I had joined ICICI Lifestage Pension Plan in 2008. I have been paying the premium every year. The current fund value is ₹12 lakh. The policy will mature in 2018.
- After maturity, assuming I put the entire money in annuity, what will be monthly pension under the option of joint/last survivor without return of purchase amount?
- Is the pension amount fixed or is it variable?
- Is it better to discontinue the policy now and invest in some MF or continue for the remaining two years.
- T. Lal
Your ICICI Lifestage Pension Plan will mature in two years. The annuity amount is calculated as per the annuity rate prevailing at the time of vesting. The annuity rates are generally modest and they do not beat inflation.
Annuity rate is fixed. If the interest rates move up, you may not benefit from it. But then when the rates fall, your income won't fall with them. If you can take care of your investments, you may be able to earn better returns.
It will be better if you surrender the plan and take the fund value out. You can invest this lump sum in a fixed returns avenue like SCSS (current rate is 8.6 percent), monthly post office scheme, etc to fetch a regular income. If you do not require a regular income, you can consider investing it in a mix of debt and equity to earn better returns.
This article was originally published on May 11, 2016.
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