Exide Life Insurance is an established private Life Insurer in India and a provider of QROPS Schemes in India. The company is wholly owned by Exide Industries Ltd., the largest manufacturer of storage batteries and biggest provider of power storage solutions in India.
Its products are oriented mainly towards wealth creation and savings, with a strong traditional product portfolio.
Exide Life offers two QROPS schemes in India for those who are looking to transfer their UK pension to India.
- Exide Life Golden Years Retirement Plan
- Exide Life New Immediate Annuity with Return of Purchase Price
Both these plans are recognized by HMRC (Her Majesty’s Revenue and Customs) as suitable options for returning NRIs to transfer their UK pensions into an Indian QROPS scheme.
Exide Life Golden Years Retirement Plan
Exide Life Golden Years Retirement Plan is a non-market linked and non-participating Variable Insurance Pension Product. This is a traditional pension plan in which has Capital Guarantee and provides flexibility of choosing the Premium Paying Term, the Premium Amount and the Vesting Age within the applicable limit.
Minimum and Maximum Entry Age: 18-65 years
Minimum and Maximum Vesting Age: 55 years is the minimum age for vesting under Indian QROPS and maximum age is 75 years.
This policy can be purchased through a Single Premium or through regular monthly or annual contributions. For Indian QROPS transfers, purchase through single premium is recommended. Depending on the income needed during retirement, the premium amount can be decided. For single premium purchase, a minimum amount of INR 240,000 is to be contributed. All the premiums paid by the policyholder will be transferred to an Individual Policy Account(IPA). For pension transfer from the UK to Indian QROPS, minimum regular contribution term will be 9 years. This policy also has the option to alter the premium paying term during the policy term.
Top-Ups – Top-ups are not allowed for single premium policies. The policyholder can pay top-up premiums up to two years before the vesting date, for regular policies.
In this Indian QROPS Policy, a minimum guarantee is applicable on the regular and top-up premiums as well as on the Individual Pension Account(IPA). Below are the guaranteed benefits of the policy:
- All Premiums including the Top-up premiums are guaranteed a compounded growth of 1% per annum.
- During the first five years of the policy, Minimum Interest Guarantee of 5% per annum compounded is applicable on the IPA.
The corpus accumulated in the IPA is invested in a “Capital Guarantee Plan”. At the end of every policy year, below interest rates are credited to the IPA:
- Minimum Floor Rate – 1% per annum compounded for the entire policy duration.
- Additional Interest Rate – 4% per annum compounded will be credited to the IPA for the first 5 years of the policy and 0.5% thereafter.
- Residual Addition – This is a variable interest rate credited at the end of each year, after the fifth policy year. The interest will be proportional to the amount invested in the Capital Guarantee Plan.
Guaranteed Vesting Benefit(GVB): GVB will be the higher of the balance in the IPA or all the premiums including top-up premiums compounded at 1% per annum. For those who have transferred UK Pension to QROPS schemes in India, the GVB will be disbursed subject to the policyholder attaining 55 years of age or the vesting age of the policy, whichever is later.
If the premium payable in greater than or equal to INR 480,000, then the policy becomes eligible for Loyalty Benefits. This benefit is credited to the IPA at the end of vesting term and is equal to 100% of the premium allocation charges deducted throughout the policy term.
This policy has Guaranteed Death benefit clause, which is determined by the higher of the following:
- 105% of all the premiums including the top-up premiums paid till the time of death.
- Gross premiums and top-up premiums compounded at 1% per annum till the intimation of death.
- Balance in the IPA plus pro-rated interest from the last date of premium payment, till the intimation of death.
The ascertained death benefit is payable to the nominee of the policy.
The various charges levied for this policy are given below:
- Premium Allocation Charge – For Single Premium policies, 3% of the total premium is charged during purchase. For all regular pay policies, the charges vary from 2-9% depending on the policy year and the frequency of premium payment. All Top-up Premiums carry an allocation charge of 1.5%.
- Policy Administration Charge – For single premium purchase, 2.2% of the total premium is charged from second policy year till the fifth policy year. For regular premiums, the charges start from 4% of the premium from second policy year onwards.
- Annual Management Fee – This is charged at 1.35% per annum on the accumulated balance in the Policy’s IPA.
The above charges mentioned are applicable for the Purchase and Continuity of the Plan only. For transfer of UK Pension to QROPS in India, additional charges may be applicable.
Options on Vesting:
Under this plan, an annuity plan should be mandatorily purchased from the Vesting Benefits either in full or 2/3rd of the total value. This policy does not provide the option to postpone the vesting year.
The Exide Life Golden Years Retirement Plan is a recognized Indian QROPS scheme under the HMRC’s ROPS rules, and is suitable for those who are looking to grow their accumulated pension corpus and look to draw their pension, at least 10 years later.
Exide Life New Immediate Annuity with Return of Purchase Price
The other Indian QROPS scheme offered by Exide Life is the Exide Life New Immediate Annuity with Return of Purchase Price. This is an Immediate Annuity Plan with Return of Purchase Price offered by Exide Life which is recognized by HMRC under QROPS schemes in India. This plan makes a series of payments at the frequency mode chosen by the annuitant until death. On the death of the annuitant, the nominee receives 100% of the Purchase Price.
This policy guarantees lifetime income to the policyholders at the frequency chosen, to cater to their retirement needs. The applicable Annuity Rates depends on the age of annuitant at entry, payout modes, and Purchase Price. This is a no surrender policy and hence, the amount invested become inaccessible once this is bought.
The Annuity Rates paid out varies by the purchase price band. Purchases of high value are entitled to higher rates. The rates applied at the time of purchase is guaranteed throughout the life of the annuitant.
Minimum Age for Entry – For transfer of pension to Indian QROPS, the minimum age for entry is 55 years.
Maximum Age for Entry is 75 years.
This is a single premium policy where the minimum purchase price excluding taxes, should be sufficient to yield a minimum annuity of 1000 INR per month.
The policyholder can choose to receive the payments either annually, bi-annually, quarterly or monthly. For transfer of pension to this Plan under Indian QROPS, the purchaser will start receiving the pension from the end of the first modal period.
This Plan which is a recognized QROPS scheme in India offers only Life Annuity with Return of Purchase Price. On the death of the annuitant, the annuity payments are stopped and the nominee is entitled to receive full Purchase Price.
The Exide Life New Immediate Annuity with Return of Purchase Price is an immediate annuity plan with Return of Purchase Price, and as a recognized QROPS scheme in India is suitable for those people who have accumulated UK pension assets and have returned to India and are looking to draw from their pension corpus immediately. This is suitable in case a person wishes to leave an inheritance to a nominee who can be a spouse, a parent or a child and the annuitant’s partner does not need regular payments for survival.