These two SBI life insurance covers can help you retire smart, earn pension

Most people would want their retirement to be more relaxed and have less financial burden. This becomes easier if you have a life insurance cover.  This is exactly what largest lender State Bank of India is offering to customers. The bank offers different types of life insurance covers for retirement, which can help citizens earn pension and retire smart. A life insurance is among the most common and traditional mode of investment, where a citizen pays premium for a certain specified period to earn a lump sum amount offered by banks. Generally, life insurance is opted either on the death of insured person or maturity period. Appointment of nominee is also allowed. Here’s how SBI’s retirement insurance plans are:

SBI Life - Saral Pension

This is a Pension Product. Benefits by way of surrender, complete withdrawal or maturity/vesting will be available in the form of annuities except to the extent of commutation of such benefits as allowed under the Income Tax Rules'.

Vesting benefit:

On attaining the vesting age, the vesting benefit equal to the Sum Assured plus Vested Simple Reversionary bonus plus Terminal bonus, if any, will be paid by us. You have the following options:

• To purchase immediate annuity from the entire policy proceeds
• To purchase immediate annuity with an option to commute upto one-third of the policy proceeds as per current Income Tax rule
• To utilize the entire proceeds to purchase a Single premium deferred pension product
• To extend the accumulation period or defer the vesting date, provided you are below age of 55 years on vesting. The maximum extended period will be up to age 70 years

Death Benefit:

In an event of death of the policyholder, the death benefit proceed will be higher of total premiums paid accumulated at an interest rate of 0.25% p.a. compounded annually plus vested reversionary bonus plus terminal bonuses, if any, or 105% of total premiums will be paid to the nominee. The nominee will have the following options:

To receive entire proceeds as lump sum.

Utilize the entire proceeds of the policy or part thereof for purchasing an annuity at the then prevailing rate. The annuity should be purchased from SBI Life only. The annuity rates available for the purchase of this annuity will be based on the prevailing annuity rates on the immediate annuity product.

2. SBI Life - Retire Smart plan:

Enjoy an assured maturity benefit that secures your investment from market volatility, with SBI Life – Retire Smart. Secure your future by creating a retirement corpus with systematic investments during your earning years.

Maturiting/vesting benefits:

On completion of policy term, you will receive the Higher of (Fund Value Plus Terminal Addition or 101% total premiums paid).

You have the following options on Maturity / Vesting:

• To purchase immediate annuity, from the entire policy proceeds
• To purchase a single premium deferred pension product, from the entire policy proceeds
• To purchase immediate annuity with an option to commute up-to one-third of the policy proceeds, as per current Income Tax rules
• To extend the accumulation period or defer the vesting date provided you are below age of 55 years at vesting. The maximum extended period will be up to age 80 years.

In case the eligibility criteria of the approved immediate annuity product are not met (e.g. minimum annuity amount) the vesting benefit will be paid in lump sum.

Death Benefits:

In the unfortunate event of death of the Life Assured, Higher of (Fund Value plus Terminal Addition or 105% of total premiums paid till the time of death), is payable.

The beneficiary can use the death benefit amount, as per the below mentioned options:

• Receive the entire proceeds as lump sum
• Utilize the entire proceeds of the policy or part thereof for purchasing an annuity, at the then prevailing rate, provided eligibility criteria of the approved immediate annuity product is met (e.g. minimum annuity amount or age criterion).

These policies are also eligible for tax exemptions under section 80C of Income Tax Act.