Overview Of Immediate Annuity Plans Offered By Life Insurance Companies In India:

Retirement is an important milestone in anyone’s life.There are different options available for post retirement income & we will look at one of them – Immediate Annuity Plan.

Immediate Annuity Plans: As name indicates,policy holder needs to purchase the annuity by paying lumpsum purchase price. Annuity payouts are immediate as per annuity payment mode chosen from commencement of policy.Different modes available are monthly,Quarterly,half yearly or annually.

Immediate Annuity Insurance Plans:

Till following immediate annuity plans are available.

1. Aegon religare Insta Pension Plan.
2. Bajaj Allianz  Pension Guarantee.
3. Birla Sunlife Immediate income plan.
4. HDFC Immediate Annuity.
5. ICICI Pru Immediate Annuity.
6. Incomesurance – From IDBI federal Life Insurance.
7. LIC Jeevan Akshay VI Immediate annuity.
8. Reliance Immediate Annuity Plan.
9. TATA AIA Easy Retire.

Its not possible to discuss features of each plan but common features among immediate annuity plans are as below:

Different options available for policy holder:

1. Life Annuity without return of purchase price:Policy holder get annuity till he/she is alive and purchase price is not returned to nominee.Annuity rates are higher for life annuity plans.
2. Joint Life Annuity:Under this option,annuity is payable till either policy holder or spouse is alive.Purchase price is not returned back to nominee.
3. Life Annuity with return of purchase price:Annuity is paid to policy holder for life time & purchase price is returned to nominee.
4. Annuity Guaranteed for 5 Yrs /10 Yrs/15 Yrs & life thereafter: In this option,annuity is guaranteed for first initial years 5/10 or 15 yrs and after this annuity is payable at rate of life annuity.Annuity payouts are generally higher for these initial years.

Sample Annuity payout rates of – Bajaj Allianz Life Annuity-Return of purchase price:As already stated,under this option annuity will be paid for life time & purchase price will be returned to nominee on death of policy holder.

Following rates are annual basis, per lakh & for return of purchase price

AgeYrs	Purchase Price Band
	Less than 2L	2L – 5L	5L – 10L	10L – 15L	15L -25L	25L & Above
55	7189.86	7237.71	7347.35	7275.32	7474.15	7489.98
60	7221.78	7273.28	7387.12	7418.63	7519.46	7535.11

Above 25 lakh – annuity is 7489.98 (55 Yrs) and 7535.11 (60 years)

Note: Rates subject to change so confirm rates while buying the annuity.

Immediate annuity rates are depends on following factors:

1. Current and nearer interest rate scenario
2. Current and expected profit of insurance company.
3. Age of policy holder – Higher is the age,annuity rates shall be slightly higher.
4. Amount of policy holder – If purchase price is higher then expected annuity will be at higher rate.

Drawbacks of Immediate annuity plans:

1. Low annuity rate is the major drawback of any annuity plan.Most of the banks as well as post offices offer the schemes of regular payouts and short term rates are higher for them.
2. Mostly no loan facility for immediate annuity plans.
3. Immediate annuity plans can not be surrendered.(Though there is free look period).
4. Annuity payouts are taxable as per current laws.

Advantages of immediate annuity plans:

1. Though rates are low income is  guaranteed for life.Annuity income is for long term.
2. These are regulated products so considered to be secure.

One can’t say whether its good product or not.Its always customized situation and policy holder should study all pros and cons before opting the immediate annuity plan.