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Canara HSBC OBC Life Insurance Smart Immediate Income Plan

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Canara HSBC OBC Life Insurance Smart Immediate Income Plan Review

Canara HSBC OBC Life Insurance Smart Immediate Income Plan is a traditional Immediate Annuity plan which provides a stream of regular annuities immediately after the plan is purchased. This plan is designed to provide a source of income post retirement.


Highlights of the Canara HSBC OBC Life Insurance Smart Immediate Income Plan

  • This is a traditional annuity plan wherein the annuity payments start immediately after the plan is purchased.
  • The premium is payable at once on plan inception after which the annuity payouts commence.
  • Policyholder’s spouse, child, parent or parent-in-law can also be covered to receive annuity by choosing the Joint Life Annuity Option available under the plan.
  • The purchase price is returned on death of the annuitant.
  • The plan can be purchased for meeting the commitments of a Reverse Mortgage schemes for providing guaranteed annuities to home owners. 
  • There are two types of payout options to select from.
  • Higher payouts are available for higher purchase price levels.


Working of the Canara HSBC OBC Life Insurance Smart Immediate Income Plan

  • The policyholder chooses the Single Premium he wants to pay, the annuity frequency and the annuity payout option. Based on the above parameters, the amount of annuity payable is calculated. 
  • The annuity is paid as per the chosen frequency and the payout option immediately after the plan is purchased. 
  • There is no maturity under the plan. On death, the purchase price which is the single premium paid to buy the policy is returned.

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Benefits and Features of Canara HSBC OBC Life Insurance Smart Immediate Income Plan

  • Annuity Payouts – The plan has 2 types of annuity payout options. One is for Single Life and the other is for Joint Life Annuity. The options and their respective payouts are as follows:
    • Lifetime annuity for the annuitant and return of purchase price on death of the annuitant
    • Lifetime annuity for the annuitant. After his death, lifetime annuity is payable to the secondary annuitant. On death of the last survivor, the purchase price is returned to the nominee.
      The secondary annuitant can be the spouse, child, parent or parent-in-law.
  • Bonus – This is a non-participating plan and as such, bonuses are not declared. 
  • Loan –Loans are not available under the plan.
  • Tax benefit – Premiums paid under the plan would be exempt from tax under Section 80CCC. The annuity payments received, however, would be taxable under Section 10(10A) of the Income Tax provisions.


Eligibility Criteria of Canara HSBC OBC Life Insurance Smart Immediate Income Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
  Minimum Maximum
Entry age (Last Birthday) 30 years 99 years
Premium payable (Purchase Price) Rs.2 lakh No limit
Premium Paying Term Single Pay
Annuity payouts Single Life:
Yearly – Rs.12,33
Half-yearly – Rs.5959
Quarterly – Rs.2934
Monthly – Rs.969
Joint Life:
Yearly – Rs.13,494
Half-yearly – Rs.6538
Quarterly – Rs.3218
Monthly – Rs.1063
Subject to entry age and purchase price paid
Premium payment mode

Single Pay

Annuity Frequency Annual, half-yearly, quarterly or monthly



Additional Benefits of Canara HSBC OBC Life Insurance Smart Immediate Income Plan

  • Riders – Riders are not available with the plan.
  • Higher annuity options – If the Purchase Price is Rs.2 lakhs and above, an annuitant can avail higher annuity payouts as per the following table:
Purchase Price Additional annualized annuity rate
Up to Rs.2 lakhs Nil
Rs.2 lakhs to less than Rs.3 lakhs Rs.1.10 per Rs.1000 of the purchase price
Rs.3 lakhs to less than Rs.5 lakhs Rs.1.50 per Rs.1000 of the purchase price
Rs.5 lakhs to less than Rs.10 lakhs Rs.1.80 per Rs.1000 of the purchase price
Rs.10 lakhs and above Rs.2.00 per Rs.1000 of the purchase price
 
  • Grace Period – Since it is a single premium plan, grace period clause is not applicable.
  • Free Look Period – A cooling off period or a free look period of 15 days (30 days for distance marketing channels) is granted to the policyholder after the policy issuance to review the policy terms and conditions. If found unsatisfactory, the policyholder can cancel the policy and get the premium refunded after adjustment of the applicable costs.


Annuity Illustration

The following graph shows the annuity rates payable for single life annuity at different purchase price and age combinations.


Exclusions in Canara HSBC OBC Life Insurance Smart Immediate Income Plan

  • There are no mentionable exclusions under the plan.


Surrendering the policy

Surrendering the policy is not allowed and annuity payouts would continue till the annuitant and/or his spouse’s lifetime.


 
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