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Aditya Birla Sun Life’s Empower Pension is a non-participating unit linked pension plant. It helps the individual to save for a financially secure future after retirement. ABSLI Empower Pension plan comes with a wide range of benefits and investment options. If you wish to avail this pension plan, you can choose the investment option according to your need and requirement, as it comes with flexible payment terms.
It is a Unit linked plan which means, the premium invested net of charges is allocated to a Fund Account where it enjoys market-related returns, thereby increasing the annuity payouts after the retirement.
Highlights of ABSLI Empower Pension Plan Review
- The premiums paid are invested in the market, which are linked to funds, earning attractive returns.
- The Smart Option available in the plan helps to automatically manage the investment portfolio by the company in a pre-specified manner.
- Three types of Guaranteed Additions are added to the fund value of the enhanced growth.
How does ABSLI Empower Pension Plan Work?
- You need to decide on the amount of premium you would like to pay, along with the mode of premium payment.
- You also need to decide the tenure of the plan and the risk profile – Aggressive, Moderate, or Conservative. Your premiums will be allocated based on the tenure & profile.
- As per the Smart Option, the amount of premium paid after deducting the allocation charge is invested. Under this option, the net premium is allocated to Maximizer Guaranteed and Income Advantage Fund. The company manages the investment in both the funds as per a pre-specified proportion over the policy tenure. The allocation rate would depend on the risk profile chosen and the tenure. Over the policy tenure, the allocation would be automatically shifted to less risky funds to protect the returns from market volatility.
- In case of the death of the policyholder during the tenure of the plan, the death benefit is paid to the nominee.
- When the tenure ends, the Vesting benefit is paid.
Key Features
| Type | Non-participating unit linked pension plan |
| Basis | Single |
| Coverage | In case, the insured passes away within the policy term, the nominee will be entitled to receive the benefits; he/she will be paid the guaranteed death benefit or fund value, whichever is higher. |
| Surrender Benefit | You, as the policyholder can surrender the policy at any time. There are three ways through which you can avail the surrender benefit if you surrender the policy after 5 years:
· Choose the single pay deferred pension plan from the plans available at the time of surrender · Commute to the allowed extent and choose to receive the balance as a regular income · Opt for an annuity income plan |
| Service Tax | Service taxes are applicable on the policy |
| Loans | No loans are available on this policy |
| Revival | The policy can be revived before two years from the date the policy has been discontinued. The charges for discontinuance are applicable on the discontinuance of the policy. |
| Tax Benefits | The policy qualifies for tax benefits under section 80CCC and section 10A of the Income Tax Act,1961. |
Eligibility
| Parameters | Min and Max |
| Minimum entry age | 25 years |
| Maximum entry age | 70 years |
| Accumulation period | 5 to 30 years |
| Basic premium | Minimum Rs. 18,000 per annum for annual payment
Minimum Rs. 24,000 per annum for semi-annual payment Minimum Rs. 30,000 per annum for quarterly payment Minimum Rs. 36,000 per annum for monthly payment |
| Premium payment term | Regular |
Benefits of BSLI Empower Pension Plan
Guaranteed Additions
Additional units will be added to your policy, which will benefit you one you opt for the policy.
| From the end of the policy year | Rate of addition |
| 6th year | 0.25% of the average Fund Value of the last 12 months |
| 11th year | 0.35% of the average Fund Value of the last 12 months |
| 16th year | 0.35% of the average Fund Value of the last 12 months |
Vesting Benefit
You will receive the benefit of the one that is higher out of i) Guaranteed Vesting Benefit or b) the Fund Value. The Guaranteed Vesting Benefit is assigned at the inception and varies by the chosen vesting date and risk profile.
The Vesting Benefit can be utilized in the following manner:
- By extending the accumulation phase
- By entering into single pay deferred pension plan
- By commuting up to 1/3rd of the Vesting benefit and receive the tax-free lump sum amount
- By entering into an income annuity phase
| Years to vesting | Aggressive risk | Moderate risk | Conservative risk |
| 5 years | – | – | 105% |
| 6-10 years | 101% | 106% | 112% |
| 11-15 years | 102% | 110% | 119% |
| 16-20 years | 103% | 114% | 126% |
| 21-25 years | 104% | 118% | 133% |
| 26-30 years | 105% | 122% | 140% |
Death Benefit
In case the policyholder dies while the policy is in effect, the company pays the higher amount of either of the following
- the Guaranteed Death Benefit which should be greater of 105% of all basic premiums paid or Accumulation of all basic premiums paid till date at a compounding guaranteed rate.
- Fund Value as on date of intimation of death to the nominee.
The guaranteed rate varies on the basis of the risk profile you choose at the time of selecting the plan.
Surrender Benefit
As policyholder, you can surrender the policy to the company anytime till vesting. During the first five years of the policy, the benefit on surrender will be according to the clause of Policy Discontinuance, mentioned in the brochure.
After 5 years, you can avail the surrender benefits in the following manner:
- Enter into single pay deferred pension plan
- Commute to the extent allowed and utilize the balance to receive a stream of regular income
- Enter into income annuity phase
Tax Benefits
BSLI Empower Pension Plan offers tax benefits under section 80CCC and Section 10A of Income Tax Act 1961, subject to fulfillment of the other conditions of the respective sections prescribed therein.
Additional Benefits
- Grace Period: You are allowed for a 30-day grace period for annual, half-yearly and quarterly payment of premium and 15 days for a monthly mode of premium payment.
- Free look Period: A free look period, which is also known as cooling off period of 15 days is granted to you after the policy issuance to review the term and conditions of the policy. In case, you do not agree to the term and conditions or are dissatisfied in any way, you can cancel the plan within this period. The premium paid would be refunded after deducting the relevant mortality charge, service tax and stamp duty, if any.
- Riders and top-up premiums are not offered in this plan.
Charges in BSLI Empower Pension Plan Review
BSLI being a ULIP plan has certain charges applicable as follows:
Premium Allocation Charges
Premium allocation charges are deducted on receipt of each premium before the premium is credited to the fund.
| Policy year | % of basic premium paid |
| 1 | 6% |
| 2 – 3 | 5.5% |
| 4 – 10 | 5% |
Policy Administration Charges
Here, you will be charged monthly Rs.20 as Policy Administration Charges during the first five years of the policy. The sixth year onwards, it would increase to Rs.25 per month, inflating every year at 5% per annum subject to a maximum of Rs.6000.
Fund Management Charges
Fund Management Charges depend on the type of fund you select and are charged on a daily basis. The charges usually applicable are Income Advantage Guaranteed at 1%, per annum and Maximizer Guaranteed at 1.35% per annum.
Miscellaneous Charges
You would be charged Rs.50 per transaction for any services rendered by the company. Also, these charges may increase subject to a maximum of Rs.500 per request.
Investment Guarantee Charge
As Investment Guarantee Charge 0.25% per annum of the total fund value and any top-up fund value would be charged from you. This charge may increase to a maximum of 0.50% per annum.
Discontinuance Charges
Discontinuance Charges are applicable if you decide to discontinue the premiums for the policy.
| Year of Discontinuance | Annual Premiums up to Rs.25,000 | Annual Premiums above Rs.25,000 |
| First Year | Lower of 20% of annual premium or Fund Value up to a maximum of Rs.3000 | Lower of 6% of annual premium or Fund Value up to a maximum of Rs.6000 |
| Second Year | Lower of 15% of annual premium or Fund Value up to a maximum of Rs.2000 | Lower of 4% of annual premium or Fund Value up to a maximum of Rs.5000 |
| Third Year | Lower of 10% of annual premium or Fund Value up to a maximum of Rs.1500 | Lower of 3% of annual premium or Fund Value up to a maximum of Rs.4000 |
| Fourth Year | Lower of 5% of annual premium or Fund Value up to a maximum of Rs.1000 | Lower of 2% of annual premium or Fund Value up to a maximum of Rs.2000 |
| Fifth Year Onwards | Nil | Nil |
FAQs
- How is the service tax charged under BSLI?
Being a ULIP product, service tax is charged on all the charges that are levied on your policy. In case of traditional endowment, term insurance products, and health service tax is charged on total premium paid by you.
- If I need to make a death claim that comes under a plan, what documents will I need to submit?
If the insured dies who has a plan with cover, you need to submit the valid documents of the policy, claim intimation form, along with documents of life insured – address proof, ID proof, passbook, and medical records.
- If I need to make a death claim that comes under a plan without cover, what documents will I need to submit?
If the life insured dies who has a plan without cover, you will need to submit policy documents, claim intimation form, documents of life insured including address proof, photo, and ID proof, medical records, and passbook.