Max Life Insurance is one of the leading private Life Insurers in India, and a major provider of Indian QROPS schemes to returning Indian nationals who have worked in the UK and wish to transfer their UK pension to a QROPS in India. The two Max Life QROPS schemes which appear on the official HMRC QROPS list are a popular choice for returning Indians. It is a joint venture between Max Financial Services Ltd., which is part of Max Group and Mitsui Sumitomo Insurance Company Ltd., which is a member of MS&AD Insurance Group, one of the leading insurance providers in the world.

It offers a wide array of insurance products tailored for the Indian market like Regular Savings Plans, Retirement Plans, and Protection Plans.

Max Life offers two QROPS schemes in India for those who are looking to transfer their UK pension to India.

A. Max Life Forever Young Pension Plan

B. Max Life Guaranteed Life Time Income Plan

Both these plans are recognized by HMRC (Her Majesty’s Revenue and Customs).

A. Max Life Forever Young Pension Plan

This Max Life QROPS plan is a Unit Linked Plan in which the returns are linked to the markets of the countries in which the funds are invested. The investment risk for this policy is entirely borne by the policyholder. Since the investment portfolio of this plan in market-linked, the corpus invested in this product cannot be withdrawn either fully or partially nor the policy can be surrendered. This is in accordance with the guidelines for Unit Linked Plans given by IRDA(Insurance Regulatory and Development Authority), which is the highest authority for Insurance Regulation in India.

Eligibility:

Minimum and Maximum Entry Age: 30-65 years

Minimum and Maximum Vesting Age: 55 years is the minimum age for purchases under Indian QROPS and maximum age is 75 years.

Premium Payments:

The premiums for this policy can be paid annually, bi-annually, quarterly, monthly or through a single premium. For Indian QROPS, purchase through single premium is recommended. This Plan offers two investment options for the policyholder to choose:

Pension Maximiser Option – In this option, 100% of the investment corpus will be invested in Pension Maximiser Fund whose risk profile is Medium.

Pension Preserver Option – In this option, 100% of the investment corpus will be invested in Pension Preserver Fund whose risk profile is Low.

The policyholder has to choose his Option at the time of transfer of UK pension to Indian QROPS and no change is allowed in between the policy term. The minimum policy term is 10 years.

Vesting Benefits:

The Vesting Benefit/Maturity Value of this Plan will the higher of the Fund Value or the Guaranteed Vesting Benefit. For Pension Maximiser Option, the Guaranteed Vesting Benefit would be 101% of the premium(s) paid, excluding any rider charges. For Pension Preserver Option, the Guaranteed Vesting Benefit would be 110% of the premium(s) paid, excluding any rider charges.

Death Benefit:

Higher of the Fund Value or 105% of all the Premiums paid will be paid as Death Benefit.

Loyalty Benefit:

From the end of the 10th policy year, 0.5% of the Fund Value is added to the fund. These additions increase by 0.02% every year, from the end of 11th policy year.

Riders:

Max Life Partner Care Rider is available under this policy, with additional premium. In the unfortunate event of death of the policyholder, the assured Death Benefit will be enhanced by the total value of all premiums till the entire policy term subject to a maximum age of 60 years.

However, this rider is not available if the base policy is purchased with a single premium.  Accordingly if UK pension is transferred to this Plan under Indian QROPS as a lump sum purchase, the option to enhance the death benefit given to the partner is not available.

Charges for Max Life QROPS Schemes in India:

The various charges levied for this policy are given below:

  • Premium Allocation Charge – There is no Premium Allocation Charge for single premium payment. For all regular pay policies, the charges are 2% for annual mode and 1.25% for non-annual mode, for the first 10 years of premium payment.
  • Fund Management Charge – The annual charge will be 1.25% of the Fund Value for both Pension Maximiser Fund and Pension Preserver Fund.
  • Policy Administration Charge – For Single pay, 0.08% of Single Premium per month, increasing at the rate of 4% per annum, subject to a maximum of INR400 per month. For Regular Pay, the charges start from 0.36% of the premium per month and increases by 5% at 5 year intervals.

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 Max LIfe QROPS plan, an annuity plan should be purchased from the Vesting Benefits, after commuting to the extent permitted by Income Tax Act in India. Currently, 1/3rd of the total pension corpus is permissible for commutation. The remaining 2/3rd should be utilized to buy an immediate annuity plan.

Suitability:

This Plan under recognized Indian QROPS schemes, is suitable for those who are looking to draw their pension after 65 years of age, as the minimum investment term is 10 years and minimum age for entry under Indian QROPS schemes is 55 years.

B. Max Life Guaranteed Life Time Income Plan

This is an Immediate Annuity Plan offered by Max Insurance 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, till the end of life of the annuitant or the survivor as opted during the purchase of the annuity.

Features:

This policy guarantees life time income to the policy holder to cater to their needs. The policyholder can opt for a Single Annuity or Joint Annuity. Single Annuity Plan pays life time income to the policyholder. Joint Annuity Plan gives payments till the death of the last survivor.

Eligibility:

Minimum Age for Entry – 50 years. However, for transfers of pension to Indian QROPS, the minimum age for entry is 55 years as it is an Immediate Annuity Plan.

Maximum Age for Entry for this Max Life QROPS scheme is 80 years.

Premium Payment:

This is a single premium policy where minimum premium purchase price is 100,000 INR excluding taxes and there is no maximum limit for the purchase price.

Payout Modes:

Under Max Life QROPS schemes, 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.

Annuity Options:

  • Annuity for single life without death benefit: A fixed amount agreed at the time of purchase will be paid only till the end of life of the annuitant, at the frequency agreed.
  • Annuity for single life with return of Purchase Price: A fixed amount agreed at the time of purchase will be paid till the end of life of the annuitant, at the frequency agreed. On the death of the annuitant, the nominee will receive 100% of the purchase price.
  • Annuity for joint lives without death benefit: A fixed amount agreed at the time of purchase will be paid till the end of life of the last survivor, at the frequency agreed.
  • Annuity for joint lives with return of Purchase Price: A fixed amount agreed at the time of purchase will be paid till the end of life of the last survivor, at the frequency agreed. On the death of the last survivor, the nominee will receive 100% of the purchase price.

Under Indian Income Tax Act, income received from and annuity plan is taxable under “Income from Other Sources” according to the slab rates.

Suitability of Max Life Guaranteed Life Time Income Plan

In conclusion, this Max Life QROPS scheme is a classic example of an immediate annuity plan, and is similar in it’s basic characteristics to the HDFC Life Immediate Annuity Plan. Both schemes are recognized QROPS plans in India, and are suitable for those who are looking to draw from their pension corpus immediately.