If you choose Life-Long Pension without Return of Principal Amount option, you will receive pension for your entire life, and no amount will be payable to anyone on death. 
If you choose Life-Long Pension without Return of Principal Amount option, you will receive pension for your entire life, and no amount will be payable to anyone on death. I retired from private service a few years ago, and I am currently aged 66. I had opened an NPS Account, and my current balance is around Rs 10 lakh. I want to exit now and start my pension. Please guide me on the various options and how much monthly pension I will likely get in these different scenarios.
B.P. Chaturvedi, New Delhi
Reply by Rajiv Bajaj, Chairman & MD, BajajCapital Ltd.
You have five different options to choose from. We will explain the features of all the options and the approximate monthly pension you will receive. (Other readers may please note that the monthly pension amount will differ from person to person depending upon the age at which the pension is being opted).
Option 1: Life-long Pension with Return of Principal
If you choose this option, you will receive approximately Rs 5,600 per month as pension for your entire life. On death, the principal amount of Rs 10 lakh will be paid to your nominee(s). Please note that the monthly pension will be taxable. However, the principal amount will be tax-free for the nominee(s).
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Option 2: Life-long pension for Self and Spouse with Return of Principal
If you choose this, you will still receive a monthly pension of approximately Rs 5,600 for your entire life, and on death, the same amount of pension will be paid to your spouse. After the spouse’s death, the principal amount of Rs 10 lakh will be paid to the nominee(s).
Option 3: Life-Long Pension for Family with Return of Principal
If you choose this, you will receive approximately Rs 5,000 per month for your entire life, and on death, the same amount of pension will be paid to the surviving spouse. After the death of the spouse, the same amount of pension will be paid to the mother of the subscriber; after her death, that amount will be paid to the father of the subscriber (if alive). After the deaths of the subscriber, spouse and both parents, the principal amount of Rs 10 lakh will be paid to the nominees/legal heirs of the subscriber.
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Option 4: Life-long Pension without Return of Principal Amount
If you choose this option, you will receive approximately Rs 7,800 per month as a pension for your entire life, and no amount will be payable to anyone on death.
Option 5: Life-Long Pension for Self and Spouse Without Return of Principal Amount
If you choose this option, you will receive approximately Rs 6,300 per month for your entire life, and on death that amount will be paid to the surviving spouse. After the death of the spouse, no amount will be payable to anyone.
You may choose any of the above options as per your choice. However, in our experience, almost 80% of subscribers choose option 1.
(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)
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