Annuity Plans

What is an Annuity Plan?

An annuity plan is an insurance contract between you (the annuitant) and an insurance company to provide you with a regular stream of 100% guaranteed pension for a lifetime after retirement. This helps you to secure your life goals and create a financial net for your family.

As an annuitant, you can make payment in a suitable annuity plan in the following two ways:

• Regular premium payments

• Lump sum payment

In return, the insurance company offers an annuity plan as the investment option that guarantees a fixed stream of income at high annuity rates for your entire life. Annuity plans locks your pension rate today for your entire life, ensuring that rates do not drop with dropping repo rates.

Features of the Best Annuity Plans in India

Some of the significant features of the annuity plan in India are listed below:

Best Annuity Plans in India 2025

Below is the list of different categories of best annuity plans to invest in 2025:

1. IPRU Guaranteed Pension Plan (ICICI Pru Guaranteed Pension Plan)

   This plan is designed to provide retirees with a guaranteed, regular income for life, ensuring financial stability and peace of mind in the post-retirement years. It aims to help individuals maintain their lifestyle and meet their financial goals even after they stop earning a regular salary.

   Features:

   • Guaranteed lifelong income

   • Flexible payout options (monthly, quarterly, half-yearly, yearly)

   • Choice of immediate or deferred annuity

   • Single premium payment

   • Customizable to suit individual retirement needs

2. Bajaj GPG 2 (Bajaj Allianz Life Guaranteed Pension Goal II)

   Bajaj Allianz Life Guaranteed Pension Goal II is a non-linked, non-participating annuity plan crafted to secure your lifestyle goals by providing a steady, guaranteed income throughout your retirement. It offers both immediate and deferred annuity options, allowing you to start receiving your pension as per your convenience. The plan is designed to ensure that your financial needs and those of your family are met, even in your absence, with options for joint life coverage and return of purchase price.

   Features:

   • Guaranteed regular income for life, paid as per chosen frequency (monthly, quarterly, half-yearly, yearly)

   • Wide range of annuity options, including immediate and deferred annuity

   • Joint life annuity option with 50% or 100% annuity payable to spouse after death

   • Return of purchase price (ROP) options: receive 50% to 100% of the purchase price back on death

   • Flexible start date for annuity payments

   • Multiple premium payment options (single, regular, or limited)

   • Flexible premium payment frequencies (monthly, quarterly, half-yearly, yearly)

3. HDFC Smart Pension Plus

   HDFC Smart Pension Plus is a retirement solution aimed at providing a guaranteed annuity income for life. It is ideal for individuals or couples seeking predictable, lifelong income with the flexibility to choose when and how they receive their payouts. This pension plan is designed to offer peace of mind and financial independence during retirement.

   Features:

   • Guaranteed annuity income for life

   • Single or limited premium payment options

   • Immediate and deferred annuity choices

   • Single and joint life annuity options

   • Multiple payout frequencies (monthly, quarterly, half-yearly, yearly)

   • Customizable annuity options (life annuity, with return of premium, increasing annuity, etc.)

4. Tata AIA Fortune Guarantee Pension

   Tata AIA Fortune Guarantee Pension is a non-linked, non-participating annuity plan that promises guaranteed returns, providing retirees with a stable and predictable income stream. The plan offers flexibility in annuity options and payout modes, making it suitable for those seeking security and adaptability in their retirement planning.

   Features:

   • Guaranteed returns unaffected by market conditions

   • Immediate and deferred annuity options

   • Single or joint life coverage

   • Return of purchase price and death benefit options

   • Flexible payout frequencies (monthly, quarterly, half-yearly, yearly)

   • Top-up premium facility to enhance future pension

   • Potential tax benefits and loan facility

5. Max SWAG Pension (Max Life Smart Wealth Annuity Guaranteed Pension Plan)

   This plan is tailored for individuals looking for flexibility and customization in their retirement income. Max SWAG Pension offers various annuity options, including immediate payouts and death benefits, ensuring that retirees and their families are financially secure.

   Features:

   • Multiple annuity variants (immediate annuity for single or joint life, with/without death benefit)

   • Death benefit options: return of 25% to 100% of total premiums paid on death

   • Single premium payment

   • Customizable for individual or joint life needs

   • Flexible payout modes (annual, half-yearly, quarterly, monthly)

6. Max Smart Guaranteed Pension Plan

   Max Smart Guaranteed Pension Plan is designed for those seeking guaranteed lifelong income with added flexibility, such as advance annuity payouts and top-up options. It caters to both individuals and families, including NPS subscribers, and offers features to enhance and secure retirement income.

7. Features:

   • Guaranteed lifelong income

   • Advance annuity option: Receive the next 5 years’ annuities as a lump sum

   • Single or joint life annuity

   • Return of premium option on death

   • Top-up feature to increase annuity amount

   • Multiple payout frequencies (yearly, half-yearly, quarterly, monthly)

   • Available for group members and NPS subscribers

   • Family income option for NPS subscribers

Types of Annuity Plans in India

Various insurance companies offer a range of annuity plans in India, prominent of them are as follows:

Documents Required to Buy Annuity Plans in India

The essential documents required to buy annuity plans in India are listed in the table below:

Working of Annuity Plans in India

Learn the working of annuity plans in India from the steps mentioned below:

Step 1: Selection of Annuity Plan

The first step is to choose the type of annuity plan that suits your needs. Consider factors such as the desired payout frequency, whether you want an immediate or deferred annuity, and any additional features you require.

Step 2: Pay the Premium

Once you have chosen an annuity plan, you will need to pay a premium. The premium amount will depend on the type of annuity plan you choose, your age, and the amount of income you want to receive.

Step 3: Vesting Age

The vesting age is the age at which you want to start receiving income earned from the annuity rates under the annuity plan.

Step 4: Annuity Payout Options

Before reaching the vesting age, you will need to select the annuity payout options that determine the frequency and duration of your income payments. You can choose monthly, quarterly, half-yearly or annual payouts.

Step 5: Start receiving payments

Once you reach the vesting age, the insurance company starts providing you with regular income payments as per the annuity payout options for the chosen duration.

Step 6: Additional Features

Some annuity plans offer additional features, such as a joint-life annuity or return of purchase price or waiver of premium option. Joint-life annuity ensures that the income continues to the spouse or nominee after the annuitant's death, while the Return on Purchase Price (ROP) guarantees that the remaining amount is given to the nominee or legal heirs if the annuitant passes away before using the total investment. Waiver of premium ensures that the policy continues in case of the unfortunate demise of the primary annuitant.

Advantages of Annuity Plans in India

Let us have a look at the advantages offered under the annuity plans from the list mentioned below:

1. No Cap of Investment

   annuity plans do not have investment limits, unlike government schemes like the Senior Citizens Savings Scheme (SCSS) and Post Office Monthly Income Scheme (PO-MIS).

2. Sense of Financial Security

   Annuity plans offer financial security by providing a guaranteed income stream along with the annuity rates. The insurance company assumes the responsibility of managing the investment and longevity risk, ensuring that you receive the promised income for the specified period or throughout your lifetime.

3. Guaranteed Income

   An annuity plan in India provides you with a guaranteed income for life and high annuity rates. This can be a great way to ensure that you have a steady income to live on during retirement.

4. Tax Benefits

   Annuity Plans in India offer tax-deferred growth, which can help you save taxes and increase your retirement savings.

5. Flexibility

   Many types of annuity plans are available, so you can choose one that fits your individual needs and circumstances. For example, you can choose an annuity that pays out a fixed amount of money each month or an annuity that pays out a variable amount of money based on the performance of the underlying investments. This type of retirement planning is beneficial to secure a comfortable future.

6. Retirement Income

   Annuity plans provide a reliable and regular income during your retirement years. This ensures that you have a steady source of income to support your lifestyle and meet your financial obligations after you stop earning.