SUD Life Immediate Annuity Plus Plan: Good or Bad? An Insightful Review

SUD Life Immediate Annuity Plus is a non-linked, non-participating immediate annuity plan with 3 plan options – plan option A, plan option B and plan option C. It assures you a regular stream of income throughout your life.

What are the features of the SUD Life Immediate Annuity Plus?

Multiple Annuity Choices: Pick from three plan options – A, B, or C.
One-Time Payment: Pay a single premium to activate the plan.
Assured Income: Get a guaranteed fixed payout based on your chosen option.
Flexible Payout Modes: Choose to receive income monthly, quarterly, half-yearly, or annually.

What are the plan options of the SUD Life Immediate Annuity Plus?

Plan option A

Choose this option if you want to purchase an annuity either from your savings or from the SUD Life Immediate Annuity Plus Plan policy proceeds of any deferred pension plan/national pension scheme issued by SUD Life. Plan option A has nine annuity options:

Annuity Options	Annuity Name	Description
Annuity Option 1	Life Annuity	Life Annuity
Annuity Option 2	Life Annuity with Return of Purchase Price	Life Annuity with Return of Purchase Price (excluding taxes, if any) on death of the Annuitant.
Annuity Option 3	Increasing Life Annuity with Return of Purchase Price	Life Annuity increasing every year by 5% (Simple Rate of Interest) with Return of Purchase Price (excluding taxes, if any) on death of the Annuitant.
Annuity Option 4	Joint Life Annuity (50%)	Joint Life Annuity with 50% of the Life Annuity payable to the Secondary Annuitant (Spouse) on the death of the Primary Annuitant.
Annuity Option 5	Joint Life Annuity (100%)	Joint Life Annuity with 100% of Life Annuity payable to the Secondary Annuitant (Spouse) on the death of the Primary Annuitant.
Annuity Option 6	Joint Life Annuity (100%) with Return of Purchase Price	Joint Life Annuity with 100% of Life Annuity payable to the Secondary Annuitant (Spouse) on death of the Primary Annuitant and Return of Purchase Price on death of the last survivor.
Annuity Option 7	Annuity certain for 10 years	Annuity certain for 10 years and for life thereafter.
Annuity Option 8	Annuity certain for 15 years	Annuity certain for 15 years and for life thereafter.
Annuity Option 9	Annuity certain for 20 years	Annuity certain for 20 years and for life thereafter.

Plan Option B

It helps you get a regular income post your retirement simply by liquidising the home equity.

You (Annuitant) have to mortgage your home through the Reverse Mortgage Loan facility with an approved bank/lending organisation as mentioned in the Gazette of India, to get a lump sum as loan proceeds, while continuing to live in your home all throughout your life.

With this lump sum (purchase price), an annuity can be purchased under Plan Option B of SUD Life Immediate Annuity Plus. The annuity amount will depend on your age, the purchase price, the annuity option and the frequency/mode of annuity payment.

Plan Option B has two Annuity Options:

Annuity Option 2 – Life Annuity with Return of Purchase Price

Annuity Option 6 – Joint Life Annuity (100%) with Return of Purchase Price

Plan Option C

Default Option for NPS subscribers only: The annuity benefits would be payable in accordance with the regulations as prescribed by the Pension Fund Regulatory and Development Authority (PFRDA).

What are the benefits of the SUD Life Immediate Annuity Plus?

Survival Benefit

Benefits Under Plan Option A:

Annuity will be paid as per the option chosen by you as long as the annuitant(s) is/are alive or till the end of a certain period (for annuity options: 7, 8 and 9), whichever is later.

Benefits Under Plan Option B:

Annuity will be paid as long as the annuitant(s) is/are alive.

Benefits Under Plan Option C:

Annuity will be paid as per the Annuity Option 6 “Joint Life Annuity (100%) with Return of Purchase Price”. In case the subscriber does not have a spouse, the annuity benefit will be payable for the life of the subscriber as per the Annuity Option 2 “Life Annuity with Return of Purchase Price”.

Death Benefit

Benefit will be paid on the death of the annuitant(s), depending on the annuity option chosen. The following table gives the benefits under each annuity option specified above.

Benefits Under Plan Option A:

Annuity Options	Death Benefit
1	No death benefit payable.
2	100% of the Purchase Price (excluding taxes, if any) would be paid immediately to your nominee/ beneficiary.
3	100% of the Purchase Price (excluding taxes, if any) would be payable to your nominee/ beneficiary.
4	No death benefit payable, 50% of annuity amount chosen originally, continues to be paid to the secondary annuitant (spouse) throughout his/her lifetime.
5	No death benefit payable, 100% of annuity amount chosen originally, continues to be paid to the secondary annuitant (spouse)* throughout his/her lifetime.
6	100% of the annuity amount chosen originally continues to be paid to the secondary annuitant (spouse) throughout his/her lifetime. 100% of the Purchase Price (excluding taxes, if any) would be payable on the death of the last survivor.
7	No death benefit payable. In case of death before completion of 10 years from inception, annuity is paid to your nominee/beneficiary for the balance period, till 10 years is completed from inception.
8	No death benefit payable. In case of death before completion of 15 years from inception, annuity is paid to your nominee/beneficiary for the balance period, till 15 years is completed from inception.
9	No death benefit payable. In case of death before completion of 20 years from inception, annuity is paid to your nominee/beneficiary for the balance period, till 20 years is completed from inception.

Benefits Under Plan Option B:

Annuity Option 2 – 100% of the Purchase Price (excluding taxes, if any) would be paid immediately

Annuity Option 6 – 100% of the annuity amount chosen originally continues to be paid to the secondary annuitant (spouse) throughout his/her lifetime. 100% of the Purchase Price (excluding taxes, if any) would be payable on the death of the last survivor

Benefits Under Plan Option C:

The default option would be the annuity benefit payable for the life of the subscriber and his/her spouse as per the Annuity Option 6 “Joint Life Annuity (100%) with Return of Purchase Price”.

In case the subscriber does not have a spouse, the annuity benefit will be payable for the life of the subscriber as per the Annuity Option 2 “Life Annuity with Return of Purchase Price”.

Free Look Period for the SUD Life Immediate Annuity Plus

The Annuitant has a period of 15 (Fifteen) days or 30 (Thirty) days (if this Policy has been acquired through Distance Marketing) from the date of the receipt of this Policy to review the terms and conditions of this Policy.

If the Annuitant disagrees with any of those terms or conditions, then the Annuitant has an option to return the SUD Life Immediate Annuity Plus Plan Policy.

Surrendering the SUD Life Immediate Annuity Plus

Plan options A and C:

Surrender Benefit is available only for Annuity Option 2, Annuity Option 3 and Annuity Option 6 on the occurrence of the specified events as mentioned below: Under Plan Option A, surrender benefit will be paid on the following events:

If Annuity Option 2 or Annuity Option 3 is chosen, then on the Annuitant diagnosed with any one of the Critical Illnesses
If Annuity Option 6 is chosen, then when both annuitants or the last surviving Annuitant is diagnosed with any one of the Critical Illnesses

Plan option B:

Under Plan Option B, Surrender Benefit will be available as defined below:

If Annuity Option 2 is chosen, then on the Annuitant diagnosed with any one of the Critical Illnesses

If Annuity Option 6 is chosen, then both annuitants or the last surviving Annuitant diagnosed with any one of the Critical Illnesses

If Annuity Option 2 or Annuity Option 6 is chosen, then on complete foreclosure of the Reverse Mortgage Loan

What are the advantages of the SUD Life Immediate Annuity Plus?

One-Time, Hassle-Free Investment: Secure your plan with a single premium payment.
Guaranteed Post-Retirement Income: Enjoy assured annuity payouts throughout your retirement years.

What are the disadvantages of the SUD Life Immediate Annuity Plus?

Fixed Annuity: The payout remains the same for life, with no adjustment for inflation.
Taxable Income: Annuity payments are fully taxable as per your income slab.
Limited Surrender Facility: Surrender is permitted only under select annuity options.

Research Methodology of SUD Life Immediate Annuity Plus

The SUD Life Immediate Annuity Plus Plan provides multiple annuity choices, such as single or joint annuities and fixed or increasing annuities. In exchange for a lump-sum investment, you receive a lifelong annuity.

Importantly, the annuity amount is locked at the time of purchase and remains unaffected by future changes in economic interest rates.

Benefit Illustration – IRR Analysis of SUD Life Immediate Annuity Plus

To understand the returns, let’s evaluate the Internal Rate of Return (IRR) using the SUD Life Immediate Annuity Plus Plan policy brochure data. A 60-year-old male invests ₹5 lakhs in Option 2: Life Annuity with Return of Purchase Price, choosing annual payouts.

Male	60 years
Purchase Price	₹ 5 Lakhs
Life Expectancy	85 years
Annuity (per annum)	₹ 28,915

Here, we assume a life expectancy of 85 years. The annuity begins immediately, paying ₹28,915 per year. At age 85, the purchase price is refunded to the nominee. Based on these cash flows, the IRR works out to 5.67% as per the SUD Life Immediate Annuity Plus Plan maturity calculator.

Age	Option 2: Life Annuity with Return of Purchase Price
60	-5,00,000
61	28,915
62	28,915
63	28,915
64	28,915
65	28,915
66	28,915
67	28,915
68	28,915
69	28,915
70	28,915
71	28,915
72	28,915
73	28,915
74	28,915
75	28,915
76	28,915
77	28,915
78	28,915
79	28,915
80	28,915
81	28,915
82	28,915
83	28,915
84	28,915
85	5,00,000

IRR	5.67%

While this plan ensures a predictable income stream in retirement, it has notable drawbacks. The invested capital remains locked, limiting liquidity, and the annuity payout stays fixed, leaving you exposed to inflation.

The SUD Life Immediate Annuity Plus Plan provides stability but delivers modest returns, with limited flexibility and no inflation protection—making it less effective for long-term retirement planning.

SUD Life Immediate Annuity Plus Vs. Other Investment

For retirees seeking a steady income stream, there are alternatives to annuity plans that offer better returns and greater liquidity than the SUD Life Immediate Annuity Plus Plan. Let’s look at some fixed-income options:

SUD Life Immediate Annuity Plus Vs. Fixed-Income Investments

Investment Option	Expected Returns
Bank Fixed Deposit (FD)	6-7% annually
Senior Citizen Savings Scheme (SCSS)	8.20% annually
RBI Floating Rate Savings Bond	8.05% annually

Bank Fixed Deposits (FDs) – Safe investment with a guaranteed interest rate for a fixed tenure.
Senior Citizen Savings Scheme (SCSS) – Government-backed scheme tailored for seniors, ensuring regular interest payouts.
RBI Floating Rate Bonds – Bonds issued by the RBI with interest linked to the NSC rate, offering half-yearly payouts.

These instruments provide regular cash flows similar to annuities but with the added advantage of liquidity and flexibility. However, like annuity plans, they do not protect against inflation. To address this, blending equity with fixed-income instruments can help enhance returns and safeguard purchasing power.

SUD Life Immediate Annuity Plus Vs. Inflation-Adjusted Income

A Scenario: Blending Equity and Debt

Let’s revisit the earlier example of a ₹5 lakh corpus:

Equity Allocation – ₹3 lakhs (assumed 12% return) for long-term growth.

Debt Allocation – ₹2 lakhs (assumed 6% return) for stability and regular income.

Initial Annual Withdrawal – ₹28,915, with a 6% increase every five years to counter inflation.

Portfolio Rebalancing – every five years, moving gains from equity to debt.

Full Debt Shift by Age 71, reducing exposure to market volatility in later years.

Age	Equity Portion			Shift from Equity to Debt	Debt Portion
Age	Opening Balance	Yearly withdrawal	Closing Balance	Shift from Equity to Debt	Opening Balance	Yearly withdrawal	Closing Balance
61	3,00,000	0	3,36,000	0	2,00,000	28,915	1,81,350
62	3,36,000	0	3,76,320	0	1,81,350	28,915	1,61,581
63	3,76,320	0	4,21,478	0	1,61,581	28,915	1,40,626
64	4,21,478	0	4,72,056	0	1,40,626	28,915	1,18,414
65	4,72,056	0	5,28,703	0	1,18,414	28,915	94,869
66	5,28,703	3,00,000	2,56,147	3,00,000	3,94,869	30,650	3,86,072
67	2,56,147	0	2,86,884	0	3,86,072	30,650	3,76,747
68	2,86,884	0	3,21,311	0	3,76,747	30,650	3,66,863
69	3,21,311	0	3,59,868	0	3,66,863	30,650	3,56,386
70	3,59,868	0	4,03,052	0	3,56,386	30,650	3,45,281
71	4,03,052	4,03,052	0	4,03,052	7,48,333	32,489	7,58,794
72	0	0	0	0	7,58,794	32,489	7,69,884
73	0	0	0	0	7,69,884	32,489	7,81,638
74	0	0	0	0	7,81,638	32,489	7,94,099
75	0	0	0	0	7,94,099	32,489	8,07,306
76	0	0	0	0	8,07,306	34,438	8,19,240
77	0	0	0	0	8,19,240	34,438	8,31,890
78	0	0	0	0	8,31,890	34,438	8,45,299
79	0	0	0	0	8,45,299	34,438	8,59,512
80					8,59,512	34,438	8,74,579
81					8,74,579	36,505	8,88,358
82					8,88,358	36,505	9,02,965
83					9,02,965	36,505	9,18,448
84					9,18,448	36,505	9,34,860
85					9,34,860	36,505	9,52,257

This approach leaves a surplus corpus of ₹9.34 lakhs, compared to just the ₹5 lakh return of purchase price from the SUD Life Immediate Annuity Plus Plan. In addition, it provides:

Inflation-adjusted withdrawals
Flexibility in investment choices
A sustainable corpus beyond your lifetime

A 60:40 equity-to-debt strategy, combined with periodic rebalancing, can deliver steady income, protect against inflation, and build wealth that outlives you.

Adjustments can always be made depending on your risk appetite and financial goals, making this approach a more flexible and rewarding retirement plan than traditional annuities.

Final Verdict on SUD Life Immediate Annuity Plan

The SUD Life Immediate Annuity Plus Plan promises a steady lifetime income with options such as return or no return of premium and single or joint life coverage.

It also allows the utilisation of a home mortgage amount for purchase, and can be chosen by NPS subscribers. However, these features come with a limitation—only select annuity options (Options 2 and 6) are available, which restricts flexibility for investors.

A closer look at the numbers shows that the returns are below average. While the assurance of lifelong income may sound appealing, it should not be the only factor in making a decision and it also has a high agent commission.

In fact, the IRR often trails behind returns offered by traditional debt instruments, making this plan less suitable for those aiming to preserve and grow their retirement corpus.

Key Limitations

No Liquidity: The invested amount remains locked.

Fixed Payouts: Annuity income is not inflation-adjusted, eroding real value over time.

Lower Returns: Subpar compared to other fixed-income instruments.

To safeguard against inflation, incorporating equity allocation into your portfolio becomes crucial. As discussed earlier, diversifying between equity and debt and rebalancing periodically—based on your risk tolerance—can provide both inflation-adjusted income and financial security.

Retirement planning is not one-size-fits-all. Instead of relying solely on annuity products like the SUD Life Immediate Annuity Plus Plan, consider a customised retirement strategy tailored to your goals, risk appetite, and income needs.

Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?

Consulting a Certified Financial Planner can help you design a plan that balances stability with growth, ensuring peace of mind in retirement.

SUD Life Immediate Annuity Plus Plan: Good or Bad? An Insightful Review

Table of Contents

What is the SUD Life Immediate Annuity Plus?

What are the features of the SUD Life Immediate Annuity Plus?