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MetLife Retirement Savings Plan
MetLife Retirement Savings Plan Review
MetLife Retirement Savings Plan is a traditional retirement plan wherein the policyholder can build up a retirement corpus from which annuity payouts can be availed. This is a participating plan wherein bonuses help in enhancing the corpus accumulated.
Highlights of the MetLife Retirement Savings Plan
This is a traditional deferred annuity plan where bonuses are declared.
Premiums under the plan can either be paid in one lump sum, for a limited period or for the entire duration of the plan.
Bonuses increase the corpus under the plan.
Working of the MetLife Retirement Savings Plan
The policyholder chooses the policy tenure, the premium paying frequency, the premium paying term and the Sum Assured. Based on these parameters, the premium is decided.
Premiums are to be paid for the entire plan duration or a limited tenure or in one lump sum as chosen by the policyholder.
Bonuses accrue from the third policy year.
On death during the period, the death benefit is paid.
On maturity, the vesting benefit is paid.
COMPARE THIS PLAN WITH OTHER PENSION PLANS
Benefits and Features of MetLife Retirement Savings Plan
Vesting Benefit – When the plan matures and the premiums have been duly paid, the vesting benefit payable would be as follows:
Sum Assured + accrued reversionary bonuses + Terminal Bonus (if any).
The policyholder can utilize the vesting benefit 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1/3rd of the vesting benefit could be withdrawn as lump sum and the remaining 2/3rd of the benefit should be used to buy an Immediate Annuity plan from the company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.
If the policyholder is aged below 55 years on the Vesting Date, the vesting date can be extended and the benefit would then be paid after the deferred period.
Death Benefit – If the insured dies during plan term and the policy is in force, the death benefit payable would be the following:
Death Sum Assured + accrued reversionary bonuses + Terminal Bonus, if any
The Death Sum Assured would be equal to 105% of the total premiums paid till the date of death and the total death benefit would not be lower than the Surrender Value of the plan.
The death benefit could be partially or fully used by the nominee to purchase an Immediate Annuity plan from the company or the benefit could be completely withdrawn in lump sum.
Bonus – Simple reversionary bonuses are declared by the plan and added to the corpus from the third policy year. The bonus is paid on vesting, death or surrender. A Terminal Bonus may also be declared under the plan payable on vesting on death.
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 commuted benefits received would be taxable under Section 10(10A) of the Income Tax Act.
Eligibility Criteria of MetLife Retirement Savings Plan
The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
Entry age (Last Birthday)
PPT 10 years - 64 years
Other PPTs – 65 years
Maturity or Vesting Age (Last Birthday)
Regular Pay or PPT 5 years – 10 years
PPT 10 years – 11 years
Single Pay – 5 years
Single Pay – 20 years
Other PPTs – 30 years
Premium payable annually
Regular Pay – Rs.7044
PPT 10 years – Rs.13,128
PPT 5 years – Rs.35,990
Single Pay – Rs.262,250
Regular Premium or PPT 10 years – Rs.3 lakhs
PPT 5 years or Single Pay – Rs.5 lakhs
Premium Paying Term (PPT)
5 or 10 years or Single Pay or equal to plan tenure
Premium payment mode
Monthly, half-yearly, quarterly or annually or Single Pay
Additional Benefits of MetLife Retirement Savings 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, quarterly 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 (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 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 MetLife Retirement Savings Plan
If the policyholder commits suicide within a year of policy issuance 80% of the premiums paid would be returned and no death benefit would be payable
If suicide is committed within a year of policy revival, higher of 80% of the premiums paid till death or the Surrender Value acquired would be paid provided the policy is in force
Non-Payment of premium in MetLife Retirement Savings Plan
Premiums under a limited premium plan of 5 years have to be paid for at least 2 years. For regular pay plans and limited pay plans of 10 years, premiums should be paid for at least 3 years. If these compulsory premiums are not paid the policy would lapse without accruing any benefits if it is not revived within the revival period. After the first 2 or 3 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 or 3 full years’ premium has been paid under the 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. Future bonuses would not accrue under the plan. The following benefits would be paid on a paid-up policy:
Death Benefit –The Reduced Paid-up Sum Assured and any accrued bonuses would be paid as death benefit.
Reduced Paid-up Sum Assured = Death Sum Assured * (number of premiums paid under the plan/total number of premiums payable)
The nominee can either buy an Immediate Annuity plan or withdraw the death benefit in lump sum.
Vesting benefit – The vesting benefit would be the Reduced Paid-up Base Sum Assured and any accrued bonuses.
Reduced Paid-up Base Sum Assured = Assured * (number of premiums paid under the plan/total number of premiums payable)
The maturity benefit should be utilized to either buy an Immediate from the company. Any commutation of the benefit is allowed but the remainder benefit (2/3rd part) should be used to buy Immediate Annuity.
Surrendering the policy
Surrender is allowed only after the policy becomes paid-up, i.e. after3 or 2years’ premiums have been paid. 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 = a percentage of the total premiums paid and the discounted value of the accrued reversionary bonuses.
The SSV would be declared by the company based on its performance and would be calculated on the date of surrender.
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.