Consumers looking at retirement products for pension planning will have a lot to choose from with a number of life insurance companies planning to launch pension products, following recent guidelines issued by the Insurance Regulatory and Development Authority (IRDA) on pension products.
Against the current practice of no guaranteed return, policyholders are now being offered a capital guarantee —where the insured will atleast get back the total premium paid.
Life Insurance Corporation, HDFC Life Insurance, Birla Sun Life Insurance and ICICI Prudential Life Insurance have already launched pension products while few others including Bajaj Allianz Life Insurance and Aegon Religare Life Insurance are mulling options.
“Companies are now launching pension products as there is clarity from IRDA regarding pension plans,” said Yashish Dahiya, chief executive officer, Policybazaar.com.
Life insurers offering pension products withdrew them last year following IRDA’s guidelines relating to pension plans that said all unit-linked pension plans (in which a part of fund is invested in stocks or bonds) should specify assured benefits on pension plans, applicable on death, surrender or maturity.
“Pension plans earlier were not offering guaranteed amount to the policyholders,” said Dahiya. “New pension plans are offering assured benefits to the policyholders. There is a capital guarantee for the policy holder which means that the family gets a specified amount in case of a mishap.”
Capital guarantee means that the policyholder will atleast get back the total premium she/he has paid.
"We have already applied for the pension product. Once we get the approval we will launch the product," said a spokesperson at Bajaj Allianz Life Insurance.