SBI Life Retirement Plans

SBI Life Insurance Company is a private life insurer which is present all across India with a network of more than 800 branches. The company offers a range of life insurance plans meant to fulfil every financial need of the customer. Individuals can plan for their children’s secured future, the family’s secured future, investments and protection through life insurance plans offered by the company. One such type of plan which the company offers is a retirement plan. There are a variety of plans which are designed as retirement insurance plans helping individuals create a corpus for their retirement. Let’s understand retirement plans in details –

What are retirement plans?

Retirement plans are also called pension plans. These plans help individuals create a corpus for retirement and then receive lifelong incomes after they retire. Retirement plans can be of two kinds. The first one is the deferred annuity plan wherein there is a specified policy tenure chosen by the individual. Policyholders pay premiums during the policy tenure to build up a retirement corpus. When the tenure ends, the accumulated corpus is then used to buy annuities which are regular incomes payable throughout the annuitant’s life. The other kind is the immediate annuity plan. Immediate annuity plans have no policy tenure. Individuals pay a lump sum premium and buy annuity pay-outs which are paid immediately from the next frequency chosen by the policyholder. Thus, retirement plans promise retirement funding and help individuals be financially free even after they retire.

Salient features of retirement plans

Retirement or pension plans have the following salient features –

  • Premiums paid for the plans qualify as a deduction under Section 80CCC of the Income Tax Act. The limit of deduction is up to INR 1.5 lakhs which also includes deductions available under Section 80C
  • In deferred annuity plans, the policy tenure when premiums are paid is also called the accumulation phase
  • The period over which annuity is paid is called the annuity phase
  • On maturity of a deferred annuity plan, 1/3rd of the accumulated corpus can be taken in cash. This withdrawal is called commutation of pension and this commutation is tax-free under Section 10 (10A) of the Income Tax Act.
  • The remaining 2/3rd part of the corpus is paid in an annuity.
  • Annuity payouts are taxable in the hands of the annuitant
  • Immediate annuity plans allow joint life annuities too wherein annuity continues to be paid to the spouse of the annuitant in case of the annuitant’s early death.

Retirement plans offered by SBI Life

SBI Life offers the following types of retirement plans –

  • SBI Life - Saral Pension
    Saral Pension is a participating traditional pension plan which earns bonuses. The plan’s features are as follows –
    • There is an additional rider option to enhance coverage available under the plan
    • The policyholder can increase the vesting age or the accumulation period to build a better corpus
  • SBI Life - Retire Smart
    This is a unit linked pension plan which allows individuals to build an attractive corpus through market-linked returns. The features of the plan include the following –
    • An assured benefit of up to 210% of an annual premium is promised despite the plan being a unit linked plan
    • Premiums can be paid throughout the policy tenure or for a limited period
  • SBI Life - Annuity Plus
    This is an immediate annuity plan which pays a regular income throughout the policyholder’s life. The plan’s features are notable and include the following –
    • The annuitant has the choice to add a family member to receive annuity pay-outs after the annuitant’s death
    • Accidental Death Benefit Rider can be taken for better coverage
    • Various types of annuity payout options are available to choose from

FAQs

Vesting means when the plan matures. In case of deferred annuity plans, when the chosen plan tenure comes to an end and the insured is alive, the maturity of the plan is called vesting.


On vesting, the policyholder can choose from any of the following options:

  • Commute 1/3rd of the corpus in a lump sum and avail annuity from the remaining balance
  • Avail annuity from the entire corpus
  • Use the corpus to buy a single premium deferred annuity plan and receive annuity payments later

In a deferred annuity plan, if the insured dies, a death benefit is paid. This benefit can be received in a lump sum by the nominee. The nominee can also choose to avail annuity payments from the death benefit.


In immediate annuity plans, the annuity pay-outs stop after the annuitant dies. If the annuity is a joint life annuity, the payouts would continue even after the death of the primary annuitant till the surviving annuitant is alive. It would stop when the second annuitant also dies.


The premium paid to purchase an immediate annuity plan is called the purchase price.