Life Insurance Corporation (LIC) recently rolled out its new pension plus policy. It’s a unit linked non participating individual pension plan.
This pension scheme is available to be purchased online as well as offline. All the unit-linked plans of LIC including Nivesh Plus, SIIP, New Endowment Plus help investors see their savings offer rich benefits, and help them save tax.
This new pension plan came into effect from September 5. It can be bought as a single premium payment policy or regular premium payment. Under the regular policy, the amount will be payable over the term of the policy.
Subject to policy term, vesting age, and the minimum and maximum limits of premium, the policyholder will have the option to choose the premium amount payable and policy term.
This policy has a slew of features. These include the following: It offers flexible premium payment, gives guaranteed additions, enables the option of deferred annuity, gives market linked pay out to the investors, and last but not the least -- allows policy holders for partial withdrawals.
These are some of the features of LIC’s latest pension plan:
Paid-up sum assured: It is 105 percent of total premiums received up to the date of First Unpaid Premium (FUP) reduced by partial withdrawals made during the two-year period immediately preceding the death of the life assured.
Top-up: No top up will be allowed under the plan.
Partial withdrawals: These will be allowed any time after the five years' lock-in period subject to the following:
It is allowed only against these reasons:
A. Higher education of children
B. Marriage of kids
C. Construction of residential house
D. Treatment of critical illness of self or spouse
E. Any other reason as per the IRDAI circular issued from time to time.
This will be allowed only up to three times during the entire term of the policy term. The withdrawal will not exceed between 10 percent to 25 percent of the unit fund value based on the annual premium.
Partial withdrawal charge: This is a charge levied on the Unit Fund Value at the time of each partial withdrawal of the fund and will be a flat sum of ₹100.
Switching charge: During the policy term, the policyholder can switch between any of the four funds. However, there is a charge levied on switching of monies from one fund to another. Within a given policy year, four switches will be allowed free of charge. Subsequent switches, will be subject to a charge of ₹100 per switch.
Loan facility: There is no loan facility given under this policy.
Guaranteed additions: The LIC will give guaranteed additions under this pension plan but only if all due premiums have been paid. These will be added to the unit fund at the end of 6th, 10th and each policy year from 11th year and onwards till the expiry of policy term provided all due premiums have been paid and the policy is in-force.
| End of policy year | Guaranteed Additions per annum (as % of one annual premium) | Guaranteed Additions per annum (as % of one single premium) |
| 6th | 5 % | 4 % |
| 10th | 10 % | 5 % |
| 11-15th | 4 % | 1.25 % |
| 16-20th | 5.5 % | 1.5 % |
| 21-25th | 7 % | 2 % |
| 26-30th | 8.75 % | 2.5 % |
| 31-35th | 10.75 % | 3 % |
| 36-40th | 13 % | 3.75 % |
| 41-42th | 15.5 % | 4.5 % |
Death of the life assured: In case of death of the life assured before the date of vesting, the higher of the following benefits will be payable: unit fund value as on the date of intimation of death, or assured death benefit. In case of death of the life assured before the date of vesting, the nominee or beneficiary will exercise one of the two options:
A. Withdraw the entire proceeds of the policy.
B. Utilise the entire proceeds for purchasing immediate or deferred annuity at the then prevailing annuity rates.
