A pension plan is a popular product which is offered by LIC which helps the individuals to plan for their retirements. LIC Pension plans are retirement oriented insurance plans. LIC pension plans create a retirement corpus and provide a source of regular and steady income even after the insured individual have stopped earning. There are two types of LIC pension plans.
Deferred annuity plans- Deferred plans helps to accumulate retirement corpus over a specified period of time. The premiums paid to accumulate into a corpus which helps in funding your retirement.
Immediate annuity plans- Immediate annuity plans offer lifelong annuities at a fixed rate. It is a non-stop source of income. Immediate Annuity plans are for those who have a lump sum amount in their hand and want to receive fixed periodic incomes from such lump sum amount.
Benefits of LIC Pension plans
The benefits of LIC Pension Plans are as follows:
- LIC pension plans create a corpus for retirement savings and are also offered as unit-linked insurance plans through which you can create a substantial corpus for retirement as you would receive market-linked returns.
- Premiums paid towards LIC pension plan are eligible for deductions under Section 80CCC of the Income Tax Act subject to a maximum limit of INR 1.5 lakhs.
- Immediate annuity plans ensure guaranteed lifelong incomes which allow you to meet your expenses easily after your retirement
Under Immediate Annuity Plans, Joint life annuities are also available which provides annuities for the insured and their spouse.
- In Deferred annuity plans, 1/3rd of the accumulated corpus is provided to the insured as cash at the maturity of the plan.
LIC Pension Plans
There are three types of LIC pension plans. They are described below:
1. Pradhan Mantri Vaya Vandana Yojana
This LIC pension scheme is a savings scheme for senior citizens and was launched by the Government of India. This LIC pension plan gives regular incomes to senior citizens. This pension plan is available only till 31st March 2020. The main features of this scheme are:
- Pensions can be received as per your wish which can be annual, half-yearly, month or quarterly
- It can be brought online through the website of LIC
- This LIC pension plan is a ten-year saving scheme in which pension is paid during the duration of the plan to the senior citizen and there is no maximum entry age for the plan
- If you require funds for a terminal or critical illness then you can surrender the policy and 98% of the invested amount in the policy is refunded back.
Eligibility criteria for Pradhan Mantri Vaya Vandana Yojana
- The entry age for the plan is 60 years and onwards
- Term of the plan is 10 years
- Yearly purchase price of the plan is Minimum – INR 144,578 and Maximum – INR 14,45,783
- Monthly pension amount of the plan is Minimum – INR 1000 and Maximum – INR 10,000
2. LIC’s New Jeevan Nidhi
LIC New Jeevan Nidhi a traditional plan which offers deferred annuity option to create a retirement corpus over the duration of the policy through payments of premium and it provide annuities at the time of the maturity of the plan. The features of the plan are as follows:
- It is a participating pension plan in which you can participate in bonus declared by the company
- At the time of maturity of the policy, the sum assured is paid along with the accrued guaranteed additions as well as vested bonuses
- There are premiums discounts if you pay annually or half-yearly. The discounts are 2% if you pay the premiums annually and 1% if you pay the premiums half-yearly
- You can either opt for single premium payments or can also go for regular premium payments
- You can also commute and receive in cash 1/3rd of the maturity benefit of the plan
Eligibility Criteria of LIC’s New Jeevan Nidhi
- Entry age is 20 years to 60 years
- Duration of the plan is 5 years to 35 years
- Minimum sum assured is INR 1 lakh and there is no maximum limit.
- Monthly pension amount- Minimum is INR 1000 and Maximum is INR 10,000
3. LIC Jeevan Shanti
LIC Jeevan Shanti is a flexible annuity plan. It allows the insured to avail the annuities immediately after they buy the policy or after some years. Hence, it offers to make a choice between immediate or deferred annuity payments. The features of Jeevan Shanti plan are the following:
- The plan can be brought in a single premium
- The plan can be brought online from the website of LIC
- There are ten annuity options available under the plan and you can
- choose any annuity option according to your income requirement
- You can choose either a single life annuity or joint-life annuity.
Eligibility criteria of LIC’s Jeevan Shanti Plan
- Entry age is 30 years to 100 years
- Purchase price- Minimum is INR 1.5 lakhs and there is no maximum limit
- The deferment period is 1 year to 20 years
There are three types of pension plans offered by LIC and you can choose one which best suits your needs and requirements. Each type of LIC pension plans has its unique feature and benefit which enables the insured to accumulate fund and plan their future after retirement.