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Birla Sun Life Insurance-Empower Pension SP Plan

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Birla Sun Life Insurance-Empower Pension SP Plan Review

BSLI Empower Pension SP Plan is a Unit Linked Pension Plan where premium is payable only once while the returns are generated over the plan tenure. The plan helps in building up a retirement corpus.


Highlights of the Birla Sun Life Insurance-Empower Pension SP Plan

  • This is a Unit Linked Plan where the single premium paid is invested in market linked funds so that they earn attractive returns.
  • The plan has Smart Option wherein the investment portfolio is managed automatically by the company in a pre-specified manner.
  • Three types of Guaranteed Additions are added to the Fund Value for an enhanced growth.


Working of the Birla Sun Life Insurance-Empower Pension SP Plan

  • The policyholder decides on the amount of single premium he wants to pay. He also decides the plan tenure and the risk profile (Aggressive, Moderate or Conservative) based on which his premiums would be allocated. 
  • The premium paid, after deducting the allocation charge is invested as per the Smart Option. Under this option, the net premium is allocated to Maximizer Guaranteed and Income Advantage Fund. The investment is managed by the company in both the funds as per a pre-specified proportion over the policy tenure. The allocation rate would depend on the risk profile chosen and the tenure. Over the policy tenure, the allocation would be automatically shifted to less risky funds to protect the returns from market volatility. 
  • If the policyholder dies during the tenure of the plan the death benefit is paid.
  • When the plan tenure ends, the Vesting benefit is paid.

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Benefits and Features of Birla Sun Life Insurance-Empower Pension SP Plan

  • Vesting Benefit – The date when the plan term ends is called the Vesting date and on that date the Vesting Benefit is paid to the policyholder. The benefit would be higher of the following:
    • Total Fund Value as on that date, or
    • The Guaranteed Vesting Benefit which depends on the risk profile and the vesting date.
      The minimum Guaranteed Vesting Benefit should be 101% of all premiums paid under the plan. The rate of the benefit depending on the vesting date and the risk profile as determined by the company is as follows:
    Years to vesting Aggressive risk Moderate risk Conservative risk
    5 years - - 115%
    6-10 years 103% 110% 120%
    11-15 years 106% 119% 140%
    16-20 years 109% 128% 160%

    On the vesting date, the policyholder would have to choose any one of the following options of availing the vesting benefit. The options are:
    • 1/3rd of the vesting benefit could be withdrawn as lump sum and the remaining 2/3rd of the benefit could be used to buy an Immediate Annuity plan from the company 
    • The entire benefit can be used to buy an Immediate Annuity plan from the company 
    • The entire amount of vesting benefit can be used to purchase a Single Premium Deferred Annuity Plan from the company
    • If the policyholder is aged less than 55 years on the vesting date, he may choose to extend the vesting date to another available period. Additional premiums might be paid during this period and the Fund Value would be invested in the Advantage Guaranteed Fund for the deferment period. 
  • Death Benefit – If the insured dies before the vesting date, higher of the following would be paid as death benefit:
    • Fund Value as on the date of death, or
    • Guaranteed Death Benefit.
      The Guaranteed Death Benefit would be the higher of the following:
    • 105% of all premiums paid till death
    • The aggregate premiums paid till death compounded at a guaranteed rate which is 0.5% p.a. for Aggressive Risk Profile, 1.5% p.a. for Moderate and 3% for Conservative Risk Profile.
      The nominee can either withdraw the entire death benefit in one lump sum or use it entirely or partially to purchase an annuity plan from the company.
  • Bonus – Being a ULIP plan, bonus is not declared.
  • Guaranteed Additions – Guaranteed Additions are added under the plan three times at specified intervals. Once started, they accrue every year thereafter. The period from which the additions start and the rate of addition are mentioned below:
From the end of the policy year Rate of addition
6th year 0.25% of the average Fund Value of the last 12 months
11th year 0.35% of the average Fund Value of the last 12 months
16th year 0.35% of the average Fund Value of the last 12 months
 
  • Claw-back Additions – As per the IRDA regulations, non-negative additions would be added to the Single Premium Fund Value to fulfill the maximum reduction in yield criteria from the end of the 5th policy year.
  • Loan –Loan is not available under the plan.
  • Tax benefit – Premiums paid under the plan would be exempt from tax under Section 80CCC. The part of vesting benefit commuted (1/3rd part which is taken as lump sum) would be exempt from tax under Section 10(10A).


Eligibility Criteria of Birla Sun Life Insurance-Empower Pension SP Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
 
  Minimum Maximum
Entry age (Last Birthday) 25 years 70 years
Vesting Age (Last Birthday) NA 80 years
Plan tenure 5 years 20 years
Premium payable Rs.1 lakh No limit
Premium Paying Term Single Pay
Premium payment mode Single Pay


Applicable charges in Birla Sun Life Insurance-Empower Pension SP Plan

Being a ULIP plan, there are certain charges applicable. The charges include the following:
  • Premium Allocation Charge – 3% of the Single Premium paid would be levied as premium allocation charges and would be deducted from the Single Premium paid before it is invested in any fund.
  • Policy Administration Charge – A monthly charge of Rs.20would be charged as Policy Administration Charges in the first 5 policy years. From the 6th year, it would increase to Rs.25 per month and then inflate every year @5% p.a. subject to maximum of Rs.6000
  • Fund management Charge – These charges depend on the type of fund selected and are charged on a daily basis. The applicable charges are:
Fund Type Charge
Income Advantage Guaranteed 1 % per annum
Maximizer Guaranteed 1.35% per annum
 
  • Miscellaneous Charges – A charge of Rs.250 per transaction for any services rendered by the company is charged. The charge may increase any time subject to a maximum of Rs.500 per request.
  • Investment Guarantee Charge – 0.25% per annum of the fund value and any top-up fund value would be deducted as Investment Guarantee Charge. This charge might be increased subject to a maximum of 0.50% p.a.
  • Discontinuance Charge – Applicable for policies in which premiums are discontinued. The charges are:
Year of Discontinuance Annual Premiums up to Rs.25,000
1 Lower of 1% of the single premium or Fund Value up to a maximum of Rs.6000
2 Lower of 0.5% of the single premium or Fund Value up to a maximum of Rs.5000
3 Lower of 0.25% of the single premium or Fund Value up to a maximum of Rs.4000
4 Lower of 0.1% of the single premium or Fund Value up to a maximum of Rs.2000
5 year onwards Nil


Additional Benefits of Birla Sun Life Insurance-Empower Pension SP Plan

  • Riders – There are no riders under this plan.
  • Top-up Premiums – Top-ups are not allowed under the plan.
  • Grace Period – Since only a single premium is paid under the plan, there is no default in paying the premium and thus, no provision of a grace period.
  • Free Look Period – A cooling off period or a free look period of 15 days (30 days for distance marketing mode) 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


Plan Details

BSLI Empower Pension - SP Plan is a unit linked, non-participating single pay pension plan.

A simple, hassle free plan that invests your single premium and the investment returns thereof into a corpus for your retirement. This period of retirement corpus generation is called the "accumulation period". Once you decide to vest your policy, you will enter into the "income phase" where your corpus will be used to purchase a stream of regular income payable for the rest of your lifetime.

During the accumulation period we offer our Smart Option - an option where you allow us to manage and administer your investment portfolio on your behalf, based on your chosen vesting date and risk profile to meet your retirement objectives.

Your accumulated retirement corpus is utilized at vesting (retirement) to purchase an annuity option with us prevailing at that time.


Exclusions in Birla Sun Life Insurance-Empower Pension SP Plan

  • If the policyholder commits suicide anytime during the plan tenure, the available Fund Value would be paid to the nominee.


Surrendering the policy

  • Within the first 5 policy years
The policy has a 5 year lock-in period. If the policy is surrendered within the first 5 years, the funds in the Fund Value and any top-up premium Fund Value would be transferred to the Pension Discontinued Policy Fund after deducting the Discontinuation charges. The money would remain in the Pension Discontinued Policy Fund till the completion of 5 years and the Fund Management charges would be deducted as and when applicable. If the policyholder dies during this period, the Fund Value as on the date of death would be paid. Otherwise, after the completion of the lock-in period of 5 years, the Fund Value would be available as the Surrender Value
  • After 5 years
    If the plan is surrendered any time after the completion of 5 years, the available Fund Value would be available as Surrender Value.
    The policyholder can use the Surrender Value 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 value could be used to buy an Immediate Annuity plan from the company 
    • The entire amount of surrender value can be used to purchase a Single Premium Deferred Annuity Plan from the company
    • The entire Surrender Value could be utilized to buy an Immediate Annuity Plan from the company.
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