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Tata AIA Life Fortune Guarantee Pension Plan – Should you invest?

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Tata AIA Life Launches Fortune Guarantee Pension Plan – Features, Eligibility, Positive Factors, Risk Factors and Review

Tata AIA Life Fortune Guarantee Pension Plan – Features and Eligibility

Tata AIA life insurance has launched guarantee pension plan few days back. This pension scheme comes with various options like immediate annuity and deferred life annuity scheme and several other key features. There is guaranteed addition also in this pension scheme. Should you opt for Tata AIA Fortune Guarantee Pension Plan? What are the hidden factors in such pension schemes?

Also Read: Bharti Axa Life Unnati – All in one investment plan – Should you buy?

Key Features of Tata AIA Life Fortune Guarantee Pension Plan

This is non linked, non participating Annuity Plan. Here are the key features of this annuity plan:

  • There are multiple annuity options in this pension plan.
  • Plan offers high purchase price benefit.
  • There is an option to increase the annuity through top-up premiums.
  • Loan available in this annuity scheme.
  • Income tax benefits on the premiums paid.

What are various Annuity Options in Tata AIA Guarantee Pension?

It comes with below annuity options:

1) Immediate life annuity

2) Immediate life annuity with return of purchase price

3) Deferred life annuity (GA-I) with return of purchase price

4) Deferred life annuity (GA-II) with return of purchase price

Option 1 and 2 comes to single life, joint life and with a single premium.

Option 3 and 4 comes with the single life and joint life basis and with a single premium, regular premium and limited premium payment.

What is the eligibility criteria to take this pension plan?

Eligibility to take Tata AIA Life Fortune Guarantee Pension Plan

How much Annuity Pension is paid?

Annuity pension amount would depend on age and whether it is single life, joint life, single premium, regular premium or limited premium payment term. Below are the sample annuity amount payable for single life and for Rs 25 Lacs single premium purchase price.

Sample Annuity income for single life - Tata AIA Life Fortune Guarantee Pension Plan

What are various benefits in this Guarantee Pension Plan?

1) Death Benefits

The Death benefit would be paid on the death of an annuitant in case of a single life plan and on the death of two annuitants in case of a joint life plan. Below are the death benefit details which would depend on the option chosen by annuitant.

2) Guaranteed Additions

During the deferment period, guaranteed additions would accrue for each policy period for option 3 and 4.

Guaranteed Additions-I – Under this addition, GA would be 1/12th of the yearly annuitant amount

Guaranteed Additions-II – Under this addition, GA would be 1/12th of the 6% of the total premiums paid.

3) Surrender Benefit

Surrender value would be higher of Guaranteed Surrender Value (GSV) or Special Surrender Value (SPV) which is indicated in the policy document.

Surrender benefit is payable to all options except for Option-I.

4) Maturity Benefit

There is no maturity benefit available in the plan.

Positive Factors in Tata AIA Life Fortune Guarantee Pension Plan

Here are some of the major positive factors in this pension plan.

1) Annuity scheme comes with various annuity options. One can take immediate annuity plan or deferred annuity plan depending on the need.

2) Pension plan provides high purchase price benefit to encourage more savings.

3) One can increase the annuity amount with a top-up of premiums.

4) It provides guarantee additions every year.

5) Such pension schemes provide regular safe income.

6) There are two riders available in the plan.

7) The annuitant can get a loan on the policy, six months after the policy’s commencement but not on Immediate Life Annuity. Under Joint Life, the primary annuitant can take a loan which the secondary annuitant can avail in case of the primary annuitant’s death.

Negative Factors in Tata AIA Life Fortune Guarantee Pension Plan

Here are some of the major negative factors:

1) Such annuity schemes provide low returns. Take an example of 50 year old who invests 25 Lacs gets 6% as payout (with return of purchase price). One can invest such amount in simple FD and get life long returns.

2) In case of any emergency and one want to opt to surrender such pension scheme, it provides low surrender benefit.

3) No death benefit if annuitant commits suicide within 12 months of taking the annuity scheme.

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Should you invest Tata AIA Life Fortune Guarantee Pension Plan?

You might be wondering whether you should buy this Fortune Guarantee Pension Plan from Tata Life Insurance.

Annuity schemes provide safe returns for life long.  However, such pension schemes come with low returns.

If you are a low risk investor, looking for safe investment option post retirement with minimal returns, you can opt for such pension schemes. However, remember that such returns would not beat inflation.

Moderate and high risk takers can avoid such pension plans and invest in equity mutual funds that can generate higher returns.

Data source: Tata AIA Fortune Guarantee Pension Policy

Suresh KP

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