Annuity: Buy Best Annuity Plans of 2023

What is an Annuity Plan?

An Annuity Plan is an insurance contract between an individual (the annuitant) and an insurance company that provides them with a regular stream of 100% guaranteed pension for lifetime after their retirement. This helps an individual to secure their life goals and create a financial net for their family.

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

• Regular premium payments

• Lump sum payment

In return, the insurance company offers an annuity plan as best investment option that guarantees to provide you a fixed stream of income at high annuity rates for the entire life of the annuitant

The company further invests the premiums in different assets and pays back the generated returns to you. 

Features of the Best Annuity Plans in India

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

Best Annuity Plans 2023-24

Below is the list of different categories of best annuity plans to invest in 2023-24:

1. Regular Pay Annuity Plans

These are the annuity plans where you make regular premium payments over a period of time in exchange for a guaranteed income stream at decided intervals.

• If You Invest in an Annuity Plan at the age of 50 years

• You Invest: Rs. 2.4 lakhs p.a.

• Premium Payment Term: 10 years

• Annuity Starts After: 10 years (from age of 61 years)

• Annuity Plan Type: Pension For Lifetime + ROP

2. Single Pay Immediate Annuity Plans

In these annuity plans, you make a single lump-sum payment upfront, which immediately starts generating a regular income stream for a specified period.

• If You Invest in an Annuity Plan at the age of 60 years

• You Invest: Rs. 10 lakhs p.a.

• Premium Payment Term: One-Time

• Annuity Starts After: Immediately from Next Month

• Annuity Plan Type: Pension For Lifetime + ROP

3. Single Pay Deferred Annuity Plans

In single pay deferred annuity plans, you make a single lump-sum payment upfront, which accumulates and grows over a specified period until it is converted into a regular income stream.

• If You Invest in an Annuity Plan at the age of 60 years

• You Invest: Rs. 10 lakhs p.a.

• Premium Payment Term: One-Time

• Annuity Starts After: 5 years

• Annuity Plan Type: Pension For Lifetime + ROP

Details of Best Annuity Plans in India in 2023 (Regular Pay)

1. ICICI Pru Guaranteed Pension Plan Flexi

   ICICI Pru Guaranteed Pension Plans Flexi is a non-linked, non-participating individual deferred annuity plan that provides you with an assured income and best annuity rates to ensure peace of your mind during your golden years. ICICI Pru is the only insurer to provide you with the Waiver of Premium Option in Annuity Plans.

   Features of ICICI Pru Guaranteed Pension Plan Flexi:

   • This annuity plan offers you the Return of Purchase Price (ROP) option along with the lifetime guaranteed annuity benefit.

   • You can avail of the Waiver of Premium (WOP) feature with this annuity plan. This ensures that the joint life annuitant does not bear the financial burden of paying premium in case of demise of primary annuitant. The joint life annuitant however gets the complete benefit of the plan, without paying premiums.

   • This annuity plan provides you with the following Annuity options:

     • Single Life Annuity

     • Joint Life Annuity

   • You get the flexibility to choose the premium payment term and vesting age as per your financial needs.

   • Annuity payouts are available on a monthly, quarterly, semi-annually, and annual basis as per your preference.

   • ICICI Pru holds the status of the only insurer that provides an additional rider of Waiver of Premium (WOP). In case the primary annuitant dies during the premium payment term, all future premiums are waived off and the secondary annuitant will continue to receive the regular income after the deferment period till death.

   • The "Save the Date" option helps you choose the date on which you wish to receive your annuity.

   • You can use the "Top-up" option of this annuity plan to park your additional funds and get more annuity benefits on retirement.

   • Tax benefits are available under Section 80C and Section 10 (10D) of the IT Act, 1961.

   • When you surrender the ICICI Pru Guaranteed Pension Plan Flexi, you will not have to pay any capital gains tax.

2. Max Life Guaranteed Lifetime Income Plan

   Max Life Guaranteed Lifetime Income Plan is a non-linked, non-participating individual general annuity savings plan that provides you with higher assured income and best annuity rates on your retirement. Max Life is the single insurer that provides annuity plan from the age of 30 years.

   Features of Max Life Guaranteed Lifetime Income Plan:

   • This annuity plan provides you with deferred annuity along with death benefits.

   • Only insurer in the industry that provides you an annuity from 30 years of age.

   • The plan offers you guaranteed assured income at high annuity rates throughout your lifetime.

   • Annuity options available with this annuity plan:

     • Single Life Annuity

     • Joint Life Annuity

   • You get the flexibility to choose from various income payout options under this annuity plan.

   • In your absence, your nominee is provided with the benefit of 105% of the Purchase Price.

   • You can avail of deductions of up to Rs. 1.5 lakhs from this annuity plan u/Section 80C of the IT Act, 1961.

   • If you are above 60 years of age, you can claim additional deductions of up to Rs. 75,000 from this annuity plan u/ Sec 80D of the IT Act, 1961.

   • Tax benefits on income earned are available u/ Section 10 (10D) of the IT Act.

3. Bajaj Allianz Guaranteed Pension Goal

   Bajaj Allianz Guaranteed Pension Goal Plan is a non-participating, non-linked, deferred annuity plan that aims to help you achieve your lifestyle goals during your post-retirement period.

   Features of Bajaj Allianz Guaranteed Pension Goal:

   • This annuity plan offers guaranteed income throughout your lifetime.

   • Annuity Payout Modes available with this annuity plan:

     • Monthly

     • Quarterly

     • Semi-Annually

     • Annually

   • You can select from a wide range of annuity options as per your financial needs.

   • In case of your unfortunate demise, this annuity plan provides the facility to give annuity payouts to your spouse of up to 50% or 100% as per your choice under the Joint Life Annuity option.

   • The return of Purchase Price option (ROP) option is also available in your absence or as a survival benefit.

   • Deduction of up to Rs. 1.5 lakhs on the premium paid for this annuity plan u/ Section 80C of the Income Tax Act, 1961.

   • The income received from this best annuity plan in India is tax-free u/ Section 10(10D), irrespective of the mode of payment (monthly, quarterly, half-yearly, or yearly).

4. HDFC Life Systematic Retirement Plan

   This is an individual/ group, non-participating, non-linked savings deferred annuity plan that provides you with a regular income and higher annuity rates along with financial independence during your post-retirement period.

   Features of HDFC Life Systematic Retirement Plan:

   • You can select your annuity deferment period as per your financial needs.

   • Annuity payout modes available with this annuity plan:

     • Monthly

     • Quarterly

     • Semi-Annually

     • Annually

   • You get a guaranteed fixed income and best annuity rates for a lifetime upon payment of premiums for a limited period.

   • Your nominee gets the Return of the Total Purchase Price in case of your unfortunate demise.

   • Tax Benefits with this annuity plan:

     • Up to Rs. 1.5 lakhs of the premium paid for the plan can be deducted from your taxable income under Section 80C of the Income Tax Act, 1961.

     • Tax benefits are provided on the income earned u/Section 10(10D) of the IT Act, 1961.

     • If you are above the age of 60, an additional deduction of up to ₹75,000 can be claimed under Section 80D for the premium paid.

5. IndiaFirst Life Guaranteed Annuity Plan

   IndiaFirst Life Guaranteed Annuity Plan is a non-linked, non-participating, individual annuity plan that provides you with assured regular income along with best annuity rates throughout your lifetime.

   Features of IndiaFirst Life Guaranteed Annuity Plan:

   • This annuity plan provides you with guaranteed income at high annuity rates for a lifetime

   • You can choose from 12 annuity options as per your financial planning

   • Annuity payout modes:

     • Monthly

     • Quarterly

     • Half-yearly

     • Yearly

   • The return of Purchase Price option is available with the annuity plan to provide protection against critical illnesses

   • You can choose the Annuity Certain option to get assured income and high annuity rates for the pre-determined period, even in case of your unfortunate demise

   • Joint Life or Family Income facility is also available with this annuity plan to provide regular income to your loved ones in your absence

   • Escalating Life Annuity option provides a constantly increasing annuity income

   • You can avail of the tax benefits with this annuity plan under the Section 80C and Section 10 (10D) of the IT Act, 1961

Details of Best Annuity Plans in India in 2023 (Single Pay)

1. HDFC Life New Immediate Annuity Plan

   The HDFC Life New Immediate Annuity Plan is a single premium annuity plan that provides you with a guaranteed income for life.

   Features of HDFC Life New Immediate Annuity:

   • Once you purchase this annuity plan, you will receive a guaranteed income for life at best annuity rates.

   • Depending on your preference, the following annuity modes are available:

     • Monthly

     • Quarterly

     • Semi-annually

     • Annually

   • This best annuity plan in India offers you flexible annuity options:

     • Single Life Annuity

     • Joint Life Annuity

   • The HDFC Life New Immediate Annuity Plan provides a number of tax benefits:

     • Premiums paid for this annuity plan are eligible for a deduction under Section 80C of the Income Tax Act, 1961.

     • The annuity income received under this best annuity plan in India is also eligible for a deduction under Section 10(10D) of the Income Tax Act, 1961.

   • Advantage of higher annuity rates with a high Purchase Price.

   The return of Purchase Price (ROP) option is available with this annuity plan on detection of death and critical illness.

2. TATA AIA Saral Pension Plan

   The Tata AIA Saral Pension Plan is a retirement plan that offers guaranteed lifetime income at best fixed annuity rates.

   Features of TATA AIA Saral Pension Plan:

   • This annuity plan is available in two options:

     • Single Life Annuity

     • Joint Life Annuity

   • There are no medicals required to purchase this best annuity plan in India.

   • The amount of income you receive will depend on your age, purchase amount, and the annuity option you choose.

   • Tax deductions on total premiums paid for this annuity plan u/ Section 80C of the IT Act, 1961.

   • Tax benefits on the income received from best annuity rates u/ Section 10(10D) of the IT Act, 1961.

   • You can choose to receive your annuity payments monthly, quarterly, semi-annually, or annually.

   • In the unfortunate event of your demise during the policy term, the nominee will receive the higher of the sum assured or the fund value under this annuity plan.

3. Bajaj Allianz Immediate Annuity Plan

   The Bajaj Allianz Immediate Annuity Plan is a non-linked, non-participating, individual immediate annuity plan that provides regular income for life with best annuity rates.

   Features of Bajaj Allianz Immediate Annuity:

   • This annuity plan provides a guaranteed income for life with best fixed annuity rates, regardless of how long you live.

   • You can choose from a variety of annuity options under this plan, including:

   • Single life annuity

   • Joint life annuity

   • Period certain annuity

   • This is the best annuity plan that offers tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961.

   • Annuity modes available with this plan:

     • Yearly

     • Half-yearly

     • Quarterly

     • Monthly

   • This annuity plans provides you with option to receive your invested amount back as Return of Purchase Price (ROP) on death or as Survival benefit.

4. ICICI Pru Guaranteed Pension Plan

   ICICI Pru Guaranteed Pension Plan is a retirement-oriented insurance product. It is designed to provide you with a regular income with high annuity rates during your retirement years.

   Features of ICICI Pru Guaranteed Pension Plan:

   • This annuity plan offers a guaranteed annuity for lifelong to ensure financial stability during your retirement.

   • Under this annuity plan, you can receive the income on a monthly, quarterly, half-yearly, or yearly basis, depending on your preference.

   • Availability of 11 annuity options designed to suit your financial requirements

   • You can choose from a variety of annuity options to meet your specific needs:

     • Single life annuity

     • Joint life annuity

   • Tax benefits offered by ICICI Pru Guaranteed Pension Plan: 

     • Tax deduction benefits on premium payment u /Sec 80C of the IT Act, 1961.

     • Tax benefits on income received u/ Sec 10 (10D) of the IT Act, 1961.

   • The return of Purchase Price (ROP) option is available in the occurrence of unfortunate death, critical illness, or accidental permanent disability.

   • You can increase your annuity income through a top-up option.

   • On your unfortunate demise, your nominee will receive a death benefit depending on the purchase amount and the annuity option you choose.

5. Kotak Life Immediate Annuity Plan

   Kotak Life Immediate Annuity Plan is a non-linked, non-participating immediate annuity plan that provides you with a regular stream of income for life along with high annuity rates.

   Features of Kotak Life Immediate Annuity Plan:

   • This best annuity plan in India offers you 6 annuity options to choose from this annuity plan, as per your financial needs.

   • You can get higher annuity rates for higher premium payment.

   • Once decided, the annuity rates remain stable during your lifetime.

   • This annuity plan provides you with the option of Single Life Annuity and Joint Life Annuity.

   • Availability of 6 annuity options with this annuity plan:

     • Lifetime Income

     • Lifetime Income with Cash-back

     • Lifetime Income with Term Guarantee

     • Last survivor Lifetime Income with 100% annuity to Surviving Spouse

     • Last survivor Lifetime Income with 50% annuity to Surviving Spouse

     • Last survivor Lifetime Income with 100% annuity to the Surviving Spouse and Cash-back on the death of Surviving Spouse

   • You can get higher annuity rates on payment of the higher premium amount.

   • Tax benefits are available u/ Section 80C of the IT Act, 1961.

Types of Annuity Plans

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

Eligibility Criteria to Buy Best Annuity Plans in India

Some of the standard eligibility criteria that individuals are usually required to meet are as follows:

• Age Requirement: 30 years – Lifetime

• Citizenship: Indian Resident Citizens/ NRIs/ PIOs

• Health Conditions: Insurance companies may require individuals to undergo a medical underwriting

Documents Required to Buy Annuity Plans in India

Here are some essential documents required to buy annuity plans in India:

Working of Annuity Plans in India

Here are the stepwise working of annuity plans in India:

1. 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.

2. 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.

3. Step 3: Vesting Age

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

4. 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.

5. 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 you selected.

6. Step 6: Additional Features

   Some annuity plans offer additional features, such as a joint-life annuity or return of purchase price. Joint-life annuity ensures that the income continues to the spouse or nominee after the annuitant's death, while the return on purchase price guarantees that the remaining amount is given to the nominee or legal heirs if the annuitant passes away before using the total investment.

Advantages of Best Annuity Plans in India

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

1. No Cap of Investment

   When it comes to the best annuities plans, there are no investment limits like the one we have in the case of the Senior Citizens Savings Scheme and Post Office Monthly Income Scheme.

2. Sense of Financial Security

   Annuity plans offer financial security by providing a guaranteed income stream along with best 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 provides you with a guaranteed income for life along with high annuity rates. This can be a great way to ensure that you have a steady stream of income to live on during retirement.

4. Tax benefits 

   Annuities can offer a number of tax benefits, including tax-deferred growth and tax-free withdrawals. This can help you save money on your taxes and increase your retirement savings.

5. Flexibility 

   There are many different types of annuity plans 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 you can choose an annuity that pays out a variable amount of money based on the performance of the underlying investments.

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.