The regular income is the need of everyone, whether the individual is working or retired. During working life, due to a continuous flow of income, the routine expenses are taken care without much efforts or planning. However, while you are retired, you are more dependent on your savings. If lifetime savings are used on the day to day expenses, you will end up exhausting your corpus after few years. Hence, it is highly recommended to plan your monthly pension to meet your routine expenses without affecting your emergency fund. With the help of HDFC New Immediate Annuity Plan, you can assure of guaranteed income source of life.
Why HDFC New Immediate Annuity Plan?
When you retire after long years of services, you will receive lumpsum amount like gratuity, PF accumulation, leave encashment and others as a part of retirement benefit. If you do not plan the fund properly, it will be used in a few years leaving you empty handed when real need or emergency, in case, arises. HDFC New Immediate Annuity Plan gives you access to keep your lumpsum fund so that you can begin receiving your monthly income for your entire life.
Eligibility
| Parameters | Minimum | Maximum |
| Age At entry | 30 Years | 85 Years |
| Annuity Payout (Per frequency) | Rs 10,000 (Yearly)
Rs 5,000 (Half-yearly) Rs 3,000 (Quarterly) Rs 1,000 (Monthly) |
No Limit |
- There is no limit of the maximum purchase price and maximum pension receivable which helps you plan your income according to the corpus available. However, HDFC gives you the incentive to save more, by way of the higher rate of annuity for a higher amount of annuity. The company has established five bands of an annuity based on purchase price — higher the band, higher the rate of the annuity.
| Band | Maximum Eligible Amount of Band |
| 1 | Less than Rs. 2.5 Lacs |
| 2 | Rs. 2,50 Lacs- Rs 4.99 Lacs |
| 3 | Rs. 5 Lacs- Rs 9,99 Lacs |
| 4 | Rs. 1 Crore – Rs 4.99 Crore |
| 5 | Above Rs. 50 Lacs (No Limits) |
Annuity Options
There are some options you can avail under the HDFC Immediate Annuity Plan. Each option gives you a choice to select the options like:
- Desired monthly income
- Coverage to spouse required or not
- Return of purchase price required or not
Based on each option, your monthly income and future benefits vary. If you would like to avail the pension during your lifespan, you can choose Single Life Annuity. In case you want to avail pension for your spouse after your unfortunate departure, you can choose Joint Life Annuity. Both types of annuity give you further options to select your present and future benefits.
Options Under Single Life Annuity
| Sr. No. | Option | Features |
| 1 | Life Annuity | · Lifetime pension
· The higher amount of pension during life. · No benefit after death |
| 2 | Life Annuity with the return of purchase price | · Lifetime pension
· Relatively moderate pension amount during life. · Nominee gets a return of 100% purchase price after the death of the life assured.
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| 3 | Life Annuity with return of balanced purchase price | · Lifetime pension.
· A reasonable amount of pension during life. · If pension received is less than the purchase price, the nominee gets the difference after the death of the life assured.
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| 4 | Life Annuity with a guaranteed period | · Lifetime pension
· If life assured dies during a guaranteed period, the nominee gets pension up to the guaranteed period. · If life assured continues to live beyond the guarantee period, he would get a regular pension till death, and no further amount will be paid to the nominee. |
| 5 | Life Annuity with 5% escalation | · Lifetime pension
· 5% increment in pension every year, after completion of one year · After the death of the life assured, pension ceases, and no further payment is payable. |
| 6 | Life Annuity with a partial return of purchase price after seven years | · Lifetime pension
· If life assured survives beyond seven years, 30% of the purchase price is paid to him, and pension continues as usual. In this case, after death, the nominee gets balance 70% of the purchase price. · If life assured dies before seven years, the nominee gets 100% of the purchase price. |
| 7 | Life Annuity with return of purchase price for treatment of Life-threatening diseases. | · Lifetime pension
· 100% purchase price is returned in case of critical illness or death, and no further pension is payable. · Critical illness is specified in policy terms and conditions. |
Options Under Joint Life Annuity
The joint life annuity takes care of life assured and the spouse, ensuring a regular flow of income for life assured and the spouse, both. The person whose life is primarily covered under HDFC New Immediate Annuity Plan is called Primary Annuitant, and the person whose life is covered after the demise of the primary annuitant is called Secondary Annuitant.
| Sr. No. | Options | Features |
| 1 | Joint Life Annuity with 100% annuity to the secondary annuitant | · Lifetime pension
· Pension income continues till anyone or both the annuitants are alive · Even if one annuitant is alive, the pension will continue to come · When both annuitants die, the pension will cease, and no further amount is payable |
| 2 | Joint Life Annuity with 50% annuity to the secondary annuitant | · Lifetime pension
· If Primary annuitant deceases, the secondary annuitant gets 50% pension throughout his or her life · If Secondary annuitant predeceases, the primary annuitant will continue to get the pension at the regular rate · No further amount is payable after the demise of both the annuitant |
| 3 | Joint Life Annuity with 100% annuity to secondary annuitant and return of purchase price | · Lifetime pension
· Pension payable till at least one annuitant survives · After the demise of both lives assured, the nominee gets 100% of the purchase price |
| 4 | Joint Life Annuity with 50% annuity to secondary annuitant and return of purchase price | · Lifetime pension
· After the demise of the primary annuitant, the secondary annuitant receives 50% pension till life · If secondary annuitant predeceases, the primary annuitant continues to receive regular pension · After the demise of both lives assured, the nominee gets 100% of the purchase price |
Annuity Payout Frequency
You can choose how would like to receive your pension income. You can choose the monthly, quarterly, half-yearly or yearly option to receive your pension income. Usually, the yearly pension income is about 4% higher than monthly pension income. Hence, if you can plan systematically, yearly pension option is better. However, the criteria to select the frequency should be based on your regular need and planning capability. You can also choose quarterly or half-yearly option to strike a balance between return and convenience.
Frequently Asked Questions (FAQs)
- Should I buy the annuity plan online or offline?
There is no difference in benefit or premium payment whether you buy the annuity online or offline. However, the online mode of purchase is convenient and faster. You can also read the details online about the policy before you purchase the same. You can also use the pension calculators available online to decide the premium payment for the desired amount of the pension income.
In case you need more clarity and consultation to choose the proper plan for you, you can buy the plan in the offline method. All you have to do is to call the insurance company’s helpline number. The tele-executive will arrange your meeting with the advisor to help you to choose a correct plan and to compile the documents.
- Can I cancel the HDFC New Immediate Annuity Plan once I avail the same?
HDFC Life gives you the “Free Look Period” of 15 days after you avail the policy. You can review the pension amount, the premium paid and survival benefits mentioned in the policy. In case you have any doubt, you can contact the insurance company for clarification. Still, if you are not satisfied with the resolution from the insurance company; you can request to cancel the policy within “Free Look Period” of 15 days. Your money shall be refunded back to your bank account after deduction of nominal stamp duty.
- What is the surrender benefit of the HDFC New Immediate Annuity Plan?
To avail lifetime pension benefit, it is advisable to continue with the plan forever. However, in specified options, surrender value benefits up to 10% of the purchase price is available.
- Which diseases are qualified as “Critical illness” to be eligible for a return of purchase price?
The purpose of returning the purchase price is to utilize the lump sum amount to fight against the life-threatening disease. In general, diseases like stroke, kidney failure, malignant cancer, major organ transplant, bypass surgery, and heart attack are classified as critical illness. You have to provide medical reports and doctors’ advice for further treatment to avail the return of your purchase price. It is worth to note that after the return of purchase price, your pension income ceases, hence you should exercise this option prudently, after due evaluation of every option available with you.