ICICI Prudential Pension Plans

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank Ltd. and Prudential Private Limited Company. Prudential Private Limited Company is a leading international financial service group having its headquarters in the United Kingdom. ICICI Prudential Life is one of the first private sector life insurance companies who after receiving approval from the Insurance Regulatory Development Authority of India (IRDAI) have begun its operation in December 2000. Amongst the entire private life insurers in the country, ICICI has enjoyed a dominant position for more than twenty years by offering world-class products and quality consistent services.The range of products offered by ICICI Prudential Life Insurance Company include Protection plans in the form of term plans, Child Plans, Savings and Investment Plans which are available in both conventional or ULIPs form and pension plans. With a wide range of products, the company strives to meet every individual’s insurance related requirement at a single source.

What are ICICI Prudential Pension Plans?

Pension Plans or annuity plans are plans which are designed to take care of the income flow for the individual after retirement. Post retirement when the income of the individual dries up, the lifestyle expenses continue and there must be a provision to meet such expenses. Retirement plans help in providing a regular cash flow to individuals so that they can enjoy their retirement peacefully.

Pension Plans have some unique features which are listed below:

• There is a concept of vesting which is the date at which the plan terminates or matures
• Pension plans can be taken as Immediate Annuity Plans or Deferred Annuity Plans. Under Immediate Annuity Plans, a lump sum is paid by the policyholder and the annuity payments start immediately from the next period chosen. Under deferred annuity, premiums are first paid by the policyholder which accumulate into a corpus and thereafter annuity payments start from the vesting date
• There is no life cover. Annuity payments stop when the annuitant (or his spouse in case of joint life annuity) dies. However, under deferred annuity, death benefit is applicable if the annuitant dies in the deferment period
• On vesting, either the entire corpus can be used to avail annuity or 1/3^rd of it can be withdrawn in cash and the rest 2/3^rd can be used to avail annuity. The withdrawn part is called commuted pension. .

Why ICICI Prudential Pension Plans

Being dependent on others, especially financially is a curse. It is always better to provide for one’s finances even when there is no income. Retirement is a period where the expenses remain the same or maybe increase but income either decreases or diminishes completely. Having an insurance plan is prudent in such a scenario as the plan will provide an individual with the necessary finance required in the old age. Pension plans offered by life insurance companies provide a regular stream of income and come in many variants. They can be taken to cover the life of the policyholder’s spouse as well under the joint annuity plans. So, buying a pension plan is a prudent step towards an individual’s retirement planning.

ICICI Prudential Pension Plans

ICICI Prudential Life offers two types of Pension Plans to its customers to meet their retirement needs effectively. Let us take a look at the different types of pension plans offered by ICICI Prudential Life Insurance Company.

ICICI Pru Easy Retirement Plan –A Unit Linked Pension Plan which offers the following features:

• On Vesting, the policyholder will get higher of the fund value as on that day or the Assure Vesting Benefit which is equal to 101% of the total premiums paid till date.
• The Vesting Age can be extended provided the policyholder is below 55 years of age
• There are different types of annuity options available to the policyholder on vesting which are:
• Life annuity
• Life annuity with Return of Purchase Price
• Life annuity guaranteed for 5/10/15 years and for life thereafter
• Joint life or Last Survivor without Return of Purchase Price
• Joint life or Last Survivor with Return of Purchase Price
• The policyholder has different choices of dealing with the vesting corpus. He can avail immediate annuity payouts from the entire corpus or commute 1/3^rd of the corpus in cash which will be tax-free and avail annuity payouts from the remaining 2/3^rd of the corpus. He can alternatively also purchase a Single Premium Deferred Annuity from the company with the maturity proceeds.
• On death of the policyholder, an amount which will be higher of the fund value as on the date of death or the Guaranteed Death Benefit is payable to the nominee. The Guaranteed Death Benefit is expressed as 105% of all premiums paid, including any top-up premiums till the date of death. The nominee can withdraw the entire amount from the company or may choose to receive annuity payouts from the death benefit.
• Top-up premiums can be paid under the plan to increase the fund value provided it is at least Rs.2000 and above
• 4 free switches are allowed every year to switch between funds
• Premium redirection is also allowed to redirect future premiums to a different fund than that chosen at the plan inception
• Two types of funds are available for investment which are Easy Retirement Balance d Fund and Easy Retirement Secure Fund
• The plan provides the addition of Pension Boosters which are added after the completion of 10 policy years and thereafter every 5 years @ 5% of the average daily total Fund Value over the last 12 months provided at least 5 years’ full premium has been paid
• The Premium payment term can be increased or decreased relevant with the terms and conditions under the plan.
• Income tax benefit on the premium paid as per Section 80CCC and on the commuted part as per 

Eligibility Details

Illustrative Specimen

The following table shows the benefit illustration of the plan where a premium of Rs.50, 000 is paid for a term of 20 years and a premium payment term of 5 years for an individual aged 40 years. The table shows the returns on the premium paid.

ICICI Pru Immediate Annuity Plan – as the name suggest, it is an immediate annuity plan with the following features:

• Under the plan, the annuity payments will start immediately from the next chosen frequency (monthly, quarterly, half-yearly or annually) after the payment of the single premium
• The plan can be bought by groups to fund their superannuation needs and individuals for their retirement needs
• The plan provides 5 annuity payout options to choose from which are:
  • Life Annuity
  • Life Annuity with Return of Premium
  • Life Annuity guaranteed for 5/10 or 15 years and thereafter payable for life
  • Joint Life Last Survivor
  • Joint Life Last Survivor with Return of Purchase Price
• The policyholder can increase the annuity amount any time he or she wants by paying additional premium to purchase an additional annuity
• The company provides a premium discount based on the annuity amount and the mode of annuity payout chosen.
• Income tax benefit on the premium paid as per Section 80CCC and on the commuted part as per Section 10(10A) of the Income Tax Act. 

Eligibility Details

Sample Purchase Price Rates

The following table shows the applicable Purchase Price payable under two different options if the policyholder wishes to avail an annuity payout of Rs.12, 000 every year.

ICICI Prudential Pension Plans FAQS