This plan guarantees you lifelong pension and are tax deferred, and that is where their attraction lies. Not only can you plan a pension for life with the help of these annuities but these schemes also help you reduce your tax liability. 

In a nutshell, this annuity plan is a vehicle for planning a life long pension and offer. The following are some of the important features of this plan. 

• A regular post-retirement pension.
  
  
• 100% tax relief under Section 80 CCA up to Rs.40,000 premium every year.
  
  
• Guaranteed returns, presently 12.5%.
  
  
• Absolute security.
  
  
• Lump sum payments to the annuitant's heirs.

Premium payment term and limits

You can effect a policy either on a single-premium basis or on level premium basis. Level premiums can be paid for any period up to 35 years, and the premium paying period is one year less than the deferment period. The minimum yearly premium must be Rs.100; the minimum half-yearly premium is Rs.50.

Premium rebate

A rebate of 1.5% of the premium is allowed if the mode of payment of premium is yearly. Premiums above Rs.5,000 per year will also get a rebate of 1.5%

Vesting age

The pension payments start at the vesting age, which you can select, but it cannot be below 50 years.

Surrender value

80%-90% of the premiums paid are recoverable in case you surrender the policy after at least 3 years of its date of issue, but before the date on which the annuity vests. However, the policy cannot be surrendered once the annuity has vested.

Lump sum benefits for the annuitant's estate

In addition to the payments during the annuitant's lifetime, this plan offers a lump sum payment to the annuitant's estate upon his death. This is called GIVE.

As for GIVE, this is built up based on the premium payments made by the annuitant. The point to note is that GIVE represents a return to the annuitant at the rate of 10%-11% per annum on the premium installment paid.

No medical examination is required in this policy

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