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Aviva Next Innings Pension Plan

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Aviva Next Innings Pension Plan

Aviva Next Innings Pension Plan is a traditional Deferred Annuity Pension Plan wherein the policyholder can accumulate his retirement corpus through the plan. Thus the plan helps in building a retirement fund for the policyholder.


Highlights of the Aviva Next Innings Pension Plan

  • This is a traditional deferred annuity plan where bonuses are not declared.
  • Premiums under the plan can either be paid for a limited tenure or in one lump sum.
  • The plan provides a guaranteed lump sum corpus on maturity while the death benefit depends on the premiums paid and the interest earned.


Working of the Aviva Next Innings Pension Plan

  • The policyholder chooses the policy tenure, the premium paying frequency, the premium paying term and the premium amount. 
  • Premiums are to be paid for a limited tenure or in one lump sum as chosen by the policyholder.
  • On death during the period, the death benefit is paid.
  • On maturity, the vesting benefit is paid.

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Benefits and Features of Aviva Next Innings Pension Plan

  • Vesting Benefit – When the plan matures and the premiums have been duly paid, the vesting benefit payable would be 210% of the total premiums paid under the plan. the vesting benefit should be used in any of the following ways:
    • 1/3rd of the vesting benefit could be withdrawn as lump sum and the remaining 2/3rd of the benefit should be used to buy an Immediate Annuity plan from the company 
    • The entire amount of vesting benefit can be used to purchase an Immediate Annuity Plan from the company. 
    • Alternatively, a Single Premium Deferred Annuity Plan can also be purchased from the company using the entire Vesting benefit availed under the plan.
  • Death Benefit – If the insured dies during plan term and the policy is in force, the death benefit payable would be higher of the following:
    • Premiums paid till death compounded at an annual rate of 6%
    • 150% of the total premiums paid till the date of death.
      The death benefit could be used by the nominee to purchase an Immediate Annuity plan from the company or the benefit could be completely withdrawn in lump sum.
  • Bonus – The plan does not earn bonuses.
  • Loan –Loans are not available under the plan.
  • Tax benefit – Premiums paid under the plan would be exempt from tax under Section 80C up to a limit of Rs.1.5 lakhs. The benefits received would be taxable under Section 10(10A) of the Income Tax Act.


Eligibility Criteria of Aviva Next Innings Pension Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
 
  Minimum Maximum
Entry age (Last Birthday) 42 years 60 years
Maturity or Vesting Age (Last Birthday) 55 years 78 years
Plan tenure 13, 16 or 18 years
Premium payable annually Single Pay – Rs.1.5 lakhs
Limited Pay – Rs.50,000
Rs.5 crores
Premium Paying Term (PPT) 5 or 10 years or Single Pay
Premium payment mode Monthly, half-yearly, or annually or Single Pay



Additional Benefits of Aviva Next Innings Pension Plan

  • Riders – Riders are not available under the plan.
  • Grace Period – A grace period of 30 days is allowed for payment of premium after the due date for annual and half-yearly modes of premium payment. For monthly modes, the grace period allowed is 15 days. 
  • Free Look Period – A cooling off period or a free look period of 15 days is granted to the policyholder after the policy issuance to review the policy terms and conditions. If found unsatisfactory, the plan can be cancelled within this period and the premium paid would be refunded after deducting the relevant mortality charge, service tax, cess and stamp duty paid.


Exclusions in Aviva Next Innings Pension Plan

The plan has no exclusions.
 

Non-Payment of premium in Aviva Next Innings Pension Plan

Premiums under a limited premium plan have to be paid for at least 2 years otherwise the policy would lapse without accruing any benefits if it is not revived within the revival period. After the first 2 years’ premiums and have been paid and later premiums are not paid, the policyholder can surrender the policy or make it paid-up.

Making the policy Paid-up

If at least2 full years’ premium has been paid under a limited premium plan, the policy would become a paid-up policy if future premiums are not paid. The benefits under the plan would be reduced and would be called Paid-up benefits. The following benefits would be paid on a paid-up policy:
  • Death Benefit –the death benefit under a paid-up policy would be higher of the following:
    • Premiums paid till death compounded at an annual rate of 6%
    • 150% of the total premiums paid till the date of death.
      The nominee can either buy an Immediate Annuity plan or withdraw the death benefit in lump sum.
  • Maturity benefit – the paid-up value under the plan would be paid on maturity. The paid-up value would be 210% of the premiums paid under the plan till maturity. The maturity benefit should be utilized as mentioned earlier, i.e. to buy an Immediate or a Single Premium Deferred Annuity Plan from the company.


Surrendering the policy

Surrender is allowed only after the policy becomes paid-up, i.e. after 2years’ premiums have been paid for a limited premium plan. Single Premium plans can be surrendered any time after the completion of the first policy year. On surrendering the policy, higher of the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV) would be paid.
  • GSV = GSV Factor * the total premiums paid
  • The SSV would be declared by the company based on its performance and would be calculated as follows:
    SSV = SSV Factor * Paid-up Value where the Paid-up Value is 210% of the total premiums paid.
The policyholder can avail the Surrender benefit in any of the following ways:
  • 1/3rd of the Surrender Value could be withdrawn as lump sum and the remaining 2/3rd of the benefit should be used to buy an Immediate Annuity plan from the company 
  • The entire amount of Surrender Value can be used to purchase an Immediate Annuity Plan from the company. 
  • Alternatively, a Single Premium Deferred Annuity Plan can also be purchased from the company using the entire Surrender Value availed under the plan.
However, if the policyholder is not eligible to buy an Immediate Annuity Plan or a Single Premium Deferred Annuity Plan, the Surrender Value would be paid and the plan would be terminated.

Revival 
Revival is allowed within 2 years from the date of the first unpaid premium. The policyholder would be required to pay the outstanding premium and interest charged at the rate of 9% by the insurer to revive his policy. A revival charge of Rs.250 would also have to be paid for reviving the plan.
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