Sold Only by Life In­sur­ance Com­pa­nies

Consumer Voice - - Immediate Annuity Plans -

It is be­cause this prod­uct com­bines an­nu­ity pay­ments to the an­nu­i­tant till he is alive or to his spouse/nom­i­nee (plan op­tion) upon his death. So, since life of the in­di­vid­ual is linked to this prod­uct, it is only the life in­sur­ance com­pa­nies that of­fer this prod­uct in the mar­ket.

Ben­e­fits Cov­ered

There is no life-cover ben­e­fit in the scheme. It is an im­me­di­ate an­nu­ity prod­uct that is in­vested in govern­ment se­cu­ri­ties to en­able the growth of the fund in­vested, so that im­me­di­ate pay­ments are ef­fected for an­nu­i­tants based on the pay­ment mode cho­sen by them.

Some of the life in­sur­ance com­pa­nies are of­fer­ing the fol­low­ing ben­e­fits:

Only a few com­pa­nies are of­fer­ing ‘sur­ren­der value’ as part of the plan with spec­i­fied pay­ment op­tions. Most com­pa­nies in­clud­ing Star Union Dai­ichi and HDFC Life do not of­fer this ben­e­fit.

The ‘Sur­ren­der’ Op­tion

Once you start tak­ing the an­nu­ity, if you feel that you want to stop it (for what­so­ever rea­son), you need to tell the in­sur­ance com­pany that you want to ‘sur­ren­der’ the an­nu­ity plan. The in­sur­ance com­pany will then deduct a charge (sur­ren­der charge) and re­turn you a cer­tain amount of money (sur­ren­der value). How­ever, sur­ren­der of an im­me­di­ate an­nu­ity plan can be done only if the con­tract of the an­nu­ity plan al­lows it in the first place, and only for cer­tain types of an­nu­ity op­tions.

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