period, chosen at inception. The annuity rates are locked in for life. Premiums can be paid either as a single premium or regular premiums.

Joint Life Annuity

Your pension is paid to you for your lifetime. In case of an unfortunate event, your spouse is entitled to the pension.

National Pension Scheme

Managed by the central government, you can invest regularly to build a corpus, at the time of maturity you can withdraw up to 60% of the amount as lump sum and purchase an annuity plan with the remaining corpus to receive lifelong income.


COMP/DOC/Dec/2021/2012/7105

Benefits of pension plans

Regular Income Post Retirement

You receive a guaranteed amount of money on a regular basis after you have retired from work.

No-Risk Investment

Pension plans provide you with unconditional protection from any and all investment risks.

Insurance Cover

Most pension plans have an included insurance cover that protects you and your family from any possible financial burdens.

Option to Add Riders

You can enhance your pension plan by adding certain riders like ‘disability due to accident’ or ‘critical illness’.

Tax Benefits

Depending on the policy chosen by you, there are certain tax benefits and exemptions that you can avail of**.

Retirement pension benifits

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Features of pension plans

Annuity

The most important feature of a pension, it is the regular payment that you receive from your lump-sum investment.

Vesting Age

The vesting age is the particular age at which you start receiving your pension payments.

Accumulation Period

This refers to the entire period in which you pay premiums towards the accumulation of a corpus.

Payment Period

The payment period is the entire period during which you will receive the pension after your retirement.

Surrender Value

This is the amount you will receive if you choose to surrender the pension plan before its due date.

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Factors to consider while buying pension plans

Monthly Expenses

Once you retire and a regular source of income is over, your pension needs to cover all monthly expenses.

Inflation

You need to consider inflation because the cost of various day to day things are bound to rise in the future.

Life Expectancy

Your pension should ensure that money won’t run out for the remainder of your retired life.

Medical Expenses

Money can be needed for health checkups and any unforeseen medical treatments.

Outstanding Loans

Any outstanding loans need to be considered as they can take a sizeable chunk out of your pension.

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Eligibility criteria for Pension Plans

Minimum and Maximum Entry Age

For most pension plans, the minimum age of entry is generally 18 while the maximum entry age is 70.

Annual Premium Amount

There is no maximum limit, and the minimum annual premium amount is close to ₹ 50,000/- in most cases.

Minimum and Maximum Vesting Age

The minimum vesting age is 30 years while the maximum age is 80 years.

Premium Payment Term

Generally, the premium has to be paid for the same period as that of the chosen policy term.

Policy Term

Depending on the chosen pension plans the policy term generally ranges from 10 years to 30 years.

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Documents required to buy a Pension Plan in India

AGE PROOF

Birth Certificate / Passport / Driving License / Voter ID Card / High School Certificate

IDENTITY PROOF

Aadhaar Card / Passport / Driving License / Voter ID Card / PAN Card

ADDRESS PROOF

Aadhaar Card / Passport / Driving License / Ration Card / Electricity Bill / Telephone Bill

INCOME PROOF

Bank Statement Slip / Salary Slip / Income Tax Return File

MEDICAL REPORTS

Some insurance providers may ask for medical reports before you can buy a pension plan

Pension Plans/Retirement Plans FAQs

What is 'Pension'?

A pension is a fund into which a sum of money can be added during your employment years and you can draw periodic payments from this fund once you have retired. This way, a pension continues to provide an income to support you even after your retirement.

How is my pension calculated?

Your pension is calculated on the basis of your gender, savings accumulated, age at which the pension starts and mode of annuity.

Can a person have multiple pension plans?

Yes. A person can have multiple pension plans with private banks and other commercial pension plan policy providers. However, when it comes to the National Pension Scheme or other pension schemes by the Government of India, a person cannot have more than one.

Can I change the nominee of the retirement policy?

Yes, you can change the nominee of the retirement policy anytime during your life.

What are the tax benefits accompanying pension plans in India?

Depending on the type of plan chosen, pension plans in India provide certain tax benefits. In most cases, any contributions towards a pension fund can be deducted from your gross income leading to tax savings. At the time of maturity, you can also withdraw up to 60% of your accumulated corpus without paying any tax**.

How can I pay retirement plan premiums?

You can pay retirement plan premiums electronically using Net Banking, Credit or Debit Cards, Payment wallets, ECS linked payments and even through cheque deposits.

What is participating and a non-participating pension plan?

A participating plan enables the policyholder to share the profits of the insurance company in the form of bonuses or dividends. In a non-participating plan, the profits are not shared and no dividends are paid to the policyholder. Both these types of plans provide guaranteed life cover.

Should I save for my retirement or my child's education first?

You can start saving for your retirement as early as you start earning. This ensures that there is no stress during the latter half of your working life. Investment for your child’s education can start from the child’s birth and can run parallel with the investment for retirement.

ADVT NO. W/II/1212/2020-21

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** Tax benefits under the policy are subject to conditions under Section 80CCC, 10(10A) and other provisions of the Income Tax Act, 1961. Applicable taxes will be charged extra as per prevailing rates. Tax laws are subject to amendments made from time to time. Please consult your tax advisor before acting on above.

2 Source: https://knoema.com/atlas/India/topics/Demographics/Age/Life-expectancy-at-age-60-years

ICICI Pru Guaranteed Pension Plan
1There are 3 Annuity options available where you can get back your premium while you are alive, after attaining a certain age. To know more in details, please refer the product brochure.

*Joint Life can be either the spouse/child/parent or sibling of the Primary Annuitant.

#You have an option to choose from 8 Immediate Annuity and 3 Deferred Annuity options. To know more about the options in detail, please refer the product brochure.

~To know more about the exclusions and T&Cs of Critical Illness and Permanent Disability, please refer the product brochure.

^Tax benefits under the policy are subject to conditions under Section 80CCC, 115BAC and other provisions of the Income Tax Act,1961. Good and Service tax and Cesses, if any will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.

ICICI Pru Saral Pension Plan
1Under Joint Life option the Secondary Annuitant shall be the Spouse of the Primary Annuitant.

2 The purchase price, i.e., the price with which you bought the plan is returned to your nominee in case of an unfortunate event. Please refer the product brochure for more details.

3Please refer the product brochure for more details.

ICICI Pru Guaranteed Pension Plan UIN 105N181V02, ICICI Pru Easy Retirement UIN 105L133V03, ICICI Pru Saral Pension UIN 105N184V01

W/II/3774/2021-22

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