Turns a lump sum into an income you cannot outlive. Two halves: accumulation, where you build the corpus, and annuity, where you convert it into monthly income. The annuity rate you get on the day you convert matters more than twenty years of fund performance, and almost nobody is told that.
Illustrative figures until sourced from the insurer of record.
Guaranteed lifetime income
Cannot be outlived
Joint-life option
Continues to your spouse
Return of purchase price
Corpus back to nominee
Deferment
Higher rate if you start later
Immediate annuity, ₹1 Cr corpus, age 60, joint life
Premiums and claim-settlement ratios are illustrative until sourced from the insurer of record.
Jeevan Akshay VII
6.89% rateHighest rate available today and sovereign-backed. The default choice for most retirees, and usually the right one.
Systematic Pension
6.71% rateSlightly lower rate but allows a 3% annual escalation, which matters over a thirty-year retirement.
Saral Retirement
6.50% rateLowest of the three, with the simplest documentation and the fastest setup. Worth it only for convenience.
Read this before you buy.
- No inflation protection unless you bought an escalating annuity
- No surrender, no exit and no rate change once purchased
- Annuity income is fully taxable as salary
- A plain life annuity pays the nominee nothing at all
This is the one line where the payout is the product. What matters is not how a claim is handled, but what you irreversibly commit to on conversion day.
- 01
Accumulate
· working yearsThrough NPS, a pension plan or your own investments. The vehicle matters far less than the amount and the years.
- 02
Convert to an annuity
· at 60Compare every provider on the same day — rates differ materially. Once bought, the rate is fixed for life and cannot be changed.
- 03
Income is paid
· monthly, for lifeCredited monthly and taxed as salary income. It does not rise with inflation unless you specifically bought an escalating annuity.
- 04
Spouse or nominee
· on deathJoint-life continues to your spouse. Return-of-purchase-price returns the corpus to the nominee. Plain life annuity pays nothing — the money stops.
Buying an annuity from whoever managed your accumulation. Rates differ by up to 0.9% between providers on the same day — on ₹1 Cr that is ₹7,500 a month, for thirty years, for one afternoon of comparison.