Sunday, May 22, 2022

LIC Pension Plans

LIC Pension Plans take care of a person’s financial demands and requirements once he or she retires. The LIC’s pension policies are specifically designed to fulfil the demands of senior persons who want to protect their future so that they don’t have to worry about money in their golden years.

Let’s learn more about LIC’s pension plans.

Types Of LIC Pension Plans

LIC offers the following pension plans to its customers:

Plan Name Eligibility
Pradhan Mantri Vaya Vandana Yojana
  • Entry Age: 60 Years (Completed) To No Limit
  • Policy Term: 10 Years
  • Minimum Pension: Rs. 1000 Per Month
  • Maximum Pension: Rs. 9,250 Per Month
LIC Jeevan Akshay VII
  • Minimum Entry Age: 30 Years (Completed)
  • Maximum Entry Age: 100 Years For Option F & 80 Years For All Other Options
  • Minimum Purchase Price: Rs. 1,00,000
  • Maximum Purchase Price: No Limit
LIC New Jeevan Shanti
  • Entry Age: 30 To 79 Years
  • Vesting Age: 31 To 80 Years
  • Minimum Purchase Price: Rs. 1,50,000
  • Maximum Purchase Price: No Limit
LIC Saral Pension
  • Minimum Entry Age: 40 Years (Completed)
  • Maximum Entry Age: 80 Years (Completed)
  • Minimum Monthly Annuity: Rs. 1000 Per Month
  • Minimum Quarterly Annuity: Rs. 3000 Per Quarter
  • Minimum Half-Yearly Annuity: Rs. 6000 Per Half Year
  • Minimum Yearly Annuity: Rs. 12000 Per Annum

1. Pradhan Mantri Vaya Vandana Yojana

The Government of India established the pension scheme of “Pradhan Mantri Vaya Vandana Yojana” to provide senior persons with a savings plan that also provides them with regular income. This plan is intended for senior citizens over the age of 60.

Key Features:

  • If the policyholder lives to the end of the 10-year policy term, he or she will be eligible for pension arrears.
  • The purchase price is repaid to the nominee if the policyholder dies in an unfortunate incident during the 10-year insurance term.
  • If the pensioner lives to the end of the policy term, both the purchase price and the pension instalment are payable.
  • If a policyholder is dissatisfied with the policy’s terms and conditions, he or she may return the policy to the company within 15 days (30 days if the policy was acquired online) of receiving it, explaining the reason for the return.

2. LIC Jeevan Akshay VII

The Jeevan Akshay – VI from LIC is an annuity plan that can be purchased with a lump sum payment. This policy provides a set amount of annuity payments for the rest of the annuitant’s life. Under the LIC Jeevan Akshay – VII, there are numerous options for payment mode and type.

Key Features:

  • There are 10 annuity options available under the plan ranging from option A to option J.
  • Throughout the term of this plan, the annuity payable is the same.
  • The purchase price is repaid if the annuity is terminated.
  • The annuity might be paid once a year, twice a year, quarterly, or monthly. Annuity payments can be made in any of these ways by the insured.

3. LIC New Jeevan Shanti

The Jeevan Shanti Plan from LIC is a flexible annuity plan that allows you to get payouts right after you buy the policy or over a period of time. As a result, the plan allows you the option of receiving immediate or postponed annuity payments.

Key Features:

  • In exchange for a one-time investment, the plan will provide a guaranteed lifetime income.
  • This is a single-premium plan with the choice of a ‘Single Life’ or ‘Joint Life Deferred’ annuity for the policyholder.
  • During the term of deferment, the policy provides a guaranteed additional benefit.
  • This plan also gives you the option of receiving an instant annuity or deferring it to a later date as a deferred annuity.

4. LIC Saral Pension

According to the Insurance Regulatory and Development Authority of India’s (IRDAI) guidelines, the LIC Saral Pension plan is a standard immediate annuity plan with the same terms and conditions offered by all life insurers.

Key Features:

  • On payment of a lump sum amount, the policyholder has the option of choosing between two types of annuities.
  • The annuity rates are guaranteed at the start of the policy, and annuities are paid throughout the rest of the annuitant’s life.
  • Annual, half-yearly, quarterly, and monthly modes of annuities are available under the plan.
  • The policy loan can be taken out at any moment after six months from the policy’s start date.

Why Should You Buy Pension Plans From LIC?

You should buy LIC pension plans because of the following reasons:

  • Guaranteed Payout

Under ULIP plans, the payment is not certain. However, with LIC pension plans, the payment is guaranteed. In addition to the promised amount, the policyholder can also plan for their future finances in advance.

As LIC pension plans help the policyholders to know the amount they will receive, they can easily figure out the amount of money needed to receive a good pension amount.

  • Receive Income Without Any Hassles

You do not have to stand in long queues for receiving your pension amount from LIC. No matter which LIC pension plan you choose, the pension amount will be deposited into your account by the company.

Moreover, you do not need to undergo any kind of paperwork like other insurance companies for receiving your own money. Most of the paperwork will be done by the LIC’s employees so that you can easily get your pension money.

  • Good Option For People In Private Jobs

Individuals working in the public sector are allocated a specific percentage of their salary in the pension amount, which the employee receives after retirement. This is not the same case with the people involved in private jobs. Therefore, LIC pension plans can assist such individuals to get a handsome pension amount after their retirement.

  • Death Benefit

In case the insured or annuitant passes away, LIC pension plans offer a death benefit that is payable to the beneficiary. Moreover, the death benefit can be provided as a large lump sum amount from a life insurance policy.

  • Tax Benefits

In addition to returns as per the income tax policies, LIC pension plans provide tax benefits on investment to the policyholder. Owing to this, the insured can save a great deal of money while investing in LIC pension plans. You can claim a tax deduction of up to INR 1.5 lakhs and reduce your tax liability while also saving for retirement.

  • Loyalty Additions

LIC pension plans also offer loyalty additions to the policyholders, which can be used to boost the retirement portfolio. Moreover, lump-sum amounts can be added in order to grow the insured’s retirement fund.

What You Should Consider Before Buying LIC Pension Plans?

Before purchasing LIC pension plans, you need to consider the following things:

  • Know Your Budget & Needs: You need to have a precise estimate about how much is your budget as well as how much are your pension needs. Analyze your current and future expenditures, income amount, your requirements in the future, and then decide on how much you can invest in LIC pension plans.
  • Inflation: Do not make the mistake of calculating your monthly expenses in today’s figures. The cost of different items that you are seeing today might rise in the next years. As a result, it is important to remember the factor of inflation before purchasing LIC pension plans.
  • Interest Rate: The rates of return offered by LIC pension plans may vary from others. When assessing the returns offered by a policy, you must understand the rate of interest if you are developing a corpus from a young age.
  • Assets & Loans: Your present assets and outstanding loans are also important factors to evaluate. If you have any kind of loan, try to pay it off during your work years. In case these loans are not paid off in time, you may be lost a portion of your annuity income.
  • Life Expectancy: It is impossible to know how long will a person survive. Therefore, your pension income should be sufficient enough to meet your needs at your retirement age. Carefully consider your life expectancy as well as your retirement needs before choosing any type of LIC pension plan.

How To Purchase LIC Pension Plans?

You can buy LIC pension plans by any one of the following methods!

Online Process:

  1. Visit the official website of the company.
  2. Click on “Buy Policies Online”. A page will be shown displaying all policies that are available to buy online.
  3. Press “Click Here To Buy” and it will redirect to the sales page of the company.
  4. Click on “Pension” and then choose the pension plan you want to buy by clicking “Buy Online”.
  5. A page will be displayed showing the information about the plan. Press “Click To Buy Online”.
  6. Enter the Covid information and then press “Proceed”.
  7. Enter your contact details and click “Proceed”.
  8. Your access ID will be displayed on the screen. Enter the OTP sent to your registered phone number and then proceed.
  9. Enter the product information and press “Calculate Premium”.
  10. Pay the premium online and your policy details will be sent to your registered mail address and phone number.

Offline Process:

LIC pension plans that are not available online can be purchased by visiting the nearby branch office of the company. The agents present in the branch office can help you choose a suitable pension plan as per your needs and budget. Moreover, if you do not wish to visit the branch office, you can also call the company’s customer care number +91-022 6827 6827. The customer care executive will guide you on which plan is better for you.

FAQs

Q1. Are there any LIC pension plan exclusions?

Suicides are typically not covered by LIC pension plans. If the insured commits suicide and dies within a year of purchasing the policy, the insurer will refund 80% of the premium paid. If a lapsed policy is revived within a year, the higher of 80 percent of the premiums paid or the available surrender value is paid. There are no exclusions in instant annuity plans, though. In the event of suicidal death, the entire purchase price is returned.

Q2. Can I buy multiple LIC pension plans?

Yes. You can buy more than one LIC pension plan.

Q3. Can I surrender my LIC pension plan before maturity?

Yes. If you want to surrender your LIC pension plan before maturity, the entire surrendered value will be added to your annual income.

Q4. What if I failed to pay the premium in time for my LIC pension plan?

Usually, you will be given a period of 15-30 days to pay the forgotten premium amount.

Q5. Should I buy a LIC pension plan if I have PF account?

Yes. Even though you have a provident fund account, you should buy LIC pension plans. Due to the rising inflation, it is not a great idea to depend solely on your PF account.

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