Saral Pension Plan

What this product is

A standardized, IRDAI-mandated single-premium immediate annuity plan that converts a lump sum into a guaranteed income for life, with your full purchase price returned to your nominee on death.

You might need this if…

• You have a retirement lump sum (PF withdrawal, gratuity, savings) and want to convert part of it into a guaranteed lifetime income
• You want a simple, standardized product - "Saral Pension" is a common structure IRDAI requires most insurers to offer, so it's easy to compare across companies
• You want your invested purchase price protected and paid to your family when you die, not lost to the insurer
• You may want to cover a spouse too, via the joint-life option

How it actually works

• Single premium only - you pay once as a lump sum; entry age typically 40-80 years (down to 70 for point-of-sale purchases)
• Two structures: Life Annuity with Return of Purchase Price (income for your life, 100% of purchase price returned to nominee on death), or Joint Life Last Survivor Annuity with Return of Purchase Price (income continues until both spouses have passed, then purchase price returned)
• Choose payout frequency: monthly, quarterly, half-yearly, or annual, with minimum payouts from about ₹1,000/month up to ₹12,000/year
• The annuity rate is locked in at purchase and guaranteed for life - it doesn't change with markets afterward
• A special early-surrender allowance applies if you, your spouse, or a child is diagnosed with a specified serious illness (typically after 6 months)

Worked example

Worth knowing before you decide

• Once you buy, the annuity rate is locked for life - if interest rates rise later, you can't get a better rate on that money
• Since it's a single-premium product, all your capital goes in upfront - there's no way to top up gradually
• Early exit outside the serious-illness allowance is generally not possible - annuity plans like this are illiquid by design
• Annuity income is taxable as per your income slab in the years you receive it

Official source

⌟ Official product brochure

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