scorecardresearchLIC’s Saral Pension plan might have something special for you

LIC’s Saral Pension plan might have something special for you

Updated: 21 Apr 2022, 05:10 PM IST

The LIC Saral Pension Yojana is a retirement annuity plan wherein you can deposit a lump sum to get a pension at regular intervals. Let’s find out more on this.

The LIC Saral Pension Yojana is a retirement annuity plan.

The LIC Saral Pension Yojana is a retirement annuity plan.

The Saral Pension Scheme of Life Insurance Corporation is a standard immediate annuity plan that follows the Insurance Regulatory and Development Authority of India's (IRDAI) criteria and offers the same terms and conditions to all life insurers. On payment of a lump sum amount, the policyholder has the option of choosing between two types of annuities.

Even in government jobs, the retirement plan is only for the elderly. But if you want to start receiving a pension at the age of 40, you must enrol in the LIC’s Saral Pension Yojana.

The prerequisite of this system is that lump-sum payments must be made instead of regular payments. This pension policy will benefit the person for the rest of their life. Furthermore, if the person buying this plan desires a loan, it can be availed after 6 months from the start of the policy.

READ MORE: Explainer | What is Atal Pension Yojana?

The Saral Pension Scheme contains all of the qualities that the previous plan lacked. That is, from the age of 40 to 80, you can draw a pension every month, quarterly, half-yearly, or annually by depositing a lump sum amount. This pension will be available for the rest of one’s life. The first is a single-life annuity that pays out 100 per cent of the purchase amount.

That is, this pension plan will be tied to a specific individual. Pension payments will continue as long as the pensioner is alive. The nominee will thereafter get the base premium. The second pension programme is for married couples. In this case, the spouse who lives the longer receives a pension. The nominee will receive the base price when both are no longer alive.

If you are 40 years old and have paid a single premium of 10 lakh, you will begin receiving 50,250 annually, or 4,187 per month, which will be available for the rest of your life. Apart from that, if you require your deposited amount back in the interim because you require the funds, you will receive the deposited amount after deducting 5%.

If you want to subscribe to this plan, you can visit the LIC website or office and get all of the details. These pension plans are available both online and in person.

Policyholders can pay the entire purchase price once and get a fixed payment for the rest of their lives under this plan.

  • Minimum annuity - Rs. 12,000
  • Maximum annuity- No capping

Factors deciding the minimum purchase price

Individuals can pick a life annuity with a 100 percent return on investment.On the death of the last survivor, the joint-life last survivor annuity option provides a refund of 100 per cent of the original purchase price.

Annuity modes

  • Monthly-minimum annuity 1,000
  • Quarterly-minimum annuity 3,000 are the two annuity options available for the LIC Saral Pension Plan.
  • Half-yearly annuity of 6,000 minimum.


The buyer should be at least 40 years old and no more than 80 years old. The minimum monthly annuity payment is 1,000, with quarterly payments of 3,000, half-yearly payments of 6,000, and annual payments of 12,000. The maximum buying price is unrestricted. Annual, half-yearly, quarterly, and monthly annuities are available.

The annuity payments will be made in arrears, i.e. after one year, six months, three months, and one month from the policy’s start date depending on whether the annuity payment method is yearly, half-yearly, quarterly, or monthly.

For example, if the policy is purchased in yearly annuity mode at 60 years of age for a purchase value of 10 lakh, the annual pension amount under Option 1 would be 51,650, and under the second option, joint-life survivor annuity with a return of 100 percent on the purchase price on the death of the last survivor would be 51,150.

Other advantages

After six months of starting the plan, LIC Saral Pension Yojana offers a loan facility to its policyholders.

After six months from the start of the plan, the policyholder can take a loan at any time. For all loans starting between May 1 and April 30, the yearly effective rate will be equivalent to the 10-year G-Sec rate p.a. plus 200 basis points. The 10-year G-Sec rate will be determined on April 1st of the relevant fiscal year.

The determined interest rate will apply for the whole term of the loan. The relevant annual interest rate for the loan sanctioned for the 12-month period beginning May 1, 2021, and ending April 30, 2022, is 8.44 per cent for the whole term of the loan.

Free look period

You have 15 days from the date of receipt of the policy document to return it, specifying the grounds for your complaints and disagreement. (30 days if the policy is acquired online). The insurer can cancel the policy upon receiving the request, and the premium amount that has been paid would be returned after small deductions.


If the annuitant, spouse, or any of the annuitant's children is diagnosed with a critical illness, the policy can be surrendered at any time after six months from the date of start. However, the annuitant will only receive 95 percent of the purchase amount back.

The scheme’s terms and conditions are the same as those of similar policies issued by other life insurers because it is a standard product. The only variable will be the annuity rate, which will be given to the policyholder by the insurer at the time of purchase. If you’re considering purchasing a Saral Pension plan, evaluate the guaranteed annuity rates and choose the one that offers you the best deal.



First Published: 21 Apr 2022, 04:59 PM IST