How much pension can I commute at the time of vesting? If I don't exercise this option at vesting time can I do it later?Generally speaking, up to one third of the accumulated corpus at the time of vesting can be commuted to give you a lumpsum. This means that if the corpus is of Rs 30 lakh, you can get a commutation amount of Rs 10 lakh. Pension will be paid on the balance amount of Rs 20 lakh. The exact amount available for commutation, however, depends on the terms and conditions of the specific pension plan.
The option to commute pension can be exercised only at the time of vesting of the pension policy, and not later, when one actually starts receiving the pension.
As this policy is taken on the life of the child, it does not provide protection if the parent dies. Ideally, one should take a policy in one’s own name instead of the child’s. Take the premium waiver rider to ensure that the policy continues even if the premium-paying parent passes away.
