LIC Retirement or Pension Plans take care of the financial needs and requirements of a person after the retirement. LIC offers a wide range of pension plans that ensure financial security to the policyholder during old age. The plans also offer other benefits like death and maturity benefits.
Table of Contents:
Types of LIC Retirement Plans
LIC of India offers 3 types of retirement plans.
- Pradhan Mantri Vaya Vandana Yojana
- New Jeevan Nidhi
- Jeevan Shanti
Eligibility Criteria
To purchase the plans, following general conditions must be taken into consideration:
| Particulars | Details |
| Entry Age | 20 years – No Limit |
| Vesting Age | 0 – 80 years |
| Minimum Premium Amount | NA |
| Minimum Sum Assured | 1,00,000 – No Limit |
| Policy term | 5 – 35 Years |
Documents Required to Purchase Plans
The following documents are needed to purchase any of the pension plans by LIC:
- Application Form/Proposal Form (duly filled and signed)
- Age Proof (birth certificate, PAN card, etc.)
- Photo ID Proof (passport, Aadhar Card, voter ID card, etc.)
- Address Proof (ration card, utility bills, Aadhar card, etc.)
- Salary Proof (salary slips, copy of Income Tax Return filed, etc.)
- Passport-sized photograph(s)
- Medical Reports (in case required)
LIC Retirement Plans
1. Pradhan Mantri Vaya Vandana Yojana: This is pension scheme introduced by the government of India and comes with no maximum entry age. It can be purchased through LIC both online and offline. It comes with an assured return of 8% to 8.30% per annum. It offers maturity benefit of return of purchase price and allows premature exit and gives back 98% of the purchase price in such cases. There are no exclusions under this policy, even in case of suicide it pays back the full purchase price.
|
Particulars |
Details |
|
Entry Age |
60 years – No Limit
|
|
Policy Term |
10 years |
|
Minimum Purchase Price |
Yearly: Rs. 1,44,578 Half-Yearly: Rs. 1,47,601 Quarterly: Rs. 1,49, 068 Monthly: Rs. 1,50,000 |
|
Minimum Annuity per instalment |
Yearly: Rs. 12,000 Half-Yearly: Rs. 6,000 Quarterly: Rs. 3,000 Monthly: Rs. 1,000 |
|
Features |
● Provides regular pension to senior citizens for 10 years (for the time frame chosen) ● Loan of 75% is available on the purchase price after 3 policy years ● Free-look cancellation period of 15 days in case of offline plan purchase and 30 days in case the policy is purchased online |
2. LIC’s New Jeevan Nidhi: LIC’s New Jeevan Nidhi is a traditional participating deferred annuity plan. It offers savings and protection along with pension. There are multiple pension options available for the policyholder to choose from, for different phases of life. It also offers the advantage of receiving a corpus amount, which comprises Sum Assured+Accrued Guaranteed Additions+Simple Reversionary Bonus+Terminal Bonus. It also gives customers the option to add Accidental Death and Disability Rider.
|
Particulars |
Details |
|
Entry Age |
20 – 58 years (Regular Pay) |
|
Vesting Age |
55 – 65 years |
|
Sum Assured |
Rs. 1,00,000 (Regular Pay) |
|
Policy Term |
Single Pay: 5-35 years |
|
Features |
● Death Benefit is a minimum of 105% of total premiums paid ● Tax benefits on premium paid as per Section 80CCC and Section 10(10D) of the Income Tax Act, 1961 ● Allows a grace period of 15 days in case of monthly mode of premium payment and 30 days for other modes |
3. LIC’s Jeevan Shanti: LIC’s Jeevan Shanti Plan is a non-participating, non-linked, single premium annuity plan. Under this plan, the policyholder gets to choose between Deferred Annuity and Immediate Annuity. Customers can avail this plan both online and offline. The immediate and deferred payout modes are further divided into several options, each offering its own set of features and benefits, that customers can choose as per their requirement.
|
Particulars |
Details (Immediate Annuity) |
Details (Deferred Annuity) |
|
Entry Age |
30 – 85 years/100 years (for Option F) |
30 – 79 years |
|
Vesting Age |
Not Applicable |
31 – 80 years |
|
Policy Term |
Not Applicable |
1 – 20 years (subject to Maximum Vesting Age)
|
|
Minimum Annuity per instalment |
Yearly: Rs. 12,000 Half-Yearly: Rs. 6,000 Quarterly: Rs. 3,000 Monthly: Rs. 1,000 |
Yearly: Rs. 12,000 Half-Yearly: Rs. 6,000 Quarterly: Rs. 3,000 Monthly: Rs. 1,000 |
|
Minimum Purchase Price |
Rs. 1.5 lakh – No Limit |
Rs. 1.5 lakh – No Limit |
|
Features |
● Guaranteed rates of annuity right from the inception of the plan ● Loan facility is available after completion of 1 policy year ● Can also be purchased for a handicapped dependent’s life ● Can be bought for own life or joint life with parents, siblings, children, spouse, etc. |
● Guaranteed rates of annuity right from the inception of the plan ● Loan facility is available after completion of 1 policy year ● Can also be purchased for a handicapped dependent’s life ● Can be bought for own life or joint life with parents, siblings, children, spouse, etc. |
Claim Process
Given below are the steps involved in the claim process:
- Intimate the company about the claim online, via SMS or by visiting the branch office
- Submit the claim form along with the necessary documents at the nearest LIC branch
- Insurer will scrutinize the claim details and inform the claimant in case any other documents are required
- After all the documents are received and verified, insurer settles the claim and the settled amount is credited to the insured’s/claimant’s account using electronic modes of transfer
Documents Required to Process Claims
The following documents must be kept ready before filing a claim request:
- Original policy document
- Death claim form (duly filled and signed)
- Attested copy of death certificate issued by local municipal authority
- NEFT mandate attested by bank concerned or cancelled cheque or bank account passbook
- Photo ID proof and address proof of the nominee (passport, Aadhar card, voter’s card, etc.)
Note: This is not an exhaustive list; additional documents might be required.
Time Taken to Settle Claims
LIC claims are usually settled within 30 days from the date of receipt of the last necessary document.
Policy Revival
In case a policy lapses due to the non payment of premium even during the grace period, the same can be revived within 2 years from the date of the first unpaid premium.
Riders Available
Riders are additional benefits that can be added to the base plan to enhance the coverage. Extra payment is done to avail these benefits. The riders that can be added to LIC pension plans are:
- Term Assurance Rider: Is a pure term rider which doubles the death benefit
- Accidental Death and Disability Benefit Rider: This rider provides additional benefit to the policyholder (or his/her dependents) in case he/she experiences disability or dies due to an accident
- Critical Illness Rider: This rider provides financial aid on the diagnosis of a critical illness
Exclusions
Under LIC pension plan, there is no exclusion of death due to suicide and full purchase price is paid.
Advantages of Purchasing LIC’s Retirement Plans
Following are the benefits of purchasing retirement plans offered by LIC:
- Premium paid on retirement plans is tax deductible as per section 80CCC of the I-T There is also a tax benefit on pension proceeds. On vesting, the policyholder can commute up to one-third of the policy proceeds which is exempted from tax under Section 10(10A)(iii) of the Act. However, the non-commuted pension proceeds taken in the form of immediate annuity are taxable in the hands of the recipient
- Policyholders have the option to receive annuity for a particular period of time or receive the same lifelong
- There is flexibility to choose premium payment frequency
- Policyholders also have the option to pay top-up premium in order to get additional benefits
- LIC’s Jeevan Shanti policy can be purchased for one’s own life or joint life with one’s parents, grandparents, children, spouse, etc.
- LIC’s Jeevan Nidhi offers Guaranteed Additions at 5% of Sum Assured for the first 5 policy years and a death benefit of a minimum of 105% of all premiums paid
FAQs
Q1. What is vesting age?
Vesting age is the age when you start receiving annuity or pension from the retirement plan.
Q2. What is free-look period?
The duration when the policyholders can analyse and review their policies. In case they find it unsatisfactory, free cancellation can be made. This period consists of 15 – 30 days from the date of issuance.
Q3. What is annuity?
The allowance, pension or regular income that the insurance company pays to the policyholder after retirement, is known as annuity.
Q4. What will happen if I fail to pay the premium of my LIC pension plan?
There is usually a grace period of 15-30 days following the due date of premium payment. However, if you fail to pay the premium even during the grace period, as long as your policy has cash value, LIC automatically pays the premium overdue by taking a loan against the policy.
Q5. Is there any charge for paying premiums through phone banking/net banking?
No, there are no charges for making premium payments via phone banking/net banking.
Q6. What is the best retirement plan available with LIC?
LIC offers three different retirement plans, namely, Pradhan Mantri Vaya Vandana Yojana, New Jeevan Nidhi and Jeevan Shanti. Customers can choose a retirement plan according to their needs, requirements and financial standing.