HDFC Life New Immediate Annuity Plan - Interest Rate and Benefits

The HDFC Life New Immediate Annuity Plan is a retirement income plan that provides guaranteed lifelong income in exchange for a one-time lump-sum investment. Designed for retirees and individuals nearing retirement, it ensures financial stability through regular pension payouts. The plan offers multiple annuity options, including single-life and joint-life coverage, with or without return of purchase price.

Key Highlights

• Offers lifetime guaranteed income through diverse annuity options.
• Choice of payment frequency–monthly, quarterly, half-yearly or yearly.
• Higher annuity rates for larger purchase prices (above Rs. 2.5 lakh).
• Return of purchase price (ROP) available under specific variants.
• Eligible for tax deductions under Section 80C and exemptions under Section 10(10D).

HDFC Life New Immediate Annuity Plan Rate of Interest

The annuity rates for the HDFC Life New Immediate Annuity Plan depend on various factors. There are two popular variants of this plan: 

• The Life Annuity variant offers continuous annuity payments to the annuitant for life. After their death, the plan ceases. 
• The Life Annuity with Return of Purchase Price variant provides lifetime payments as well, but after the annuitant's death, the full benefit is passed on to their nominee.

The rates of return for HDFC Life New Immediate Annuity Plans in the case of both variants are given in the table below. 

HDFC Life New Immediate Annuity Plan Variants

This annuity plan offers two types of investment options. The details of these two annuity plans from HDFC Life New Immediate Annuity Plan are given below:

I. Single Life Annuity Options

This option is further divided into the following parts: 

1. Life Annuity

• The annuitant will receive a uniform rate of returns (annuity) as arrears in instalments for a lifetime. 
• After the annuitant’s death, the annuity payments will cease, and no further payments will be made.  

2. Life Annuity with Returns of Purchase Price

• The annuitant will receive a uniform rate of returns as arrears in instalments for a lifetime. 
• After the annuitant’s death, the annuity payments will stop, and the bank will pay the nominee the entire purchase price of this plan. 

3. Life Annuity with Guarantee Period

• The annuitant will receive the annuity returns as arrears for his/her lifetime or till the guarantee period, whichever comes later. 
• The annuitant can choose a guarantee period between 5, 10, 15 or 20 years. At the end of this period or the annuitant’s death, no further annuity payments will happen, and this plan will cease to exist.  

4. Life Annuity with 5% Escalation

• The annuitant will receive the annuity payments as arrears for their entire life. 
• The annuity payment will increase by 5% p.a. of the annuity amount that was there at inception. 
• The first increased annuity payment takes place one year after the first payment. 
• After the annuitant’s death, this plan will cease to exist, and no further payments will take place.  

5. Life Annuity on Return of Purchase Price in Cases of Critical Illness

• The annuitant will receive the returns as arrears at a uniform rate for the rest of their life. 
• In case the annuitant dies or is diagnosed with any of the 6 specified illnesses before 85 years, whichever occurs earlier, the annuity payments will stop. Instead, the annuitant or their nominee is eligible to receive the entire purchase price of this plan. The bank will disburse the purchase price in favour of the nominees in case of the death of the annuitant.  

6. Life Annuity in Return of Purchase Price in Parts

• The annuitant will receive the returns as arrears at a uniform rate for the rest of their life. 
• By 7 years, the annuitant will receive 30% of the purchase price on survival. 
• On the annuitant’s death after 7 years, this annuity plan will cease to exist, and the bank will pay the annuitant’s nominee 70% of the full purchase price.
• In case of the annuitant’s death within 7 years, the annuity plan will cease, and the bank will pay the annuitant’s nominee the entire purchase price.

7. Life Annuity with Return of Balance Purchase Price 

• The annuitant will receive an annuity at a uniform rate for his/her entire life till death. 
• In case of the annuitant’s death, the annuity payments will stop. Instead, the bank will pay the annuitant's nominee the purchase price after deducting all annuity instalments made before death. 

II. Joint Life Annuity Options

This option involves more than one annuitant as primary and secondary annuitants. The primary annuitant is the person whose events in life will affect the timing or payout as per the option’s contract. The secondary annuitant is the partner of the former whose presence will provide a second life to the contract. 

1. Joint Life Annuity with 50% Annuity to Secondary Annuitant 

• As long as the primary annuitant is alive, the plan will keep paying the annuity at a uniform rate. 
• After the primary annuitant’s death, the secondary annuitant will receive 50% of the annuity throughout their lifetime. 
• If the secondary annuitant dies before the primary annuitant, then the plan will pay an annuity till the lifetime of the primary annuitant. 
• After the death of both of the annuitants, the plan will cease to exist.  

2. Joint Life Annuity with 100% Annuity to Secondary Annuitant

• The plan will keep paying the annuity at a uniform rate as arrears till at least one of the two annuitants is alive. 
• After the death of the last surviving annuitant, the plan will cease to exist, and no more payables will be available. 
• On the primary annuitant’s death, the secondary annuitant will get 100% of the original annuity throughout their life. 
• If the secondary annuitant dies before the primary annuitant, the primary annuitant will keep receiving the payables throughout his/her entire lifetime.  

3. Joint Life Annuity with 50% Annuity to Secondary Annuitants and Return of Purchase Price

• As long as any one of the annuitants is alive, the plan will keep paying the annuity in arrears. 
• After the primary annuitant’s death, the secondary annuitant will receive 50% of the original annuity payments for their entire life. 
• After the last surviving annuitant’s death, 100% of the purchase price is paid to the nominee.   

4. Joint Life Annuity with 100% Annuity to Secondary Annuitants and Return of Purchase Price

• As long as any one of the annuitants is alive, the plan will keep paying the annuity in arrears. 
• After the primary annuitant’s death, the secondary annuitant will receive 100% of the original annuity payments for their entire life. 
• After the last surviving annuitant’s death, 100% of the purchase price is given to the nominee. 

HDFC Life New Immediate Annuity Plan Benefits

Listed below are the benefits of HDFC Life New Immediate Annuity Plan: 

• Lifetime Guaranteed Income: Ensures stable post-retirement cash flow.
• Customizable Options: Choice of annuity type and payout frequency.
• Return of Purchase Price: Protects capital for nominees or dependents.
• Higher Annuity for Larger Investments: Attractive rates for purchase prices above ₹2.5 lakh.
• Tax Benefits: Premiums qualify under Section 80C; payouts enjoy partial exemption under Section 10(10D).
• Joint Life Protection: Income continues for spouse after death of the primary annuitant.

HDFC Life New Immediate Annuity Plan Illustration

The table below showing the HDFC Life New Immediate Annuity Plan illustration will paint a clearer picture of how this plan works:

HDFC Life New Immediate Annuity Plan Taxability

The HDFC Life New Immediate Annuity Plan offers significant tax benefits under Section 80C and Section 10(10D) of the Income Tax Act.

Under Section 80C, taxpayers can claim deductions up to Rs. 1.5 lakh for premiums paid towards the annuity plan in a given year. Additionally, Section 10(10D) provides tax exemptions on maturity and death benefits received from the HDFC Life New Immediate Annuity Plan.

Final Word

The HDFC Life New Immediate Annuity Plan is a long-term retirement benefit investment. Before applying, it’s important to review the eligibility criteria and understand the terms and conditions of the plan. Doing so will help you make informed decisions and plan your finances effectively for the long term.

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