ICICI Pru Guaranteed Pension Plan Calculator

ICICI Pru Guaranteed Pension Plan Calculator

What this calculator does

ICICI Pru Guaranteed Pension Plan (UIN: 105N181V05) is a non-linked, non-participating individual annuity plan designed to convert a lump sum (or a series of premiums) into a guaranteed, lifelong pension. You choose whether the pension starts right away (Immediate Annuity) or after a chosen deferment period during which your money grows with guaranteed additions (Deferred Annuity), pay via a Single Premium or a Limited Premium (5-Year or 10-Year Pay), and pick an annuity option that fits your family situation - a pure life annuity, one that returns your purchase price to your nominee, a joint life annuity that also covers your spouse, or one that steps up 3% each year to help keep pace with rising costs.

This calculator gives you an indicative estimate of:

• the vesting amount available to buy your annuity, after any guaranteed additions earned during deferment
• the guaranteed annual pension and the amount you'll receive per installment, based on your chosen payment mode
• the effective annuity rate - your pension as a percentage of the total premium you pay
• a comparison table showing how the annual pension scales with different purchase price amounts at the same age, option, and mode

Formula Used

Eligibility. Immediate Annuity requires a current age between 40 and 85, and is only available with the Single Premium option. Deferred Annuity requires a current age between 18 and 70, a deferment period of 1 to 15 years, and the age when the pension starts (current age + deferment) cannot exceed 90:

$$40 \le Age \le 85 \quad \text{(Immediate)} \qquad 18 \le Age \le 70,\; 1 \le Deferment \le 15 \quad \text{(Deferred)}$$

Total premium paid. For Single Premium, the amount you enter is the full purchase price. For Limited Premium, the amount you enter is the annual premium, paid over 5 or 10 years:

$$TotalPremiumPaid = \begin{cases} Amount & \text{Single Premium} \\ Amount \times PayYears & \text{Limited Premium} \end{cases}$$

Purchase price for annuity. Limited Premium earns a small illustrative loyalty addition, reflecting the longer commitment of paying in installments:

$$PurchasePrice = TotalPremiumPaid \times LoyaltyFactor$$

Guaranteed additions during deferment. The illustrative addition rate rises with a longer deferment period, and compounds simply (not compounded annually) over the deferment years:

$$VestingAmount = PurchasePrice \times (1 + GARate \times DefermentYears)$$

Guaranteed annual pension. A base annuity rate - which rises with the age the pension starts, since a shorter expected payout period means a higher rate - is adjusted for the annuity option chosen (Return of Purchase Price and Joint Life options pay less per year since more is guaranteed back) and the payment mode:

$$AnnualPension = VestingAmount \times (BaseRate + PriceRebate) \times OptionFactor \times ModeFactor$$

How to Use

1. Choose Annuity Start Type: Immediate (pension starts now) or Deferred (pension starts after a chosen deferment period).
2. Choose your Premium Payment Option: Single Premium, or Limited Premium over 5 or 10 years (Limited Premium is only available with Deferred Annuity, and the deferment period must be at least as long as the payment term).
3. Enter your Current Age and the Purchase Price (or Annual Premium, for Limited Premium).
4. If Deferred, enter the Deferment Period. If you picked a Joint Life option, enter your spouse's age too.
5. Choose your Annuity Option and Payment Mode, then submit to see your guaranteed pension.

Worked Example

A 50-year-old chooses Deferred Annuity with a 10-year deferment, Single Premium of ₹10,00,000, Life Annuity with Return of Purchase Price, paid yearly.

• Purchase price for annuity: ₹10,00,000 (Single Premium, no loyalty addition)
• Guaranteed addition rate for a 10-year deferment: 4.5% per annum
• Vesting amount: ₹10,00,000 × (1 + 0.045 × 10) = ₹14,50,000
• Pension start age: 50 + 10 = 60, giving a base annuity rate of 6.5%, plus a 0.25% high purchase price rebate = 6.75%
• Guaranteed annual pension: ₹14,50,000 × 0.0675 × 0.82 (ROP option) × 1.0 (yearly) ≈ ₹80,258

This is an illustrative model of the plan's benefit structure, not a reproduction of ICICI Prudential's official annuity rate card - always refer to the insurer's benefit illustration before buying a policy.