TATA AIA Life Smart Annuity Plan

To ensure a financially secured life after retirement it is very important to do strong retirement planning. The early one starts planning for retirement, the more corpus they can accumulate for the future. By investing in an annuity plan, one can ensure to have a regular flow of income after retirement. 

TATA AIA Life Smart Annuity Plan is a non-participating, single premium non-linked individual annuity plan, which provides guaranteed regular income after retirement. Let’s read further to know in detail about the different aspects of the policy. 

Features of TATA AIA Life Smart Annuity Plan 

Here are some of the salient features of the policy. 

  • The plan offers different annuity options to choose from. 
  • The policy buyer can choose the option for a single or joint-life annuity. 
  • The plan offers the flexibility to choose from different annuity payouts mode. 
  • The policyholder can choose a top-up option to enhance the annuity payout. 

How Does the Plan Work?

  • The policy buyer need to plan the annuity needs i.e. 
  • Choose the purchase price to buy an annuity; or 
  • Choose the amount of annuity to be received. 
  • Secondly, the insured will need to choose the plan option and annuity mode i.e. monthly, quarterly, half-yearly or yearly mode. 
  • The annuitant will receive the annuity as per the chosen mode. 

Eligibility Criteria:

Let’s take a look at the eligibility criteria of the policy.

 

Parameters

Minimum

Maximum

Entry Age

Immediate Life Annuity

Immediate Life Annuity with Return of Purchase Price

Deferred Life Annuity with Return of Purchase Price

 

45 years

85 years

Annuity Purchase Price

Immediate life Annuity

Immediate Life Annuity with Return of Purchase Price

Deferred Life Annuity with Return of Purchase Price

 

87, 527/-

 

2,06,155/-

 

 

 

1,08,303/-

No limit, subject to board approved  underwriting policy

Annuity Payouts

Annually

Half-yearly

Quarterly

Monthly

12,000

6,000

3,000

1,000

No upper limit

Premium payment period

Single premium

Annuity Options Available Under Smart Annuity Plan 

The annuity options available under the policy are:

Immediate Life Annuity 

Under this option, the annuity is paid immediately to the annuitant after payment of the lump-sum amount. Under an immediate life annuity option, the policyholder can choose the option of a single-life or joint-life option. 

  • Single Life- The annuity will be payable in arrears as per the chosen payment mode to the annuitant till he/she is alive. In case of demise of the annuitant the payment is ceased and no further benefits are paid. 
  • Joint Life Annuity- Under this option the annuity is payable in arrears as per the mode of payment chosen by the annuitant. The annuity is paid until either the primary or secondary annuitant is alive. In case of demise of both the annuitants, the annuity payment will be ceased and no benefits will be payable further. 

Immediate Life Annuity with Return of Purchase Price 

Under this option, the policyholder can choose the single-life or joint-life variant. 

  • Single Life- The annuity is paid as guaranteed income as per the chosen mode payment until the annuitant is alive. In case of demise of the annuitant, a lump-sum amount as the death benefit is paid to the beneficiary of the policy and thereafter the policy is terminated.
  • Joint Life- The annuity is paid as guaranteed income as per the chosen mode pf payment until either of the primary and secondary annuitants is alive. In case of death of both the annuitant a lump-sum amount as the death benefit is paid to the nominee and thereafter the policy is terminated. 

Deferred Annuity With Return of Purchase Price 

The deferment period ranges between 1-10 year as chosen by the policyholder at the time of policy initiation. The annuity rate applicable will be the same as guaranteed at the inception of the policy. 

  • Single Life- The annuity will be paid in arrears post deferment period as per the chosen mode of payment until the annuitant is alive. In case of demise of the annuitant, death benefit as the lump-sum amount is paid to the beneficiary of the policy and no further amount is payable thereafter.
  • Joint Life- The annuity will be paid in arrears post deferment period as per the chosen mode of payment for as long as both the primary and secondary annuitant is alive. In case of demise of both the annuitant, death benefit as the lump-sum amount is paid to the beneficiary of the policy and no further amount is payable thereafter. 

Benefits of TATA AIA Life Smart Annuity Plan 

Death Benefit 

The death benefit varies as per the annuity option chosen by the policyholder. The below table shows the death benefit for different annuity options. 

S. No

Annuity Option

Death Benefits

1

Immediate Life Annuity Option

None

2

Immediate Life Annuity With Return of Purchase Price Option

100% of purchase Price of the Annuity

3

Deferred Life Annuity With Return of Purchase Price option

Higher of

Purchase Price +Guaranteed Additions (GA)- Total Annuity Payouts till date of death;or

110%of purchase price (including top-up amount, if any )

Where, GA=Purchase price X Annuity Rate/12

Guaranteed Additions are accrued at the end of every policy month during the deferment period. GA stops accruing at the end of the deferment period.

Under the option of deferred life annuity with return of purchase price, the beneficiary will have to select one the following options for the death benefit payment.

  • Lump-sum Death Benefit- the entire death benefit is payable as lump-sum to the beneficiary.
  • Annuitization of Death Benefit- under this option, the death benefit payable can be used for purchasing an immediate annuity from the company. The annuity payable to the beneficiary while filing the death claim is based on the age of the beneficiary and immediate annuity rates prevailing as on the date of death of the annuitant. This option can be opted for part or full benefit amount payable on death.
  • Surrender Benefit- to avail the maximum benefit of the policy, it is always advisable to continue the policy till the end. However, if one wants to surrender the policy then surrender benefit offered under the policy are as following:
  • Immediate Life Annuity Option

Under this option there is no surrender benefit available under single or joint life option.

  • Immediate or Deferred Annuity with Return of Purchase Price (single or joint life option)

Under this option, the surrender value payable will be higher of the Guaranteed Surrender Value (GSV)  or Special Surrender Value (SSV).

Written By: PolicyBazaar - Updated: 28 March 2021
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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