HDFC Life New Immediate Annuity Plan Rate of Interest

Financial independence shouldn’t stop even after someone retires. These days, more and more millennials are finance-aware, so investment in long-term retirement funds is rising. This has also been fueled by the recent traction towards various retirement schemes in the market.

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  • Multiple Annuity Options

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Investors can buy an annuity from the maturity benefits or the surrender proceeds of a Policy, even for new pension schemes and other Insurance pension schemes. They can withdraw a fair amount as a lump sum and tax-free from both NPS (40%) and Insurance Pension Plans (1/3rd of the sum insured). However, the investor must purchase an annuity for the remaining amount of money. This can be done by any insurer.

What is HDFC Life New Immediate Annuity Plan?

HDFC Life New Immediate Annuity Plan is one such immediate annuity product that aims to ensure that the investor receives a monthly assured amount of pension income, reducing financial dependency.

HDFC Life New Immediate Annuity Plan is a single-premium, non-participating, non-linked, traditional annuity plan that offers an investor various annuity options, ensuring a guaranteed pension income stream for investors depending upon the options chosen.

HDFC Life New Immediate Annuity Plan Features Include:

  • Wide eligibility to invest between 30-85 years.
  • Yearly Annuity Payout starts from Rs. 10,000 and has no upper limit.
  • Half-Yearly Annuity Payout starts from Rs. 5,000 and has no upper limit.
  • Quarterly Annuity Payout starts from Rs. 3,000 and has no upper limit.
  • Monthly Annuity Payout starts from Rs. 1,000 and has no upper limit.
  • Choose between Single and Joint Life as an annuity option.
  • Option to receive an annuity as long as the investor or their partner is alive.
  • Various modes of annuity payment (Monthly/Quarterly/Half-Yearly/Yearly)
  • Different annuity rates based on options and modes of the annuity.
  • Changing annuity rates based on financial conditions. Obtain a higher annuity rate for the large purchase price.
  • Option to return purchase price in the event of death or critical illness.
  • Guaranteed source of income for life - once the investor purchases annuity, it is guaranteed for a lifetime.

Annuity Options

Currently, HDFC Life New Immediate Annuity Plan offers two annuity options: Single and Joint Life. The following options can be further chosen once one of these two primary modes has been selected.

Single Life Annuity Options

Joint Life Annuity Options

1.       Life Annuity

2.       Life Annuity with Return of Purchase Price

3.       Life Annuity with return of Balance Purchase Price

4.       Life Annuity with a Guarantee Period

5.       Life Annuity with 50% escalation

6.       Life Annuity with Return of Purchase Price in Parts

7.       Life Annuity with Return of Purchase Price on the diagnosis of Critical Illness

1. Joint Life Annuity with 100% annuity to the secondary annuitant

2. Joint Life Annuity with 50% annuity to the secondary annuitant

3. Joint life Annuity with 100% annuity to the secondary annuitant and return of Purchase Price

4. Joint life Annuity with 50% annuity to the secondary annuitant and return of Purchase Price

HDFC Life New Immediate Annuity Plan – Annuity Rates

HDFC Life New Immediate Annuity Plan interest rates vary with Investor Age, the options chosen, and the type of annuity selected. It also depends on purchase prices. HDFC has divided the price into a few bands as follows:

Band

Range

Band 1

Less than Rs. 2,50,000

Band 2

Rs. 2,50,000 - Rs. 4,99,999

Band 3

Rs. 5,00,000 - Rs. 9,99,999

Band 4

Rs. 10,00,000 - Rs. 49,99,999

Band 5

Rs. 50,00,000 and above

Annual conversion of payouts is listed below:

Frequency

Annuity Installment (per frequency)

Half-Yearly

98% of annual annuity x 1/2

Quarterly

97% of annual annuity x 1/4

Monthly

96% of annual annuity x 1/12

HDFC Life New Immediate Annuity Plan Rate of Interest

Age 50 Years

Annuity Options/ Bands

Band 1

Band 2

Band 3

Band 4

Band 5

Lifetime Annuity

7.54%

7.71%

7.81%

7.86%

7.90%

Lifetime Annuity with ROP

6.44%

6.62%

6.72%

6.77%

6.80%

Lifetime Annuity with ROP in parts

5.27%

5.45%

5.54%

5.58%

5.63%

Lifetime Annuity with ROP on CI or Death

6.42%

6.60%

6.70%

6.75%

6.78%

Joint Life with 100% ROP

6.26%

6.42%

6.54%

6.60%

6.64%

 

Age 55 Years

Annuity Options/ Bands

Band 1

Band 2

Band 3

Band 4

Band 5

Lifetime Annuity

8.12%

8.26%

8.34%

8.38%

8.41%

Lifetime Annuity with ROP

6.68%

6.82%

6.90%

6.94%

6.97%

Lifetime Annuity with ROP in parts

5.51%

5.65%

5.73%

5.77%

5.80%

Lifetime Annuity with ROP on CI or Death

6.66%

6.80%

6.88%

6.92%

6.95%

Joint Life with 100% ROP

6.35%

6.66%

6.75%

6.80%

6.84%

 

Age 60 Years

Annuity Options/ Bands

Band 1

Band 2

Band 3

Band 4

Band 5

Lifetime Annuity

8.74%

8.87%

8.93%

8.96%

8.99%

Lifetime Annuity with ROP

6.83%

6.95%

7.02%

7.05%

7.08%

Lifetime Annuity with ROP in parts

5.69%

5.81%

5.87%

5.91%

5.93%

Lifetime Annuity with ROP on CI or Death

6.81%

6.93%

7.00%

7.03%

7.06%

Joint Life with 100% ROP

6.73%

6.89%

6.91%

6.95%

6.98%

 

Age 65 Years

Annuity Options/ Bands

Band 1

Band 2

Band 3

Band 4

Band 5

Lifetime Annuity

9.58%

9.69%

9.74%

9.77%

9.80%

Lifetime Annuity with ROP

6.95%

7.05%

7.11%

7.14%

7.16%

Lifetime Annuity with ROP in parts

5.85%

5.96%

6.01%

6.04%

6.06%

Lifetime Annuity with ROP on CI or Death

6.90%

7.00%

7.06%

7.09%

7.11%

Joint Life with 100% ROP

6.89%

6.98%

7.04%

7.07%

7.10%

Here's an example. If you are 60 years old and buy an annuity worth Rs. 10 Lakhs (purchase price), you will start getting Rs with Lifetime Annuity as your chosen option. 89,600 per annum as fixed pension.

If you choose monthly income instead, you will be getting 96% of the sum assured (89,600) divided into 12 equal monthly instalments, i.e. Rs. 7,168 per month.

The payouts for HDFC Life New Immediate Annuity plan get higher with higher age and purchase prices, and also if the investor chooses Life Annuity as an option.

Conclusion

Immediate Annuity Plans are geared towards helping an investor receive a regular income post-retirement, though it may be your only option if the investment money is coming from another typical pension scheme or NPS. Since an annuity is taxable, it is often advised not to invest a significant amount of money in these schemes, leading to retirement incomes becoming 100% taxable.

Suppose one already has a good amount of money invested in regular Insurance Pension Plans or NPS. In that case, HDFC Life New Immediate Annuity Plan offers an excellent option to invest one's retirement corpus - although one should do one's research in other companies offering similar products. If one is not heavily invested in these retirement schemes, saving money in instruments that provide tax-free income is recommended.

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