SUD Life Immediate Annuity Plus Plan: Good or Bad? An Insightful Review
Is the SUD Life Immediate Annuity Plus Plan the key to lifelong financial security, or just another plan with hidden limitations?
Is this plan the ideal choice for a worry-free retirement, or should you explore other investment options first?
Can the SUD Life Immediate Annuity Plus Plan really safeguard your future, or is it simply locking up your money with limited flexibility?
This review explores the plan’s annuity options and evaluates how effective they are in meeting retirement needs.
What is the SUD Life Immediate Annuity Plus?
What are the features of the SUD Life Immediate Annuity Plus?
What are the plan options of the SUD Life Immediate Annuity Plus?
What are the benefits of the SUD Life Immediate Annuity Plus?
Free Look Period for the SUD Life Immediate Annuity Plus
Surrendering the SUD Life Immediate Annuity Plus
What are the advantages of the SUD Life Immediate Annuity Plus?
What are the disadvantages of the SUD Life Immediate Annuity Plus?
Research Methodology of SUD Life Immediate Annuity Plus
Benefit Illustration – IRR Analysis of SUD Life Immediate Annuity Plus
SUD Life Immediate Annuity Plus Vs. Other Investment
SUD Life Immediate Annuity Plus Vs. Fixed-Income Investments
SUD Life Immediate Annuity Plus Vs. Inflation-Adjusted Income
Final Verdict on SUD Life Immediate Annuity Plan
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.
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. |
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
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).
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”.
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”.
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.
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:
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
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.
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.
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:
| 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 |
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.
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 | ||||
| Opening Balance | Yearly withdrawal | Closing Balance | 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:
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.
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.
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