Having a retirement corpus is essential if you want to live a worry-free retired life. Therefore, you need to build a retirement corpus when you are working so that the corpus would fund your retired life. SBI Life, therefore, offered retirement oriented pension plans which help you in building a retirement corpus. There are three types of pension plans offered by SBI Life but before discussing the plans, let’s understand what pension plans are all about –

SBI Pension Plans – Overview

SBI Pension plans come in different variants. These plans help you plan for your retirement and then fund your retirement through regular pension incomes. You can find deferred annuity plans which help you create a retirement fund. On the other hand, there is an immediate annuity plan too which pays regular annuities for your lifetime thereby providing you with a source of income in your retired life. Let’s understand the two annuity plans in details –

Deferred annuity plans

Deferred annuity plans are those which are savings oriented insurance plans. You can choose a term for the plan and pay premiums over the chosen tenure. The premiums would accumulate into a corpus. In case of death during the term of the plan, a death benefit would be paid. On the other hand, when the deferred annuity plan matures, it is said to vest. On vesting, the policyholder has the following three options –

  1. Buy an immediate annuity plan from the vesting benefit and start receiving lifelong annuities
  2. Commute 1/3rd part of the corpus and withdraw it in cash. Use the remaining corpus to receive lifelong annuities
  3. Defer the vesting date. SBI Life offers deferment till 70 or 80 years of age after the plan matures.

So, availing annuities through the vesting benefit is a must whether you receive annuities immediately after vesting or after some years. Deferred annuity plans can be offered as traditional savings plans or as unit-linked insurance plans.

Immediate annuity plans

Under immediate annuity plans, the annuity payments start immediately after the policy is bought. You pay a lump sum to buy the plan. Thereafter, lifetime annuities are paid from the lump sum premium that you have paid. You can choose to receive annuities in different modes whichever suits your requirements.

List of SBI Pension Plans

As mentioned earlier, SBI Life offers different types of pension plans. Let’s check the pension plans offered and their features.

1. SBI Life – Saral Pension Plan

This is a traditional deferred pension plan which helps you accumulate a secured retirement corpus over the term of the plan. The highlights of the plan are as follows –

  1. Premiums for the policy can be paid through regular premiums or through a single premium
  2. This is a participating pension policy which earns bonuses
  3. Bonus under the policy is even guaranteed in the first five years
  4. From the sixth policy year, the bonus would depend on the profits earned by SBI Life Insurance
  5. The sum assured earns a guaranteed interest of 0.25% per annum compounded annually over the tenure of the plan. This ensures that your corpus increases at the time of maturity
  6. There is an optional SBI Life Preferred Term Rider under the policy which promises an enhanced benefit in case of death
  7. On death during the term, the aggregate premiums paid earning a return of 0.5% per annum would be refunded along with the vested bonus and any terminal bonus
  8. Eligibility conditions of SBI Life – Saral Pension Plan

    Entry age

    18 years to 55 years

    Term of the policy

    5 years to 30 years

    Sum assured

    INR 25,000 to INR 50 lakhs

    Premium amount

    Depends on the sum assured, age and term

    Premium paying term

    Regular premium- equal to the policy term

    Single premium – once

2. SBI Life – Retire Smart Plan

This SBI pension plan is a unit-linked pension plan which not only allows you to earn market-linked returns on your investments, it also guarantees a minimum return thereby protecting your investments from market volatility. The features of the policy are as follows –

  1. You can choose to pay premiums regularly or for a limited duration
  2. The premiums paid are invested under the ‘Advantage Plan’ strategy. Under this strategy, as the plan approaches maturity, the investment shifts from equity-oriented fund to debt-oriented fund thereby protecting the returns from market volatility
  3. Under the ‘Advantage Plan’, a minimum fund value of 101% of the aggregate premiums paid is guaranteed on maturity
  4. When the plan matures, 1.5% of the fund value is added to the fund as terminal additions
  5. If you choose a term of 15 years, you would get guaranteed additions @ 10% of the annual premium, every year from the end of the 15th policy year
  6. 105% of the aggregate premiums paid is the guaranteed minimum death benefit under the policy
  7. If you are aged below 55 years on maturity, you can defer the vesting age to up to 80 years
  8. Eligibility conditions of SBI – Life Retire Smart Plan

    Entry age

    30 years to 70 years

    Term of the policy

    10 years or 15 years to 35 years

    Premium amount

    Regular premium:

    Minimum – INR 24,000/year

    Maximum – no limit

    Limited premium:

    Minimum – INR 40,000

    Maximum – no limit

    Premium paying term

    Regular premium- equal to the policy term

    Limited premium:

    Term 10 years – 5 years or 8 years

    Term 15 to 35 years – 5 years, 8 years, 10 years or 15 years

3. SBI Life – Annuity Plus Plan

This is an immediate annuity plan whose objective is to provide you with guaranteed incomes in the form of annuities throughout your life. The salient features of the plan are as follows –

  1. There are eight annuity payment options that you can choose from. These options are as follows
    1. Lifelong annuity income
    2. Lifelong annuity income with a return of invested premium
    3. Lifelong annuity income with return of investment premium in instalments
    4. Lifelong annuity income with the return of the balance premium
    5. Lifelong annuity income which increases annually by 3% or 5%
    6. Lifelong annuity income which is guaranteed for 5, 10, 15 or 20 years and thereafter payable for life
    7. Lifelong annuity income with 50% or 100% annuity income for the surviving partner’s lifetime
    8. Lifelong annuity income with 50% or 100% annuity income for the surviving partner’s lifetime and return of the invested premium after the death of the last survivor
  2. The plan, therefore, offers annuity payments even to your partner so that they are secured in case of your death
  3. You can choose the second annuitant to be your spouse, parents, children, siblings or parents-in-law
  4. If you pay a higher amount of premium, the annuity rates would be higher
  5. There is a discount of 0.75% on the premium if the annuity is being bought using the corpus of the National Pension Scheme
  6. Another 2% premium discount can be availed if the product is bought online directly from SBI Life
  7. Eligibility conditions of SBI Life – Annuity Plus Plan

    Entry age

    Minimum:

    If the plan is bought using the proceeds of a deferred annuity plan – 0 years

    If the plan is bought independently – 40 years

    If the plan is bought under QROPs – 55 years

    Maximum – 80 years

    Annuity amount

    Minimum – INR 1000/month

    Maximum – no limit

    Premium amount

    Depends on the annuity amount and age

Riders under SBI pension plans

Only one rider is available under SBI Life – Saral Pension Plan. This rider is called the SBI Life Preferred Term Rider which promises an additional benefit if the insured dies during the term of the policy. In case of death during the policy tenure, the rider sum assured is paid in addition to the death benefit payable under the SBI pension plan.

How to buy SBI pension plans?

There are different ways to buy SBI pension plans. These ways are as follows –

  1. Through SBI Life’s branch office

    SBI Life has a wide network of branches in India. You can visit any of the nearest branches of the insurance company and apply for any of the three SBI pension plans. You should fill up a proposal form stating all your details and submit the form at the branch with the premium amount. Your application would be accepted and then the company would underwrite the policy. After the underwriting is done, the policy would be issued.

  2. Through an SBI Life Insurance agent

    SBI Life also has a vast network of insurance agents and brokers who sell the company’s insurance policies. You can, therefore, get in touch with the insurance agent of the company and buy any SBI pension plan. A proposal form would have to be filled and submitted along with the premium to apply for the policy.

  3. Online

    SBI Life insurance sells its policies online too. SBI Life- Annuity Plus Plan is available online and you can buy the plan directly from the company’s official website. To buy, visit https://www.sbilife.co.in/en/individual-life-insurance/online-plans and choose SBI Life – Annuity Plus. Fill up the online proposal form and pay the premium. Once the form is filled and submitted and the premiums are paid, the policy would be issued by SBI Life at the earliest.

    You can also choose to buy SBI pension plans online through Turtlemint. Turtlemint is partnered up with SBI Life and offers its policies online. You can simply visit https://www.turtlemint.com/life-insurance, choose ‘Pension / Retirement’ and proceed to provide your details. Based on your details, the premium and the annuity rates would be shown. Pay the premium online and you would be able to buy SBI Pension plan online easily within the shortest possible time.

Documents required for buying SBI pension plans

To buy any SBI pension plan, the following documents should be submitted –

  • Proposal form
  • Age proof
  • Identity proof
  • Address proof
  • Photographs

Making a claim under SBI Pension Plans

In case of a maturity claim, you would have to fill up a claim discharge voucher and submit it to SBI Life to choose the vesting benefit that you want to opt for. If you want to buy an immediate annuity plan, you need to fill up a proposal form for converting the policy. To commute, you should inform the company of your intention. To defer the vesting date, the company should be informed in writing. You should also state the age up to which you want to defer the vesting date.

For a death claim, a death claim form should be filled and submitted by the nominee. The death certificate should also be attached to the form. Based on the documents submitted, SBI Life would pay the death benefit to the nominee.

Documents required for claims

In case of death claims, the following documents should be submitted –

  • Claim form
  • Policy bond
  • Death certificate
  • Police FIR if death occurred in an accident
  • Identity proof of the nominee
  • Bank account details of the nominee for crediting the benefit directly to the nominee’s bank account

Review of SBI pension plans

SBI Life offers different types of pension plans, both deferred and immediate so that you can choose a policy as per your needs. Deferred pension plans are available in traditional as well as ULIP variant so that you can choose the policy depending on your risk profile. Under immediate annuity plans, there are different types of annuity options which help you choose the most suitable form of income that you need after you retire. So, if you are looking to plan for your retirement, SBI pension plans are a good solution.


FAQ’s

Yes, a grace period is allowed for payment of outstanding premiums under deferred SBI pension plans. The allowed period is 30 days if premiums are paid in annual, half-yearly or quarterly modes. However, if premiums are paid in monthly mode, the grace period would be 15 days.


Yes, the annuity payable under SBI Pension plans is guaranteed for your lifetime. The rate of the annuity would depend on the value of the accumulated corpus or the investment that you make, age at which you start receiving annuities and the annuity payout option that you have selected.


The death benefit under SBI Life – Retire Smart plan is the fund value along with the guaranteed additions (if any).


Yes, pension plans also allow tax benefits. The premiums paid for the plan are allowed as a deduction under Section 80 CCC up to INR 1.5 lakhs. The death benefit received would be completely tax-free in the hands of the nominee. In case of deferred annuity plans, the commuted pension, i.e. the amount which you withdraw on maturity, is allowed as a tax-free income under Section 10 (10A) of the Income Tax Act, 1961. However, the annuity payments received are considered to be an income. Such payments are taxable in your hands at your income tax slab rate.

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