Financial Daily from THE HINDU group of publications
Sunday, Mar 16, 2003
Financial Daily from THE HINDU group of publications Sunday, Mar 16, 2003 |
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Investment World
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Pension Plans Money & Banking - Pension Plans Industry & Economy - Investments Max New York Life's Pension Plan Nath Balakrishnan
THE pension plans market has witnessed the entry of an additional player — Max New York Life (MNYL). Let us take a look at what the key features of MNYL's pension plan are:
Plan details
Participants can either pay a fixed premium every year (payable yearly or half-yearly) for a specified term, or pay a single premium. On maturity, the policy will provide a corpus that includes the sum assured and the pure endowment benefits purchased out of the bonuses declared. Bonuses are not guaranteed and are a function of the company's investment performance. One can commute up to 25 per cent of the corpus on maturity and buy an annuity with the remaining amount. The annuity options offered by MNYL are:
Annuity for life: The policyholder will receive an annuity till his death Annuity for a guaranteed minimum period of 5/10/15/20 years and for life thereafter: Under this option, the beneficiary will receive annuities for the chosen period if the policyholder dies. Should the policyholder survive the term chosen by him, he will receive annuities for life. Annuity for life with return of purchase price: The policyholder will receive an annuity for life. On his death, the beneficiary will get a refund of the amount used to take the annuity. The annuity need not be purchased from MNYL and the policyholder has the flexibility to choose any other IRDA-approved company.
Surrender value
The policy acquires a surrender value after one year. The value paid will be a minimum of 55 per cent of all premiums paid in the case of regular premium policies and 80 per cent in the case of a single premium policy.
Death benefit
If the policyholder dies within one year from the effective policy date, the premium paid will be refunded without interest. If the policyholder dies after one year, the payout will be a refund of premiums with a minimum guaranteed interest rate of 3 per cent per annum (compounded). This is, however, subject to a ceiling of the sum assured together with the cash value of the pure endowment benefits.
Riders/loans
No riders can be appended to this plan nor can a loan be taken against the policy.
Suitability
Better access to healthcare facilities and greater health awareness will ensure an increase in the average lifespan of an individual. Plans such as these will provide an avenue to sustain the quality of one's life in the post-retirement years.
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