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MetLife Immediate Annuity Plan

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MetLife Immediate Annuity Plan Review

MetLife Immediate Annuity Plan is a traditional retirement insurance plan which promises annuity payouts immediately after the plan is bought. Thus, the plan provides a steady source of income to the policyholder to deal with his retirement expenses.


Highlights of the MetLife Immediate Annuity 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 can also be covered to receive annuity by choosing the Joint Life Annuity Option available under the plan.
  • There are multiple types of payout options to select from.


Working of the MetLife Immediate Annuity 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 Single Premium can be paid either using the Tied Annuity Option or Standalone Annuity Option. 
  • Under the Tied Annuity Option, proceeds of MetLife’s Deferred Annuity Plan can be used to buy the plan.
  • Under the Standalone Annuity Option, the premium can be funded from any other insurer’s Deferred Annuity Plan or from the policyholder’s own funds. 
  • The annuity is paid as per the chosen frequency and the payout option.
  • There is no maturity under the plan. On death, the benefit received depends on the annuity payout option selected.

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Benefits and Features of MetLife Immediate Annuity Plan

  • Annuity Payouts –The plan has 6 different types of annuity payout options for Single Life and four types of options for Joint Life Annuity. The options and their respective payouts are as follows:
    Single Life Annuity -
    • Uniform Annuity paid for the entire life of the annuitant
    • Uniform annuity paid for the entire life and return of Purchase Price on death of the annuitant
    • Uniform Annuity paid for the annuitant’s lifetime and on death of the annuitant, the balance of the Purchase Price (Purchase Price – total annuity payouts already paid) would be paid.
    • Annuity paid for a guaranteed tenure of 5, 10, 15 or 20 years and thereafter payable for life at a uniform rate.
    • Annuity paid for the entire life which would increase every year at a simple rate of 3% per annum.
    • Annuity paid for the entire life which would increase every year at a simple rate of 3% per annum. On death of the annuitant, the Purchase Price is returned.
    Joint Life Annuity -
    • Joint Life, Last Survivor annuity wherein the annuity is paid for the annuitant’s lifetime. After the death of the annuitant, the annuity is paid for the lifetime of the surviving spouse.
    • Joint Life, Last Survivor annuity with return of Purchase Price. Under this option, annuity is paid for the annuitant’s lifetime after which it continues till the spouse’s lifetime. On the death of the spouse, the purchase price is paid.
    • Joint Life Annuity payable to the annuitant for his lifetime. After the annuitant’s death, 50% of the annuity would be paid for the spouse’s lifetime.
    • Joint Life Annuity payable to the annuitant for his lifetime. After the annuitant’s death, 50% of the annuity would be paid for the spouse’s lifetime. On the spouse’s death, the Purchase Price is returned. 
  • 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 MetLife Immediate Annuity Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
  Minimum Maximum
Entry age (Last Birthday) Standalone Annuity Option: Single Life Option - 30 years
Joint Life Option (both lives) – 40 years
Tied Annuity Option:
Single Life Option - 0 years
Joint Life Option (both lives) – 18 years
Standalone Annuity Option – 0 years
Tied Annuity Option – 90 years
Premium payable (Purchase Price) Standalone Annuity Option:
Increasing Life Annuity and Increasing Life Annuity with Return of Purchase Price – Rs.5 lakhs
Other Option – Rs.3 lakhs
Tied Annuity Option - NA
 
Premium Paying Term Single Pay
Annuity payouts Monthly – Rs.1000 Subject to entry age and purchase price paid
Premium payment mode Single Pay



Additional Benefits of MetLife Immediate Annuity Plan

  • Riders – Riders are not available with the plan.
  • 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 do the following:
    • For Tied Annuity Option where the annuity is purchased using the proceeds of MetLife’s Deferred Annuity Plan, the annuity option selected at first can be changed but the Purchase Price cannot be returned.
    • For Tied Annuity Option where the annuity was not purchased compulsorily from the proceeds of MetLife’s Deferred Annuity Plan, the policy can be cancelled and the Purchase Price can be returned after deduction of specified charges. The Purchase Price would be returned to the insurer from which another annuity is to be purchased. 
    • For Standalone Annuity Option where annuity is purchased using the policyholder’s own funds, the policy can be cancelled and the Purchase Price can be returned after deduction of specified charges.
    • For Standalone Annuity Option where annuity is purchased using the proceeds of an annuity plan from another insurer, the policy can be cancelled and the Purchase Price can be returned after deduction of specified charges. The Purchase Price would be returned to the insurer from which another annuity is to be purchased.


Exclusions in MetLife Immediate Annuity 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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