Annuity

Annuity means a series of payments made at successive periods or intervals of time is called annuity

Example: salary, loan repayment, SIP

Number of lives covered

Single: provides the annuity to the single annuitant during his lifetime

Annuitant means the person who buys an annuity plan.

Joint: Payments to be made during the life time annuitant and his/her spouse and to be stopped on the death of the last survivor

Mode of Annuity

Immediate Annuity : If the successive payments are made at the end of successive period or interval

Annuity Due: If the successive payments are made at the beginning of the successive period or interval

The plans offered by the insurance companies are useful for the people who have retired and are worried about the income stream and longevity.

JEEVAN AKSHAY – VI,

Type of Annuity:

1. Annuity payable for life at a uniform rate.
2. Annuity payable for 5, 10, 15 or 20 years certain and thereafter as long as the annuitant is alive.
3. Annuity for life with return of purchase price on death of the annuitant.
4. Annuity payable for life increasing at a simple rate of 3% p.a.
5. Annuity for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
6. Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant.

Annuity Rate:
Amount of annuity payable at yearly intervals which can be purchased for Rs. 1 lakh under different options is as under:

Age last birthday	Yearly annuity amount under option
	( i )	( ii ) (15 years certain)	( iii )	( iv )	( v )	( vi )
40	7510	7440	6930	5610	7310	7120
45	7770	7660	6960	5890	7500	7240
50	8140	7950	7000	6280	7760	7420
55	8650	8330	7050	6810	8130	7670
60	9350	8790	7110	7530	8640	8030
65	10410	9330	7180	8590	9400	8570
70	12080	9830	7260	10220	10560	9370
75	14510	10220	7360	12590	12240	10590

 Paid-up value:
The policy does not acquire any paid-up value.

Surrender Value :
No surrender value will be available under the policy.

Loan :
No loan will be available under the policy.

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Life Insurance Products

Joint Life Policy:

• Two or more lives can be covered under one policy
• Usually cover married couples or partners
• The SA is paid on the death of any of the insured persons during the term or at the end of the term
• Some plans also provide payment of SA on the death of one life and the policy is continued to cover the second life till maturity without payment of further premium

Children Plan

• Insurance is taken on the lives of minor children, proposal will be made by parents
• Risk on the life of the insured child begins only when child attains a specified age

Deferment period: Time gap between the date of commencement of policy and commencement of risk.

Deferred date: The date on which risk will commence. There is no insurance cover during deferment period. Risk will commence automatically on deferred date. Low premium is main advantage.

Remember: Life of the children can not be covered because insurance is a contract and contract with minor is a void contract. Hence if you practically observe, you will find that in the children plan as well life assured is of parents.

Riders

• A rider is a clause or condition that is added to a basic policy providing an additional benefit, at a choice of proposer
• Insurers find it convenient to have small number of basic plans, and riders being offered as option

Some of the riders:

1. Accident death benefit allowing double the SA if death happens due to accident
2. Permanent disability benefit
3. Cover to meet major surgical expense