First such initiative in pensions segment
Mumbai, April 4
Pensioners worrying about delayed pension cheques may soon be a thing of the past. ICICI Prudential Life Insurance and ICICI Bank have launched a pre-paid annuity card, which is considered to be the first such initiative in the pension segment.
This international card will allow pensioners to withdraw cash at ICICI Bank and VISA ATMs and make purchases at several merchant establishments. Customers will also get a monthly statement just like with a debit or credit card. The policyholders do not have to open an ICICI Bank account for availing themselves of the card.
An annuity is a contract sold by an insurance company designed to provide payments to the policyholder at specified intervals, usually after retirement. An ICICI Prudential Life annuity policy will offer a return of 8.5 per cent without the return of premium.
Ms Shikha Sharma, MD and CEO, ICICI Prudential, said the company would target its current group superannuation customers as well as companies that self-manage their superannuation funds with this retail offering.
Most pensioners receive their pension through cheques, which must be deposited in a bank account to access as cash.
According to research conducted by ICICI Prudential, delays in receiving the cheque, the process of getting the cheque cleared as well as security issues of handling cash were pointed out as among the problems faced by pensioners.
The annuity card will smoothen this process by electronically crediting the card with the defined pension as per the specification - monthly, quarterly or annually. The limit on the card will hence be the credited annuity amount. However, only the first three transactions in a month will be without any additional charges.
The bank is working on offering reward points on the annuity card just like other debit or credit cards.
According to Ms Chanda Kochhar, Executive Director, ICICI Bank, additional facilities such as making utilities payments using the annuity card are also being considered.
ICICI Bank had issued one million pre-paid cards in 2005-06. Of these, travel and payroll cards issued by employers constituted the bulk, said Ms Kochhar.