ICICI Pru Guaranteed Pension Plan-Features, Options and Review

ICICI Pru Launches Guaranteed Pension Plan for Life Long

ICICI Pru Guaranteed Pension Plan-Features, Options and ReviewICICI Pru Launches Guaranteed Pension Plan for Life Long

Few days back, ICICI Prudential has launched Guaranteed Pension Plan. These days, life insurance companies are coming up with Guaranteed Income plans to attract investors. Recently Exide Life Insurance and Aditya Birla Sun Life has come up with life insurance savings schemes indicating guaranteed income up to 30 years. Now ICICI Pru Guaranteed Pension Plan says guaranteed pension income for life. One should go through the features, benefits, negative factors before considering any such plans. What is ICICI Pru Guaranteed Pension Plan all about? What are the features, benefits and hidden factors in Guaranteed Pension Plan from ICICI Prudential? Let me review this pension plan in this article.

Also Read: Exide Life Launches Guaranteed Wealth Plus – 30 Years Regular Income

Key Benefits in ICICI Pru Guaranteed Pension Plan

Here are the key benefits in this pension plan.

1) This plan offers guaranteed lifelong annuity income. One can purchase one time and get lifelong regular income by way of annuity.

2) This plan offers guaranteed income either monthly, quarterly, half yearly or yearly.

3) This pension plan comes with 11 annuity options. Investors can opt based on their need.

4) One can opt for return of purchase price in case of death, critical illness or permanent disability due to accident.

5) Investors can do top up option from high purchase price and get higher annuity income.

6) This plan offers immediate annuity income or deferred annuity income after 1 to 10 year period.

7) Plan can be taken for single life or joint life.

8) Investors can opt for early return of purchase price from age 76 or at age 80.

What are various Annuity Options in ICICI Guaranteed Pension Plan?

This plan offers two options.

1) Immediate Annuity Options:

Under this plan, one can opt for immediate pension income. It comes with furthermore options.

Single life with return of purchase price

Joint life with return of purchase price

Single life with return of purchase price from age 76

Single life with 50% return of purchase price from age 80

Single life with return of purchase price from age 80

Single life with return of purchase price on critical illness, permanent disability or death

Single life without return of purchase price

Joint life without return of purchase price

Generally, pension plans without return of purchase price (ROP) comes with higher income.

2) Deferred Annuity Options

Under this option, one can opt for deferred pension income i.e., pension income between 1 to 10 years. It comes with further following options.

Deferred single life with return of purchase price

Deferred joint life with return of purchase price

Deferred single life with return of purchase price on critical illness, permanent disability or death

Eligibility to invest in ICICI Prudential Guaranteed Pension Plan

ICICI Pru Guaranteed Pension Plan - Eligibility criteria

Why to purchase ICICI Pru Guaranteed Pension Plan?

Here are the pros of investing in such guaranteed pension plans.

1) One would get guaranteed pension income for life long as per the annuity option chosen.

2) Investors can opt for top up and pay additional price and get higher annuity (at prevailing rates) at any time.

3) 1% higher annuity income in case the pension plan purchased through online or by existing ICICI Prudential customer or if one purchases this from the proceeds of NPS Benefits. The maximum benefit would be 1% from this bucket.

5) Investors who have opted for deferred annuity can avail loans on such guaranteed pension plans. Such loan would be up to 80% of the surrender value.

6) Amount invested under this pension plan is eligible for income tax benefit us 80c up to Rs 1.5 Lakhs in financial year.

Negative or hidden factors in ICICI Pru Guaranteed Pension Plan

Here are the major negative or hidden factors.

1) These guaranteed plans would provide low returns of 4% to 5.5%. It is difficult to compute the returns for such pension plans as the pension income is paid for life long. This could be 10 years or 20 years or 30 years or 40 years.

2) The pension income is taxable as per the income tax slab applicable to the individual. If you are in 20% or 30% tax slab, you may need to pay higher tax.

3) Returns from pension plans in general do not beat inflation. Value of pension income keep going down with increase in inflation. E.g., the value of Rs 50,000 per month today would be lower after 10 year or 20 years or 30 years.

Also Read: LIC Bachat Plus offers 6.5% tax free returns – Should you opt?

Should you opt for ICICI Pru Launches Guaranteed Pension Plan?

There is nothing new in this plan. There are plenty of pension plans already available in the market. It indicates “guaranteed pension” plan, but in reality, any pension plan offers a fixed amount which is anyways guaranteed. Different annuity options in this plan provide choice to investors. If you are looking for immediate annuity, you can check the annuity rates among various insurance companies and take a call. If you do not need immediate annuity but looking for regular income of, say after 10 years, then you can go for equity investments that provides high returns. Investing in diversified portfolio of mutual funds can help you achieve 12% annualized returns though not guaranteed.

Have you liked our tips and analysis? Then share it on your Facebook, Twitter, Telegram and other social media which might be useful to your friends too.

Suresh KP

9 thoughts on “ICICI Pru Launches Guaranteed Pension Plan for Life Long”

  1. Thanks much for your reply and guidance. Then these kind of annuity, though too low is best for retirement bucketing which is assured life long and no interest rate reduction risk

  2. I have a question sir. Any other insurance other than LIC will give sovereign guarantee. Because annuity though the interest is low Capital protection and longevity is important. Will it be satisfied by these Private banks like LIC? For example our FD is guaranteed only for 5 lakh. Similarly how much our annuity fund is guarantee incase of bankruptcy of banks

    1. Hello Sivaraman, All insurance companies are regulated by IRDA, hence question about insurance companies going bankrupt would be out of question. Also banks would not provide insurance, it would be only insurance companies that would issue insurance policies. There is only one risk is acceptance of claim by insurance companies. If they don’t accept the claim, the nominee would not get sum assured. Beyond that there is no other risk.

      1. Sir, for that matter, all banks (now including cooperative banks also) are regulated by RBI and we have been seeing all sorts of scams happening in all the banks. So the ‘regulation’ oversight has always been a question mark in India.

  3. Better way to get life long pension is bucket strategy…. or build portfolio of MF and do SWP @ 6%.. Life long income and core value will increase

  4. I have always wondered how one can survive the old days of life at a taxable return of 4.5 to 5.5%.

Leave a Reply

Your email address will not be published. Required fields are marked *