ABSLI Empower Pension – SP Plan is an especially designed insurance plan by Aditya Birla Sun Life Insurance to make your retired life a comfortable experience. Instead of being dependent on your children, you can now be self-reliant, financially independent and enjoy your retired life. In a way, this plan helps you to get a regular source of income (like a pension) after you retire to lead a financially comfortable life.
ABSLI Empower Pension – SP Plan Details
What is ABSLI Empower Pension – SP Plan?
ABSLI Empower Pension – SP Plan is a unit-linked, non-participating single pay pension plan which involves just one premium to create a retirement corpus. The period when you are building your retirement corpus is known as ‘accumulation period.’ When you as a customer vest your policy, you will enter the income phase. Once you pay the premium, returns are generated over plan tenure.
- It is a unit-linked plan wherein, the single premium is invested in market-linked funds to get attractive returns.
- The plan offers a Smart Option wherein the company manages your investment portfolio automatically in a manner mentioned in the contract.
- Three types of Guaranteed Additions are added to the Fund Value for an enhanced growth.
Eligibility
| Particulars | Minimum | Maximum |
| Entry age (Last Birthday) | 25 years | 70 years |
| Vesting Age (Last Birthday) | NA | 80 years |
| Plan tenure | 5 years | 20 years |
| Premium payable | Rs. 1 lakh | No limit |
| Premium Paying Term | Single Pay | Single Pay |
| Premium payment mode | Single Pay | Single Pay |
Features
- It gives benefits at vesting.
- You, as a policyholder, get guaranteed additions.
- You get two fund options to invest in – Income Advantage Guaranteed and Maximiser Guaranteed.
- You get Smart Option to invest in a pre-determined proportion.
- You have an option to choose risk profile.
- It offers flexible vesting date.
- You need to invest only once and yield benefits for a lifetime.
- No policy loan is available under this plan.
- Partial withdrawals are not allowed under this plan.
How Does ABSLI Empower Pension – SP Plan Work?
- Policyholders have to decide on the amount of single premium you want to pay along with other necessary criteria – the plan tenure and the risk profile (Aggressive, Moderate, Conservative) based on which the premium would be allocated.
- The premium paid is invested as per the Smart Option after deducting the allocation charge. The net premium is allocated to Maximizer Guaranteed and Income Advantage Fund. The company manages the investment in both the funds as per a pre-specified proportion over the policy tenure. The allocation rate usually depends on the risk profile and tenure chosen by you. Over the policy tenure, the allocation would be automatically shifted to less risky funds to protect the returns from market volatility.
- Death benefit is paid in case the policyholder dies during the tenure of the plan.
- The Vesting Benefit is paid when the plan tenure ends.
- Switching/premium redirection is not applicable under this plan.
- Being a non-participating pension plan, no bonus is applicable.
Also Read: ABSLI Empower Pension Plan: Features & Review
Benefits
Death Benefit
- In case the life insured passes away while the policy is in force, the higher of the Guaranteed Death Benefit or Fund Value till the date of intimation of death is payable to the nominee in the policy.
- The Guaranteed Death Benefit is higher of 105% of the single premium paid or accumulation of the single premium paid at a compounding guaranteed rate.
- The Guaranteed rate varies by the risk profile chosen and is equal to 0.5% per annum, 1.5% per annum and 3.0% per annum for Aggressive, Moderate and Conservative risk profiles, respectively.
- The nominee is free to decide whether to utilize the entire proceeds or a part of it to purchase an annuity or to withdraw the death benefit proceeds.
Vesting or Maturity Benefit
- You will receive the higher of your Guaranteed Vesting Benefit or the Fund Value on your vesting date. The Guaranteed Vesting Benefit, once assigned at the inception of the policy will remain the same.
- The Guaranteed Vesting Benefit is revised every year on April 1st, subject to a minimum of 101% of the single premium paid and it is applicable for policies issued thereafter.
- The vesting benefit can be utilized in four different ways:
- By extending the accumulation period
- By utilizing the entire proceeds to purchase a single premium deferred pension plan
- By commuting to the extent allowed under Income Tax Act, and by utilizing the balance amount to purchase annuity at the then prevailing annuity rate.
- By entering into an income annuity phase
| Years of Vesting | Risk Profile | ||
| Aggressive | Moderate | Conservative | |
| 5 | NA | NA | 115% |
| 6-10 | 103% | 110% | 120% |
| 11-15 | 106% | 119% | 140% |
| 16-20 | 109% | 128% | 160% |
Commutation Benefit
You, as a policyholder have a choice to take up 1/3rd of the benefits as a tax-free lump sum as per the current income tax regulations. The other 2/3rd amount can be received as a regular income.
Deferment of Vesting Benefits
- In case you want to extend/deferment of the accumulation period, it can be done, provided the life insured is aged below 55 years and the maximum is not over 80 years – the maximum limit of vesting age.
Guaranteed Additions
- Additional units in the form of Guaranteed Additions are available under the policy.
- 6th policy anniversary and onwards, Guaranteed Addition is 0.25% of the average Fund Value in the last 12 months, plus
- 11the policy anniversary and onwards, it is 0.35% of the average Fund Value in the last 12 months, plus
- On 16th policy anniversary and onwards, it is 0.35% of the average Fun Value in the last 12 months.
Tax Benefits
Service tax is levied for the charges applicable under this plan. This plan also offers tax benefits under Section 80CCC and Section 10 (10A) of the Income Tax Act, subject to the current tax laws.
Surrender Value
If you surrender the policy within the lock-in period of 5 years, the fund value after deducting Policy Discontinuance Charges is transferred to the Pension Discontinued Policy Fund. This policy is credited with the actual return (less fund management charge of 0.50% per annum) or minimum guaranteed interest rate of 4% per annum, whichever is higher. The proceeds are payable upon completion of first five policy year or the passing away of the insured, whichever is earlier.
Once you surrender the policy after completion of the lock-in period of 5 years, you will be paid the fund value immediately.
Plan Charges under BSLI Empower Pension- SP Plan
Policy Administration Charges: This charge is levied at the beginning of every policy month by canceling the appropriate units from the investment funds. The policy administration charge is Rs 20 per month during the first five years of the policy. Sixth year onwards, the charges will increase to Rs 25 per month, which later would rise to 5% per annum, thereafter being subject to a maximum of Rs. 6000.
Premium Allocation Charge: This charge is deducted from your single premium. The amount is invested with the fund options. The premium allocation charge of 3% is levied on the single premium.
Investment Guarantee Charge: The daily unit price of the investment fund is levied with an investment guarantee charge. This charge is 0.25% per annum, and it can be revised up to a maximum of 0.50% per annum.
Fund Management Charges: The fund management charge is levied at 1% per annum for income advantage guarantee and 1.35% per annum for Maximiser Guaranteed. The fund management charge may be revised to a maximum of 1.35% per annum, subject to approval from the IRDAI.
Miscellaneous Charges: A miscellaneous charge is levied for any additional servicing request and is charged at Rs. 250 per request. This charge may be increased up to Rs. 500 per request for an additional servicing request. Any increase in the miscellaneous charges is subject to approval from the IRDAI.
FAQs
Q1. How do I surrender the policy?
If you surrender the policy within the lock-in period of 5 years, the fund value after deducting Policy Discontinuance Charges is transferred to the Pension Discontinued Policy Fund. This policy is credited with the actual return (less fund management charge of 0.50% per annum) or minimum guaranteed interest rate of 4% per annum, whichever is higher. The proceeds are payable upon completion of first five policy year or the passing away of the insured, whichever is earlier. Once you surrender the policy after completion of the lock-in period of 5 years, you will be paid the fund value immediately.