What Are the Features and Benefits of Saral Pension Yojana?

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Since April 1, 2022, the Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for every life insurance company in India to offer Saral Pension Yojana. This immediate annuity plan has easy-to-understand features and standard terms and conditions to help you make an informed decision easily. Like a term life insurance plan, an annuity plan is a safe long-term investment that can offer financial growth protected from taxation and inflation. Here is all you need to know about the Saral Pension plan and its features and benefits. 

What is Saral Pension Yojana?

It is a pension plan which works as a single-premium immediate annuity product. Saral Pension plan offers a regular income for the golden years of your life and secures your loved ones financially after your death.  

Features of Saral Pension Yojana

  • This immediate annuity plan is non-participating and non-linked. 
  • You need to pay a single premium to avail the plan. 
  • The frequency of the payment is monthly, quarterly, half-yearly or yearly.  
  • Saral Pension Yojana offers both single and joint life annuity options. 
  • After 6 months of purchasing the policy, you can borrow a loan against it.  
  • You can avail tax benefits based on prevailing tax laws (that are subject to change). 

Benefits of Saral Pension Yojana

Survival Benefit:

Single life annuity: Throughout the lifetime of the annuitant, part payments are made as per the chosen frequency. 

Joint life annuity: As long as the primary and/or secondary annuitant lives, part payments are made depending on the chosen frequency.  

Death Benefit:

Single life annuity: Once the annuitant passes away, the payments are stopped immediately. Then the nominees or legal heirs get the full purchase price from the insurer. 

Joint life annuity: After the first demise of one of the annuitants, the other keeps getting the whole annuity amount so long as he/she lives. After the other survivor passes away, the annuity payments stop instantly. Then the nominees get the whole purchase price of the Saral Pension Yojana

Tax Benefit:

The premiums paid and claims made for this plan are eligible for tax benefits according to Section 80CCC and Section 10(10A)(iii) under the Income Tax Act of India. 

Loan against Policy: 

After 6 months of the plan’s commencement, a loan can be taken against the Yojana by the life assured. The interest payable annually on the loan must not be more than 50% of the policy’s annual annuity amount. 

A joint life annuity allows the primary annuitant to take a loan against the plan. After his/her death, the secondary annuitant can borrow a loan. 

Eligibility Criteria for Saral Pension Yojana

CriteriaMaximumMinimum
Entry Age80 years from the last birthday 40 years from the last birthday
Policy TermThis is a lifetime policy.
Purchase PriceIt depends on the annuity amount.
Annuity AmountIt has no limits.Monthly: ₹1,000

Quarterly: ₹3,000

Half-yearly: ₹6,000

Yearly: ₹12,000   

 

If you want to be covered by an annuity plan with simple features and terms, opt for Saral Pension Yojana. To maximise the financial security of yourself and your family, you can buy this annuity plan together with a term plan from a reputed insurer. 

 

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