SUD Life Saral Pension Plan: Good or Bad? A Detailed Review
Does the SUD Life Saral Pension Plan really guarantee peace of mind after retirement — or does it just offer the bare minimum?
Is the SUD Life Saral Pension Plan a smart fallback option under IRDAI’s standard guidelines — or simply a one-size-fits-all product with limited customization?
Can the SUD Life Saral Pension Plan keep pace with inflation — or will the real value of income steadily decline over the years?
Let’s explore its features, pros, cons, and a detailed illustration.
What is the SUD Life Saral Pension?
What are the features of the SUD Life Saral Pension Plan?
Who is eligible for the SUD Life Saral Pension Plan?
What are the annuity options in the SUD Life Saral Pension?
What are the benefits of the SUD Life Saral Pension Plan?
Free Look Period for the SUD Life Saral Pension Plan
Surrendering the SUD Life Saral Pension Plan
What are the advantages of the SUD Life Saral Pension Plan?
What are the disadvantages of the SUD Life Saral Pension Plan?
Research Methodology of SUD Life Saral Pension Plan
Benefit Illustration – IRR Analysis of SUD Life Saral Pension Plan
SUD Life Saral Pension Plan Vs. Other Investments
SUD Life Saral Pension Plan. Vs. Fixed-Income Investments
SUD Life Saral Pension Plan Vs. Inflation-Adjusted Income
Final Verdict on SUD Life Saral Pension Plan
SUD Life Saral Pension is a non-linked, non-participating individual immediate annuity plan. It has simple features and standard terms and conditions, which assure you a regular stream of income, all throughout your life.
| Parameter | Details |
| Entry Age | Minimum: 40 yearsMaximum: 80 years |
| Annuity Options | 1. Life Annuity with Return of Purchase Price (ROP)2. Joint Life Last Survivor Annuity with Return of 100% of Purchase Price (ROP) on death of the last survivor. |
| Minimum Annuity Amount | Yearly – 12,000Half-yearly – 6,000 Quarterly – 3,000 Monthly – 1,000 |
| Maximum Annuity Amount | No Limit |
| Minimum Purchase Price | Such that the minimum annuity amount can be paid |
| Maximum Purchase Price | No Limit |
| Premium paying term | Single Premium |
Annuity Options, once chosen by the primary annuitant, cannot be changed subsequently.
Annuity Option 1: Life Annuity with Return of 100% of Purchase Price (ROP).
Annuity Option 2: Joint Life Last Survivor Annuity with Return of 100% of Purchase Price (ROP) on death of the last survivor.
Option 1:
100% of the Purchase Price (excluding taxes, if any) would be paid immediately, to your nominee/beneficiary.
Option 2:
In case of Joint Life Annuity, after the death of the annuitant:
If the spouse is surviving, the spouse continues to receive the same amount of annuity for life till his/her death. Subsequently, on the death of the spouse, 100% Purchase Price shall be payable to the nominee/legal heirs.
However, if the spouse has pre-deceased the annuitant, then on the death of the annuitant, the Purchase Price shall be payable to the nominee/legal heirs.
Annuity will be paid, as per the annuity option chosen, as long as the annuitant(s) is/are alive.
Not Applicable
If you disagree with any of those terms or conditions in the policy, you have the option to return the SUD Life Saral Pension Plan policy within 30 days from the date of receipt of the policy document.
The policy can be surrendered at any time, after six months from the date of commencement, if the annuitant or the spouse or any of the children of the annuitant is diagnosed as suffering from any of the 20 Critical Illnesses, as specified in the SUD Life Saral Pension Plan policy brochure.
The SUD Life Saral Pension Plan is a fixed-return product, meaning the annuity rate is locked at the time of purchase and remains unaffected by future changes in interest rates. Let’s evaluate the plan with an example:
A 60-year-old male invests ₹5 lakhs under Option 1: Life Annuity with 100% Return of Purchase Price (ROP). He receives an annual annuity of ₹33,784.
At the age of 85 (assuming life expectancy), the nominee gets back the purchase price of ₹5 lakhs. Based on these cash flows, the Internal Rate of Return (IRR) works out to 6.64% as per the SUD Life Saral Pension Plan maturity calculator.
| Male | 60 years |
| Purchase Price | ₹ 5,00,000 |
| Annuity | ₹ 33,784 |
| Annuity Option | Option 1 |
| Returns | 6.64% |
| Age | Option 1: Life Annuity with Return of Purchase Price (ROP) |
| 60 | -5,00,000 |
| 61 | 33,784 |
| 62 | 33,784 |
| 63 | 33,784 |
| 64 | 33,784 |
| 65 | 33,784 |
| 66 | 33,784 |
| 67 | 33,784 |
| 68 | 33,784 |
| 69 | 33,784 |
| 70 | 33,784 |
| 71 | 33,784 |
| 72 | 33,784 |
| 73 | 33,784 |
| 74 | 33,784 |
| 75 | 33,784 |
| 76 | 33,784 |
| 77 | 33,784 |
| 78 | 33,784 |
| 79 | 33,784 |
| 80 | 33,784 |
| 81 | 33,784 |
| 82 | 33,784 |
| 83 | 33,784 |
| 84 | 33,784 |
| 85 | 5,00,000 |
| IRR | 6.64% |
At first glance, this return may seem attractive for a senior citizen. However, there are notable limitations:
Liquidity constraints: Once purchased, the funds remain locked. Surrender is permitted only under specified conditions, such as the diagnosis of critical illness. The corpus cannot be redirected to other goals or reinvested in better opportunities if interest rates rise.
Fixed annuity payouts: The annual annuity amount does not increase over time. With living costs rising every year, this fixed income may fall short of maintaining one’s lifestyle in retirement.
While the SUD Life Saral Pension Plan provides stability with a predictable return, it fails to address two critical aspects of retirement planning—liquidity and inflation-adjusted income.
There are several alternative investment options that retirees can consider for generating a regular income stream.
Unlike annuity plans, these options provide better liquidity and higher potential returns, making them more flexible for managing retirement funds.
Let us look at some fixed-income investment options for retirees, along with their expected returns. These returns are far higher than annuity plans.
| 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 and predictable, offering fixed interest payouts over a chosen tenure.
Senior Citizen Savings Scheme (SCSS): A government-backed option tailored for senior citizens, providing attractive interest rates with quarterly payouts.
RBI Floating Rate Bonds: Government-issued bonds with interest rates linked to the NSC (National Savings Certificate) rate, ensuring biannual income.
These instruments provide steady cash flow similar to the SUD Life Saral Pension Plan, but with better liquidity and generally higher returns. However, they still do not address a critical factor—inflation-adjusted income.
Inflation steadily erodes the purchasing power of money. Without an income that grows over time, retirees may struggle to sustain their lifestyle or cover unexpected expenses.
To address this, let’s consider an inflation-adjusted strategy using the same figures from the SUD Life Saral Pension Plan illustration.
The following illustration uses the same figures as the SUD Life Saral Pension Plan. With a retirement corpus of ₹5 lakhs and an initial annual withdrawal of ₹33,784 lakhs, the strategy is worked out to demonstrate potential outcomes.
Let’s assume that 60% of ₹5 lakhs, i.e., ₹3 lakhs, is invested in equity for wealth creation, while the remaining ₹2 lakhs is allocated to debt instruments for regular needs.
The equity investment is assumed to generate a return of 12%, and the debt investment yields 6%.
| 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 | – | 3,36,000 | – | 2,00,000 | 33,784 | 1,76,189 |
| 62 | 3,36,000 | – | 3,76,320 | – | 1,76,189 | 33,784 | 1,50,949 |
| 63 | 3,76,320 | – | 4,21,478 | – | 1,50,949 | 33,784 | 1,24,195 |
| 64 | 4,21,478 | – | 4,72,056 | – | 1,24,195 | 33,784 | 95,836 |
| 65 | 4,72,056 | – | 5,28,703 | – | 95,836 | 33,784 | 65,775 |
| 66 | 5,28,703 | 1,50,000 | 4,24,147 | 1,50,000 | 2,15,775 | 35,811 | 1,90,762 |
| 67 | 4,24,147 | – | 4,75,044 | – | 1,90,762 | 35,811 | 1,64,248 |
| 68 | 4,75,044 | – | 5,32,050 | – | 1,64,248 | 35,811 | 1,36,143 |
| 69 | 5,32,050 | – | 5,95,896 | – | 1,36,143 | 35,811 | 1,06,352 |
| 70 | 5,95,896 | – | 6,67,403 | – | 1,06,352 | 35,811 | 74,773 |
| 71 | 6,67,403 | 6,67,403 | -0 | 6,67,403 | 7,42,176 | 37,960 | 7,46,470 |
| 72 | -0 | – | -0 | – | 7,46,470 | 37,960 | 7,51,021 |
| 73 | -0 | – | -0 | – | 7,51,021 | 37,960 | 7,55,845 |
| 74 | -0 | – | -0 | – | 7,55,845 | 37,960 | 7,60,958 |
| 75 | -0 | – | -0 | – | 7,60,958 | 37,960 | 7,66,378 |
| 76 | -0 | -0 | 0 | -0 | 7,66,378 | 40,237 | 7,69,709 |
| 77 | 0 | – | 0 | – | 7,69,709 | 40,237 | 7,73,240 |
| 78 | 0 | – | 0 | – | 7,73,240 | 40,237 | 7,76,983 |
| 79 | 0 | – | 0 | – | 7,76,983 | 40,237 | 7,80,951 |
| 80 | 7,80,951 | 40,237 | 7,85,156 | ||||
| 81 | 7,85,156 | 42,652 | 7,87,055 | ||||
| 82 | 7,87,055 | 42,652 | 7,89,068 | ||||
| 83 | 7,89,068 | 42,652 | 7,91,201 | ||||
| 84 | 7,91,201 | 42,652 | 7,93,463 | ||||
| 85 | 7,93,463 | 42,652 | 7,95,860 | ||||
Annual withdrawal increases by 6% every 5 years to keep up with inflation. Every 5 years, the debt portion is replenished by transferring from equity. Final equity-to-debt transfer takes place at age 71.
While the debt portion covers immediate and regular needs, the Equity portion combats inflation and sustains lifestyle. Rebalancing maintains discipline and ensures corpus longevity.
Key Benefits of This Strategy
These benefits are missing in a standard pension plan.
The SUD Life Saral Pension Plan is a standard annuity product where you pay a one-time purchase price and start receiving annuity payouts immediately.
It is positioned as a simple, hassle-free retirement option, offering a steady income stream for life. The plan has just two straightforward choices—Single Life Annuity and Joint Life Annuity.
However, a closer look at the features reveals some major limitations:
These drawbacks can significantly reduce the value of the plan and it also has a high agent commission.
For this reason, the SUD Life Saral Pension Plan may not be an ideal addition to your retirement portfolio.
A more effective strategy would be to include equity allocation in your retirement portfolio. Equity can help counter inflation and protect your lifestyle over the long term.
By diversifying across asset classes, you can strike a balance between safety, growth, and liquidity, ensuring that your retirement funds withstand different risks.
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Finally, since retirement planning is highly personal, it is wise to consult a Certified Financial Planner. A professional can help tailor your portfolio based on your specific goals, risk tolerance, and financial needs.
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