SBI Life offers 4% interim bonus

SBI Life Insurance Company Ltd today announced an interim bonus of 4 per cent on its pension policy "" SBI Life Lifelong Pensions.

This is in addition to the 4 per cent guaranteed annual return on the pension plan, assured by the company till 2008.

The interim bonus will be payable on policies that are in force as on 31st October 2003. Depending upon the performance of the fund, SBI Life CEO R Krishnamurthy has not ruled out a final bonus for policyholders.

This means that policyholders whose pension policy has been in force as on October 31, 2003, stand to gain at least 8 per cent return if not more, as policyholders also qualify to receive any annual bonus that the company may declare on top of the minimum rate, based on the performance of the investments, said Krishnamurthy.

The Life Insurance Corporation of India (LIC) recently downward revised its guaranteed annual return on pension plans. This makes SBI Life's current 8 per cent return among the highest in the industry.

"We have kept guarantees low but based on the performance of investment, policyholders can stand to gain additional annual returns in the form of bonuses," said Krishnamurthy.

SBI Life has invested the pension funds in both equity and debt, with the former accounting for less than 10 per cent.

"Equity investment has started picking up, but we are restricted by Irda norms to invest up to 15 per cent of pension funds in equity," he added.

The 8 per cent return "" 4 per cent guaranteed plus 4 per cent interim bonus "" is applicable to all those who have bought the scheme, be it an individual, a group plan or a plan sold to Kisan credit card holders.

SBI Life is currently the largest private life insurance company in India in terms of lives covered having covered more that 9,50000 lives as on date.

SBI Life launched the pension plan in February 2003 with the unique feature of providing protection to the corpus of regular savings contributed during the working life without scope for any erosion.

It offers a minimum guaranteed return until the person reaches the retirement and pension-seeking stage, said Krishnamurthy.