LIC Pension Plans

Keep reading to learn more about LIC Pension Fund schemes.

What are LIC Pension Plans?

LIC Pension Plans are insurance products that provide policyholders with a regular income after retirement. These plans help individuals save money during their working years, allowing them to receive a steady income in retirement. LIC of India offers several pension plans designed to help you achieve your financial goals, align with your risk profile, and fulfill your needs.

Types of LIC Retirement Plans/ Pension Plans

LIC pension fund schemes are made to help people who want to buy an insurance plan for their retirement in a smooth way. You can look into different kinds, like single premium annuity plans, immediate or deferred annuity plans, and more.

Here are details on the different LIC retirement plans policies that can help you secure your life after retirement.

LIC New Jeevan Shanti

This is a single premium payment policy where the insurance holder receives annuity payments after the deferment period. The annuity rates are determined at the policy's initiation and are paid throughout the annuitant's lifetime.

Features and Benefits of LIC New Jeevan Shanti

• The insured needs to invest only once to get lifelong guaranteed returns in the form of monthly income.

• One of the main benefits of LIC New Jeevan Shanti is Joint-life annuity option, which can be taken for any lineal ascendant/descendant of a family i.e., children, parents, grandparents or siblings, or spouse.

• The policy offers a guaranteed additional benefit every month during the deferment period. The total accrued amount is paid along with the death benefit amount.

• Under the policy, the policyholder can take a loan. The loan amount is limited to 80% of the surrender value.

LIC Jeevan Akshay-VII

This is an immediate annuity LIC pension plan in which the policyholder can choose from 10 different annuity options. Under this LIC retirement plan, the annuity rate is guaranteed at the policy's initiation and paid to the annuitant throughout his/her lifetime.

Features and Benefits of LIC Jeevan Akshay VII

• This immediate annuity LIC pension scheme requires annuitants to pay a lump sum.

• The policyholder can choose to receive the annuity yearly, half-yearly, quarterly, or monthly.

• The plan offers the option of joint life immediate annuity for life with a provision for 50% of the annuity to the secondary annuitant on the demise of the primary annuitant.

• The annuity options available under this LIC pension plan are:

  • Lifetime Immediate Annuity

  • Lifetime Annuity with Return of Purchase Price

  • Immediate Annuity is guaranteed for 5/10/15/20 years (even on death); after that, it is payable for life.

  • Life Annuity increasing at a simple rate of 3% p.a.

  • Annuity for life with 50% or 100% to the spouse after the annuitant's death.

  • Annuity for life with 100% annuity for the spouse after the annuitant's death and Return of Purchase Price after the death of the last survivor.

LIC Saral Pension Plan

This LIC Pension Scheme must be purchased with a single premium. After that, the annuity will begin. Annuity rates in LIC’s Saral Pension scheme are guaranteed at inception and payable throughout annuitants' lifetime.

Features and Benefits of LIC Saral Pension Plan

• The minimal annuity is Rs. 12,000 yearly.

• The annuity mode will determine the minimum buying cost, buyer's age, and the option selected.

• No upper limit exists on the purchase price.

• After six months, policyholders can borrow against the scheme.

LIC Pension Plus Plan

A pension product by LIC, this unit-linked insurance plan (previously LIC Pension Plus 803) allows investors to invest their money in various market-linked funds to generate increased returns. The investor can use the total accumulated amount at the end of the policy term to buy an immediate or deferred annuity plan. This not only increases the savings corpus but secures the financial future of the pensioners and their families.
Now one can use the LIC Pension Plus maturity calculator to get an accurate idea of the benefits and the investment details.

Features and Benefits of LIC Pension Plus Plan

• Buyers can invest a lump sum single premium amount or invest a fixed sum regularly on a monthly, quarterly, half-yearly, or yearly basis.

• The invested amount can be annuitised to create a regular stream of income post-retirement. Annuitisation is the conversion of a lump sum amount to periodic fixed pensions/annuities.

• It comes with 4 different fund options ranging from equity and debt to a mix of both that one can choose per their risk tolerance.

• The most important benefit is the Guaranteed Additions that LIC of India makes to the fund value at specific policy years. These additions are 100% assured and made irrespective of any market fluctuations.

LIC Smart Pension Plan

The LIC Smart Pension Plan 879 is a single premium, immediate annuity plan designed to offer guaranteed lifetime income. This means you pay once, and start receiving a regular pension almost immediately for the rest of your life. It offers a variety of annuity options, including single-life and joint-life options, as well as flexible payout modes and customizable death benefit options. This LIC retirement plan is great if you want a steady income after you retire. You can buy it easily online or in person.

Features and Benefits of the LIC Smart Pension Plan

• Single premium LIC retirement plan with immediate annuity and several annuity choices.

• You can choose between Single Life and Joint Life annuities.

• There are four ways to receive the annuity: monthly, quarterly, half-yearly, and yearly.

• You can choose between three death benefits: an annuity, installments, or a lump sum.

• You can customize your plan with options like Advance Annuity, Liquidity, and Annuity Accumulation.

• A 3% incentive for current policyholders, nominees, and NPS subscribers.

• There is a loan option for when you need cash.

• Partial or full withdrawal is allowed under certain conditions.

• There is also coverage for dependents who are disabled.

• Enjoy tax benefits under Section 80C of the Income Tax Act.

Why You Should Have LIC Pension Plans?

LIC Pension plans are your answer if you want to build a secure fund for retirement. These plans provide regular payments as an annuity or a monthly income, which you can use to fund your retired years and comfortably manage your spouse’s expenses. You can choose the vesting date, which is the date from which you become eligible to receive the pension, to coincide with the age at which you would supposedly retire. The LIC Pension schemes ensure that you have a financial backup and live a stress-free life after retirement.

Benefits of LIC Retirement Plans/Pension Plans

LIC pension plans offer numerous advantages to the insured policyholders. The benefits range from ensuring a regular income to covering healthcare costs or travel expenses. Let us look at them in more detail.

• Assured Income: LIC invests in stocks, bonds, mutual funds, real estate, and the money market to gain reasonable returns. This enables insured members to cover daily expenses without difficulty and continue with their lifestyle without financial stress.

• Financial Security: LIC retirement plans provide for disciplined saving helping you achieve long-term financial sustainability. They shield people from market risks in their post-retirement phase.

• Flexible Payment of Premiums: The lic pension fund scheme is flexible regarding the premium paid as per the income level. Insurance buyers can opt for payment modes as per their convenience.

• Date of Vesting: LIC pension plans allow policyholders to choose a vesting age as per their retirement needs. This flexibility helps plan income flow according to personal career timetable.

• Death Benefits: With LIC retirement plans, if the policyholder dies, the nominee gets financial help. It protects the financial interests of family members.

• A Range of Schemes: The LIC pension fund scheme has a variety of plans which cater to different retirement needs. People can select plans according to the risk-taking ability and expected income.

• Advantages of Taxation: As per existing tax laws, LIC pension plans offer tax benefits too. Benefits scope will lessen overall tax implications matching as well as building retirement savings.

How Does the LIC Pension Plan Calculator Work?

The LIC pension plan calculator calculates the pension amount based on your input. The calculator can be used by anyone eligible to invest in a pension plan. Upon submission of the necessary information, the calculator provides the corpus one can accumulate by retirement with the invested amount. So, the LIC pension plan calculator shows you the amount invested until your retirement, interest earned throughout the scheme tenure, and the total corpus generated through this scheme.

Things to Keep in Mind Before Buying Best LIC Pension Plan

This section will discuss a few things you need to remember to ensure that you buy the best LIC pension plan that suits your needs.

• Know Your Pension Needs
  You need to estimate how much money you need after you retire. Consider that the real value of money decreases with time, which is why you need to build a sizeable corpus to lead the same lifestyle throughout. The corpus you need will depend on your current savings, daily expenses, remaining loans to be paid off, inflation, and other financial obligations that may arise when you retire.

• Buy a Plan Early
  Starting early with a LIC pension plan will help you easily build up a sizeable corpus for your retirement. Starting as early as your 20s will mean you will have to invest less over time. With the power of compounding, the small amounts you would have invested will have grown to a large sum by the time you reach retirement age. Alternatively, if you start investing in your 40s or 50s, you will have to pay considerably higher amounts to reach the same amount of corpus.

• Buy a Deferred or Immediate Annuity Plan After LIC Retirement Plan Matures
  It is not easy to handle a large sum of money at once. To avoid this for your retirement corpus, you should immediately invest any lump sum amount you receive at the time of vesting in an immediate or deferred annuity plan. For instance, the final fund value from your LIC SIIP can be used towards purchasing a high annuity plan.

• Know the Types of LIC Pension Plans
  There are different forms of pensions. The first option includes plans like the EPF, PPF, and NPS, where you deposit a sum of money every year and receive a pension income after you retire on reaching a certain age. The second option is pension plans from asset management companies that invest in the stock market. The third option is insurance cum savings plans that build up a retirement corpus for you and, at the same time, make sure you are protected against risks. Each option has its pros and cons, and you should go with one(s) that make sense for you. Many people prefer LIC pension plans because they offer a two-way benefit – insurance cover and assured returns.

• The Type of Payout is Important
  There are different types of payouts that pension plans have. Some would give you a lump sum amount on vesting, while others would pay you an annuity for life. The ones you ought to choose should be based on the total amount you get back, the overall return percentage, and the convenience factor.

• Know the Charges /Fees
  Knowing the charges/fees will help you identify the plans that provide better returns. Not many people realize the amount of money that goes towards hidden charges/fees. Factoring them in will provide a clearer picture of the real returns.

How to Buy LIC Pension Plans?

Online
The company offers specific LIC pension plans which are available online only. The customer only needs to log into the company's website, choose the required LIC pension plan, choose the coverage, and provide the details. The premium will be determined using the filled details. The customer then needs to pay the premium online through credit card, debit card, or net banking facilities, and the policy will be issued.

Follow the steps given below:

Step 1: Visit the Official website of LIC of India

Step 2: Click on the “Buy Online” option on the top right corner.

Step 3: Fill in your details such as Name, DOB, Contact number

Step 4: Customize the plan by choosing the sum assured, policy term, and premium frequency per your requirements. You can also add any rider for enhanced protection.

Step 5: Once you've done this, pay the premiums online. Once the payment is confirmed, your policy details and premium receipt will be sent to your personal email address.

Through Intermediaries
LIC pension plans which are not available online can be purchased from LIC agents, brokers, banks, etc., where the intermediaries help with the application process.

LIC Resources

FAQs