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Getting a continuous source of regular income is a big concern for people after retirement. It is advisable to create a corpus for the retirement age, instead of depending on lifetime savings for routine expenses during old age. Any emergency expenses may suddenly wipe away the saving, leaving you helpless for regular earnings in future years. Hence, it is necessary to have a pension plan that continues to give you regular earning in all weathers. Max Life Forever Young Pension Plan is one such plan that can help create savings for retirement.
Why MAX Life Forever Young Pension Plan
Max Life Forever Young Pension Plan is a long-term policy. The efficient use of equity market and long-term tenure makes the difference in the return when it comes to reaping the fruits of investment. Your Max Life Forever Young Pension Plan allows you to invest in small installments initially, keeping the window open for top-up premium as per your comfort in future. Depending on your risk profile, the plan invests in the right mix of equity and debt, maximizing your pension gains and protecting your hard-earned money.
Eligibility
| Entry Age |
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| Maturity Age |
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| Policy Term | Minimum: 10 years |
| Premium Payment/Tenure | Minimum: Rs 25,000/Annually, half-yearly, quarterly, monthly. Option of single premium payment also available. |
What is the Premium Payment Method in Max Life Forever Young Pension Plan?
- This plan gives you complete flexibility to choose the premium method.
- You can make a single payment or multiple payments.
- At a later age, you can also make a top-up premium payment.
- The minimum yearly payment is Rs. 25,000. However, the company gives you options to make monthly, quarterly, half-yearly or yearly payment option to suit your budget.
- In case of a single premium option, the minimum payment is Rs.1 lakh.
- There is no limit of maximum premium payment. Hence you can choose maximum premium for yourself to enhance your pension income in the future years.
Where Will My Money Be Invested?
Max Life Forever Young Pension Plan gives two choices to invest your money keeping in mind your risk appetite.
For aggressive investors, the money is invested in the plan called “Pension Maximizer Fund.” The fund invests money into government bonds, corporate debts and equity. The fund has autonomy to invest up to 60% amount into equity to give you a better return of the fund. Given long-term duration, the fund has every opportunity to earn a higher return.
For risk-averse investors, the money is invested in the plan called “Pension Preserver Fund.” In this case, the fund invests maximum 35% amount into equity, and the balance amount is invested in government bonds, corporate debt funds, and money market instruments. Because of its lowest exposure to equity, the downside risk is very low in this pension fund. You can expect the return equivalent to debt market return or slightly higher in this option over the long run (on your vesting benefit).
Benefits of Max Life Forever Young Pension Plan
Vesting Benefit
Although your overall vesting benefit largely depends on the performance of the fund, your minimum benefit is guaranteed to protect your total premium paid amount. You will be paid higher of the two: Fund value or minimum guaranteed vesting benefit.
Your minimum guaranteed vesting benefit is 101% of the total premium paid (including top-up premium, if any), in case you opt for Pension Maximiser Fund Option for the investment of your premium.
The minimum guaranteed vesting benefit is 110% of the total premium paid (including top-up premium, if any), in case you opt for Pension Preserver Fund Option for the investment of your premium.
Guaranteed Loyalty Addition
If you continue to pay your policy premium regularly for 10 years, you shall be eligible to get guaranteed loyalty addition equivalent to 0.5% per year from the eleventh year inwards. There is also an increment in percentage addition at the rate of absolute 0.02% every year. The guaranteed loyalty addition is also eligible in case of revival of the policy, which is based on valuation at revival.
Extension of Accumulation Period
If your age is less than 55 years on vesting, you are allowed to extend the accumulation period of the policy. To do so, you have to give a written notice to the insurance company at least three months before the vesting date of your policy. Such option enhances your chance to avail higher pension income in later years.
Death Benefit
Your nominee will receive 105% of the amount of premium paid, or fund value, whichever is higher. The nominee can utilize the fund in one of the following ways:
- He or she can request to withdraw entire policy proceeds and utilize the same as per discretion.
- He or she can opt to buy the annuity from complete amount to avail monthly pension income.
- He or she can choose to withdraw partial amount as lump sum amount and avail the annuity for the balance amount.
If you have chosen Max Life Partner Care Rider, your spouse shall be eligible to guaranteed retirement benefit on the unfortunate demise of the life assured.
Surrender Value of the Policy
It is advisable to pay regular premium till the end of the term of the policy to reap desired pension income benefit. However, there may be a situation when you may not be able to continue the policy. Below is the overview of the discontinuation charges in case you decide to surrender the policy within the first five years.
| Year of Discontinuation | Discontinuation charges as % of Premium Paid | Discontinuation charges as % of Fund Value | Maximum Discontinuation charge |
| 1st Year | 6% | 6% | Rs. 6000 |
| 2nd Year | 4% | 4% | Rs. 5000 |
| 3rd Year | 3% | 3% | Rs. 4000 |
| 4th Year | 2% | 2% | Rs. 2000 |
The discontinuation charge will be lower of the three:
(1) The amount mentioned as a percentage of premium paid
(2) The amount mentioned as a percentage of fund value and
(3) Maximum discontinuation charges
FAQs
Q1. How to buy Max Life Forever Young Pension Plan?
Ans. Buying the pension plan is extremely convenient and effortless if you chose the online mode of purchase. You will have the opportunity to read the terms and conditions of the plan. You can also use online insurance calculator to know exact numbers like premium payment, sum assured, pension amount and other similar aspects.
In case you are not comfortable with online mode of purchase, you can call the helpline number of Max Life; the executive will arrange the visit of the adviser at your place to discuss the right plan for you and then will collect the documents and premium from you.
Q2. Can I cancel the plan after purchasing it?
Ans. Max Life gives you “Free Look Period” of 15 days after your policy is issued. You can review your policy for a premium payment; riders opted, investment option, other terms and conditions, and every other aspect. In case of any query, you can raise it to the insurance company. The company will attempt to clarify your query or resolve it as far as possible. Still, if you are not satisfied with the resolution by the insurance company, you can request to cancel the policy within “Free Look Period.” Your entire money paid shall be refunded after the deduction of the nominal amount of stamp duty.
Q3. What are the rules to pay top-up premium?
Ans. Max Life allows the top-up a premium to encourage you to save more for your retirement age. The general rules for the top up premium are as below:
- The total top-up premium cannot exceed 150% of the basic premium.
- Maximum 12 top-up premium can be allowed during the policy term.
- A minimum top-up amount value is Rs. 1,000
- The top-up premium is added to the original fund selected at the beginning of the policy.
- The top-up premium is exempt from any surrender charge.
Q4. What is the income tax benefit of Max Life Forever Young Pension Plan?
Ans. The tax benefits are available at two stages of the plan – at the time of premium payment and on vesting or maturity.
The premium paid under this plan is eligible for tax benefits under Section 80CCC of the Income Tax Act 1961. On vesting, one-third of the vesting benefit can be withdrawn as computed value that is tax-free as per Section 10(10A) of the Income Tax Act 1961.
Income Tax rule may change in future and tax benefit is dependent on the overall financial profile of the individual. Hence, it is recommended to consult your Chartered Accountant for exact tax benefits.