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Edelweiss Tokio Life – Easy Pension Plan

What is the Plan all About?

Edelweiss Tokio Life – Easy Pension is a unit linked, non-participating pension plan that helps you to lead a financially stable and happy retirement life. This retirement solution offers you an option to receive a part of your fund value as lump sum amount at your chosen vesting age and the remaining fund value can be invested to purchase an annuity for regular income after your retirement.

What are the Key Features?

  • Enjoy vesting benefits
  • Guaranteed Loyalty Additions to boost returns
  • Choice of risk strategy for allocation of funds
  • Automatic re-allocation of your money
  • Low premium allocation charge
  • Flexible policy term & premium paying terms
  • Multiple premium paying options
  • Simple process to buy plan
  • Tax benefits

What are the Fund Investment Options?

This policy offers following fund options.

  • Pension Growth Fund
  • Pension Secure Fund

You will have the option to choose, ‘aggressive’ or ‘conservative’ risk strategy depending on which, your allocation towards the ‘Pension Growth Fund’ and ‘Pension Secure Fund’ will vary. Risk strategy chosen at policy inception cannot be changed thereafter.

What are the Plan Benefits?

Death Benefit

    In case of death of the life insured during the policy term, the higher of Fund Value, Assured Benefit or 105% of total premiums paid till the date of death.

    Here, Assured Benefit is 101% of total premiums paid till death.

    The nominee can use the death benefit through the following two ways:

    • Utilize the death benefit or any part of it to purchase an annuity at the then prevailing annuity rate.
    • Withdraw the entire death benefit.

Guaranteed Vesting/Maturity Benefit

    On vesting, the higher of Fund Value at maturity or Assured Benefit is payable. Here, Assured Benefit is 101% of total premiums paid till maturity.

    The vesting benefit can be utilized in the following three ways.

    • Commute to the extent allowed under Income Tax Act and utilize the balance amount to purchase immediate annuity at the then prevailing annuity rate.
    • Utilize the entire proceeds to purchase a single premium deferred pension product.
    • Extend the deferment period/accumulation period within the same policy.

Commutation Benefit

    You have the option to take up to 1/3rd of the benefit as tax-free cash lump sum as per the current income tax regulations.

Deferment of Vesting Benefits

    There is an option to extend the deferment of vesting date, provided the life insured is aged below 55 years.

Guaranteed Loyalty Additions

    For annual premiums of Rs. 45,000 & above, Guaranteed Loyalty Additions is a percentage of the average of last 60 months fund value. It is added at the end of the 10th policy year and every 5th policy year thereafter till maturity/vesting of the policy. For Single Pay, it is 4% and for Limited and Regular Pay, it is 4.75%

    Guaranteed Loyalty Additions are added to the Fund Value on the last day of the respective policy year and once added, it becomes a part of the fund value.

Single Pay Enhancers

    For Single Pay policies, Guaranteed Enhancers equal to 0.25% of last 12 months’ average Fund Value, are added at the end of every policy year from 6th policy year onwards till the policy maturity.

    Single Pay Enhancers are added to the Fund Value on the last day of the respective policy year and it is applicable only for Single Pay policies.

Non-negative Claw-Back Addition

    You can avail non-negative claw-back addition, if the reduction in yield at the time of exit is higher than the maximum reduction in yield allowed at that time. The claw-back addition, if required, are added to the fund value that ensures compliance with the regulatory criteria of maximum reduction in yield from 5th policy year onwards.

Switching/Premium Redirection

    Switching & premium re-direction is not applicable under this plan.

Bonus

    No bonus is applicable, as it is a non-participating pension plan.

Loan Benefit

    No policy loan is available under this plan.

Surrender Value

    Upon surrendering the policy with-in the lock-in period of 5 years, the fund value after deducting Policy Discontinuance Charges are credited to the Discontinued Policy Pension Fund. The proceeds of the discontinued policy along with the returns generated due to minimum guaranteed interest rate of 4% per annum is payable to the policyholder only upon completion of the lock in period.

    Upon surrendering the policy after the completion of the lock-in period of 5 years, the fund value as on the date of termination is payable.

Who can Buy the Plan?

Factor Minimum Maximum
Age (as on last birthday) 18 Years 75 Years
Age at Vesting 45 Years 85 Years
Policy Term 10 To 67 Years -
Premium Paying Term (PPT) Single Pay, Limited Pay (5 Pay To Policy Term – 5), Regular Pay -
Premium Paying Mode Single Pay, Annually, Semi Annually, Quarterly & Monthly -
Premium Amount For Single Premium Payment: Rs 45,000 For Regular/Limited Premium Payment: Rs 15,000 (annually), Rs 8,000 (semi Annually), Rs 4,000 (quarterly), Rs 1,500 (monthly) -
Freelook Period 15 Days/30 Days (for Distance Marketing Channel) From The Receipt Of The Policy -
Grace Period 30 Days (15 Days For Monthly Mode) -
Plan Type Offline -

Is any Rider Available with this Plan?

No rider can be opted under this plan.

What are the Plan Charges?

Premium Allocation Charge: For Limited/Regular Premium pay policies, when annual premium is less than Rs 5 Lacs, the Premium Allocation Charge is 3%/2% for 1st policy year/2nd to 5th policy year, respectively. When annual premium is equal to or more than Rs 5 Lacs, the Premium Allocation Charge is 2% for 1st to 5th policy year, respectively.

For Single Premium pay policies, when single premium is less than Rs 5 Lacs, the Premium Allocation Charge is 2% during the 1st policy year and when single premium is equal to or more than Rs 5 Lacs, the Premium Allocation Charge is 1% levied during the 1st policy year.

Policy Administration Charge: For Limited/Regular Premium pay policies, the policy administration charge is 2.5% p.a of the regular premium, subject to a maximum of Rs 400 per month is levied on the first business day of each policy month. For Single Premium pay policies, it is 1% p.a of the single premium, subject to a maximum of Rs 200 per month.

Fund Management Charges: The annual fund management charge for Pension Growth Fund is 1.35%, Pension Secure Fund is 1.25%, Discontinuance Policy Pension Fund is 0.50%.

Guarantee Charge: There will be additional charges of 0.35% p.a and 0.10% p.a towards the investment guarantee for Pension Growth Fund and Pension Secure Fund respectively.

Mortality Charge: Mortality charges are recovered on a monthly basis, by cancellation of appropriate number of units. Monthly Mortality Charges = Sum at Risk * (Annual Mortality rate/12).

Miscellaneous Charges: A Miscellaneous charge of Rs 100 is deducted for any alterations made under the policy. Charges are recovered by cancellation of units. The Miscellaneous charge shall not be more than Rs 500 per annum, subject to prior approval from IRDAI.

Taxes: The service tax and cess is levied for charges applicable under this plan.

Is the Plan, eligible for Tax Benefit?

Tax benefits under this policy are available, as per the prevailing Income Tax laws.

How the Plan Works?

Romesh at 30 years of age, wants to accumulate corpus so he can receive a lump sum amount at vesting and can also get a regular income after his retirement. He thus chooses to buy Edelweiss Tokio Life – Easy Pension with the policy term and premium payment term of 30 years with the annual premium of Rs 50,000.

Scenario A: Romesh Survives till Vesting

At vesting, the higher of Fund Value at maturity or Assured Benefit is payable. He has the option to commute the benefits, utilize the proceeds to purchase a single premium deferred pension plan or extend the deferment period.

Scenario B: Romesh dies within the Policy Term

In case of demise of Romesh with-in the policy term, the higher of Fund Value, Assured Benefit or 105% of total premiums paid till the date of death. The nominee also has the option to utilize the death benefit to purchase an annuity or to withdraw the entire death benefit.