tata aia life insurance
TATA AIA Life Smart Annuity Policy

TATA AIA Life Smart Annuity Plan

When we approach retirement age, we move towards the second innings of life, which is devoid of duties and responsibilities. Rather, often we worry about this age as the regular flow of income gets hampered, and our physical strength decreases. To spend your retirement days worry-free, you should plan early, and one of the most fruitful things is to invest in a retirement plan so that you can reap maximum benefits in your retirement time.

When it comes to annuity plans, Tata AIA Life Insurance Company is worth mentioning as it has come up with different types of retirement plans to cater to the varied needs of individuals. One such marvelous plan is Tata AIA Smart Annuity Plan which is a Single Premium Non-Linked, Non-Participating Individual Retirement Plan. This policy helps you to gain financial independence in the golden days of your life by offering you a regular income to help you manage your expenses post-retirement so that you can live your life without any financial tensions.

Eligibility Criteria

ParametersDescriptions
Age at entryMinimum – 45 years, Maximum – 85 years
Minimum annuity purchase price

Immediate Life Annuity – Rs. 87,527

Immediate Life Annuity with Return of Purchase Price – Rs. 2,06,155

Deferred Life Annuity with Return of Purchase Price – Rs. 1,08,303

Maximum annuity purchase priceNo upper limit, subject to board approved underwriting policy.
Minimum annuity payout

Yearly – Rs. 12000, Half-yearly – Rs. 6000

Quarterly – Rs. 3000, Monthly – Rs. 1000

Maximum annuity payoutNo upper limit
Premium payment periodSingle premium

Benefits That Tata AIA Smart Annuity Plan Offers

This plan has come up with a sack full of benefits and facilities that promise to keep you safe and protected during your retirement days so that no dream of yours gets hindered because of financial tensions. The following details will give you a clear view of the plan. have a look.

Annuity Options:

There are three annuity options as follows.

Immediate Life Annuity Option:

  • Single Life
    • The annuity shall be payable in arrears as per the payment mode chosen by you for as long as the Annuitant is alive.
    • On the death of the Annuitant, the annuity payments will cease and no further benefits will be payable.
  • Joint Life
    • The annuity shall be payable in arrears as per the payment mode chosen by you for as long as either the Primary or the Secondary Annuitant is alive.
    • On the death of both annuitants, the annuity payments will cease and no further benefits will be payable.

Immediate Life Annuity with Return of Purchase Price Option:

  • Single Life
    • The annuity shall be payable in arrears as per the payment mode chosen by you for as long as the annuitant is alive.
    • On the death of the Annuitant, the Death Benefit is payable as a lump sum to the nominee and no further amount will be payable. Upon payment of the death benefit, the policy will terminate.
  • Joint Life
    • The annuity shall be payable in arrears as per your chosen payment mode for as long as either the primary or the secondary annuitant is alive.
    • The death benefit is payable as a lump sum to the nominee on later of the deaths of the two annuitants. 

Deferred Life Annuity with Return of Purchase Price Option:

The deferment Period may be between 1 to 10 years (Integer values), as chosen by you at inception. The Annuity Rate will be as guaranteed at the inception of the Policy.

  • Single Life
    • The annuity shall be payable in arrears post deferment period as per payment mode chosen by you, for as long as the Annuitant is alive.
    • On the death of the annuitant, the death benefit is payable as a lump sum to the nominee and no further amount will be payable. 
  • Joint Life
    • The annuity shall be payable in arrears post deferment period as per the payment mode chosen by you, for as long as either of the Primary or the Secondary Annuitant is alive.
    • The death benefit is payable as a lump sum to the nominee, on later of the deaths of the two Annuitants. 

Annuity Payout:

The Purchase Price is payable in advance at the start of a contract. Your annuity (for annual mode) will be calculated as follows:

  • Yearly Annuity (Single Life) = Rate A (Purchase Price up to Rs. 125,000) + Rate B (Purchase price in excess of Rs. 125,000).
  • Yearly Annuity (Joint Life) = Rate A (Purchase Price up to Rs. 150,000) + Rate B (Purchase price in excess of R 150, 000).

The Purchase Price referred to above excludes applicable taxes and other statutory levies if applicable.

Different Modes of Annuity Payouts:

Your annuity will be payable in arrears at the end of chosen annuity payment mode from the date of purchase of the plan. For the yearly mode, the annuity payout will be after one year from the purchase. For the half-yearly mode, the annuity payout will be after 6 months from the purchase. For quarterly mode, the annuity payout will be after 3 months from the purchase. For the monthly mode, the annuity payout will be one month from the date of purchase.

Death Benefit:

The death benefit will vary depending on the annuity options selected by the policyholder. For the Immediate Annuity Option, no death benefit is there. For an Immediate Life Annuity with a Return of Purchase Price Option, the death benefit is 100% of the purchase price of the annuity. For Deferred Life Annuity with Return of Purchase, the death benefit will be higher of Purchase Price + Guaranteed Additions (GA) – Total Annuity Payouts till the date of death; or 110% of Purchase Price (including Top-up amount, if any).

Free Look Period:

You have a free look period of 15 days from the date of receipt of the policy document and a period of 30 days in case of Policy is obtained through electronic or distance mode.

Key Features of Tata AIA Smart Annuity Plan

Apart from the above benefits and facilities, this plan has presented a bunch of special advantages and features that have made the plan unique and popular among consumers. The following mentions give you the details of those features.

Top Up Option:

The plan offers a choice to increase your annuity payouts through the top-up option. The additional annuity amount payable is based on the top-up amount and the prevailing annuity rates at the top-up time. The age considered for the annuity rate would be the age at the time of availing top-up.

Options To Receive Death Benefits:

Under the Deferred Life Annuity Option with Return of Purchase Price option, the nominee(s) will have to choose one of the following options to receive the death benefit.

  • Lump sum death benefit – Under this option, the entire death benefit will be payable to the nominee in a lump sum.
  • Annuitisation of death benefit – Under this option, the benefit amount payable on death shall be utilized for purchasing an Immediate Annuity from the Company for the nominee(s). The annuity amount payable to the nominee(s) on the admission of death claim will be based on the nominee’s age and immediate annuity rates prevailing as of the Annuitant’s date of death. This option can be opted for full or part of the benefit amount payable on death.

Surrender Benefit:

It is payable under different options as follows:

  • Immediate Life Annuity Option (Single and Joint life option): None
  • Immediate and Deferred Life Annuity with Return of Purchase Price (Single and Joint life option): Surrender value is available for the Immediate Life with Return of Purchase Price option and Deferred Life Annuity with Return of Purchase Price option. The surrender value payable is higher than the Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV).

Policy Loan:

If You have chosen Deferred Life Annuity with Return of Purchase Price Option’, You may apply for a loan up to 80% of Surrender Value during the Deferment Period. On availing loan, the Policy must be assigned to the company. Interest will be payable on each Policy Anniversary after the loan date and until the loan is repaid. The Policy will be terminated when the loan with accrued interest exceeds the Surrender Value. If the Surrender Value exceeds the loan amount with accrued interest at the end of the Deferment Period, the excess amount shall be payable to You.

Utilization of Return of Purchase Option For NPS Subscribers:

In case this annuity option is purchased as a default option by a government sector NPS subscriber through funds accumulated in his/her NPS scheme, the utilization of Death Benefit will be as per Pension Fund Regulatory and Development Authority Regulations, 2015.

QROPS (Qualifying Recognized Overseas Pension Scheme) Benefit:

This plan can be purchased as QROPS, through the transfer of UK tax-relieved assets subject to listing and terms and conditions prescribed by HMRC (Her Majesty Revenue & Customs) such as:

  • The minimum age for annuity payments will be 55 years of age.
  • If the policy is canceled during the Free Look Period, the proceeds from cancellation will only be transferred back to the fund house from where the money was received.
  • Other terms and conditions of HMRC will also apply as applicable from time to time.

Tax Provisions:

The Purchase Price under the policy is exclusive of applicable taxes, duties, surcharges, cesses, or levies which will be entirely borne, or paid by the Annuitant, in addition to the payment of such Purchase Price.

Exclusions Under Tata AIA Smart Annuity Plan

Though there are no such exclusions under this policy. Still, there are a few clauses you keep in mind while opting for this policy-

  • Anything that does not satisfy the terms and conditions of the company as well as of the policy will fall under the category of exclusions.
  • If there is any kind of breach of law with criminal intent, that will be permanently excluded from the policy.

How Does Tata AIA Smart Annuity Plan Work?

Mr. Pathak, a 47-year-old businessman, bought himself a Tata AIA Smart Annuity plan. Let us find out what the purchase price will be for the given credentials.

ParametersData
Age47 years
Coverage forSingle life
Annuity payment modeAnnual
Type of annuityDeferred Life Annuity with Return of Purchase Price Option
Coverage up to age117 years
Annuity amountRs. 30,463
Purchase price (Single premium including GST)Rs. 5,09,000
Purchase price break-up

Base Purchase Price – Rs. 5,00,000

GST @ 1.8% – Rs. 9,000

Frequently Asked Questions

“Annuity Rate” is guaranteed at the time of annuity purchase and it depends upon the Option chosen, Entry Age of annuitants, Purchase Price, and Deferment Period, if any. Annuity rates may be reviewed by the company subject to IRDAI approval on a periodic basis.

In the case of Joint Life, the Primary Annuitant will be the primary person entitled to receive the Annuity Payouts. In contrast, the Secondary Annuitant will be entitled to receive the Annuity Payouts in the event of the death of the Primary Annuitant only if opted for. In the case of Joint Life, the Secondary Annuitant can be the spouse/child/parent/parent-in-law or sibling of the Primary Annuitant. Other relationships may be considered as long as there is an insurable interest between the Annuitants.

The annuity installment will be as specified below:

Mode 

Annuity Instalment (per mode selected)

Yearly

Yearly Annuity

Half-yearly

98% of Yearly Annuity x ½

Quarterly 

97% of Yearly Annuity x ¼

Monthly 

96% of Yearly Annuity x 1/12 

GA = Purchase Price X Annuity Rate / 12. Guaranteed Additions are accrued at the end of every policy month during the deferment period. GA stops accruing at the end of the deferment period.

There is no maturity benefit available under this policy.

No alterations can be made after the annuity has been purchased.

Life Insurers

FAQs