All You Need to Know About Saral Pension Yojana

All You Need to Know About Saral Pension Yojana

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The Insurance Regulatory and Development Authority of India (IRDAI) made it compulsory for all life insurance providers to offer Saral Pension from April 1st, 2022. It’s a standard immediate annuity product with legal terms and conditions and simple features to help customers easily make an informed decision. Read on to learn about the Saral Pension Yojana and why it’s one of the best pension plans in India.

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What is Saral Pension Yojana?

It’s a retirement plan in the form of a single-premium immediate annuity plan. It offers a regular income for the remaining years of your life and financial security to your family after your demise.

Features of Saral Pension Yojana

  • It’s a non-linked, non-participating immediate annuity plan.
  • The plan comes with the payment option of a single premium.
  • The mode of the annuity payment is annual, half-yearly, quarterly, or monthly.
  • The plan offers 2 annuity options: single and joint life annuities.
  • You can borrow a loan against the policy after 6 months of buying the plan.
  • Depending on prevailing tax laws, you can get tax benefits (subject to change).

Benefits of Saral Pension Yojana

Survival Benefit:

  • Single-life annuity: As long as the annuitant lives, the payments are made in parts depending on the chosen mode.
  • Joint life annuity: Throughout the lifetime of the primary and/or secondary annuitant, the payments are made in parts based on the chosen mode.

Death Benefit:

  • Single-life annuity: After the annuitant dies, the payments are immediately stopped. The legal heirs or nominees then receive 100% of the purchase price from the insurance provider.
  • Joint life annuity: After the first death of any covered lives, the other annuitant keeps receiving 100% of the annuity amount as long as he/she is alive. Once the last survivor dies, the annuity payments are stopped right away. Then the nominees receive the full purchase price of the plan.

Tax Benefit:

The claims made and premiums paid for Saral Pension Yojana qualify for tax benefits under the Income Tax Act, Section 10(10A)(iii) and Section 80CCC.

Loan against Policy:

After 6 months of policy commencement, the life assured can avail of a loan against the plan. The amount of annual interest payable on the loan should be up to 50% of the annual annuity amount of the project.

Under the option of a joint life annuity, the primary annuitant can avail of a loan against the policy. Once the primary annuitant passes away, the secondary annuitant can apply for the loan.

Eligibility Criteria for Saral Pension Yojana

CriteriaMaximumMinimum
Entry Age80 years from the last birthday40 years since the previous birthday
Policy TermThis plan is for a lifetime.
Purchase PriceBased on the annuity amount.
Annuity AmountNo limitsMonthly: ₹1,000

Quarterly: ₹3,000

Half-yearly: ₹6, 000

Annually: ₹12,000

Saral Pension plan will cover all applicants, including women, men, and non-binaries. If you wish to have an annuity plan with simple features and easy-to-understand terms and conditions, secure your financial future post-retirement with this best pension plan in India.

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