Retirement & Pension
Annuity income is taxable as salary

Turns a lump sum into an income you cannot outlive. Two halves: accumulation, where you build the corpus, and annuity, where you convert it into monthly income. The annuity rate you get on the day you convert matters more than twenty years of fund performance, and almost nobody is told that.

6.8%
current annuity rate at 60
₹57,000
a month from ₹1 Cr
60%
of NPS corpus is tax-free

Illustrative figures until sourced from the insurer of record.

What it covers

Guaranteed lifetime income

Cannot be outlived

Joint-life option

Continues to your spouse

Return of purchase price

Corpus back to nominee

Deferment

Higher rate if you start later

Plans

Immediate annuity, ₹1 Cr corpus, age 60, joint life

Premiums and claim-settlement ratios are illustrative until sourced from the insurer of record.

Jeevan Akshay VII

6.89% rate
LIC of India

Highest rate available today and sovereign-backed. The default choice for most retirees, and usually the right one.

₹57,400
a month for life
Quote this

Systematic Pension

6.71% rate
HDFC Life

Slightly lower rate but allows a 3% annual escalation, which matters over a thirty-year retirement.

₹55,900
a month for life
Quote this

Saral Retirement

6.50% rate
SBI Life

Lowest of the three, with the simplest documentation and the fastest setup. Worth it only for convenience.

₹54,200
a month for life
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What it will not pay for

Read this before you buy.

  • No inflation protection unless you bought an escalating annuity
  • No surrender, no exit and no rate change once purchased
  • Annuity income is fully taxable as salary
  • A plain life annuity pays the nominee nothing at all
How a claim works

This is the one line where the payout is the product. What matters is not how a claim is handled, but what you irreversibly commit to on conversion day.

  1. 01

    Accumulate

    · working years

    Through NPS, a pension plan or your own investments. The vehicle matters far less than the amount and the years.

  2. 02

    Convert to an annuity

    · at 60

    Compare every provider on the same day — rates differ materially. Once bought, the rate is fixed for life and cannot be changed.

  3. 03

    Income is paid

    · monthly, for life

    Credited monthly and taxed as salary income. It does not rise with inflation unless you specifically bought an escalating annuity.

  4. 04

    Spouse or nominee

    · on death

    Joint-life continues to your spouse. Return-of-purchase-price returns the corpus to the nominee. Plain life annuity pays nothing — the money stops.

The common mistake

Buying an annuity from whoever managed your accumulation. Rates differ by up to 0.9% between providers on the same day — on ₹1 Cr that is ₹7,500 a month, for thirty years, for one afternoon of comparison.