ICICI Prudential has an insurance-cum-pension plan that covers not only risk but also provides pension after retirement.
How does the Plan work? First, select a premium payment term that stretches over 3 to 5 years. The minimum amount of premium is Rs 1,00,000 for a three-year period or Rs 60,000 for five years. The vesting age lies between 50 and 80 years, subject to a minimum term of 10 years. Second, when you pay the premium for 3 or 5 years, the amount is invested in different types of mutual fund schemes. The principal amount along with the earnings swells to a size that is sufficient for the payment of pension regularly. Third, if you survive till the vesting age, you get pension. You do have an option to get up to one-third of the fund value as lumpsum. If you do not survive up to the beginning of the vesting age, the spouse/nominee receives the fund value. Alternatively, the fund value can be used to buy an annuity from ICICI Prudential.
Fourth, the payment of pension begins the moment you reach the age of 50. However, you have an option to defer this date till the age of 80 years. Fifth, the amount of premium is invested in different types of schemes that contain various combinations of risk and return. The higher the risk, the greater is the return. The lower the risk, the smaller is the return. You are free to choose a particular combination and accordingly, your premium will be invested. Sixth, you are free also to choose the frequency of pension payment. The annuity can be received monthly/ quarterly /half-yearly /yearly. You are free also to choose any of the following pension schemes: (a) Life annuity (b) Life annuity with return of purchase price (c) Life annuity guaranteed for 5/10/15 years and for the life thereafter (d) Joint life with or without return of purchase price