What is LIC Pension Plan?
LIC pension plan offers the dual benefit of insurance cover and investment to provide a steady flow of income once you retire. Under the pension plan, you invest regularly during earning years and develop a corpus to utilise in post-retirement years. LIC retirement plan ensures you enjoy financial security and a stress-free life even if you stop working.
Why Should You Buy LIC Pension Plan?
As per the World Economic Forum Report on Global Human Capital, did you know that only 7.4% of the working-age Indian population is covered under a pension programme? What about other populations? The whole life you have spent streamlining your family's requirements, fulfilling their wishes, and strengthening their future. You can be thankful for the continuous cash flow of income you earn today. But what about your future? A future when you will no longer get the fixed salary credited to your account every month? Have you prepared yourself for the time?
A fair pension plan will help answer the question confidently with a YES every time. The Life insurance corporation pension plan secures the fund for retirement to provide you with an annuity or monthly income that will be your best asset to manage expenses and future requirements. The comprehensive features of the LIC pension plan help you beat inflation and plan your retirement smartly.
Benefits of Pension Plan from LIC of India
LIC pension plans are designed to offer you multiple benefits when you invest your money and dream of planning your post-retirement life in the best way possible. The benefits include providing you with a regular income, covering critical health conditions, and more. Other major benefits are mentioned below
Guaranteed Income
Once the annuity period starts, the LIC pension scheme provides you with regular income. If you start early, you get an extended period to grow a large pension fund. If you want to know how much regular income you will need after retirement to sustain the current standard of living, take the help of the LIC pension plan calculator online.
Uncomplicated Process
LIC pension plan makes it easy to receive payments on the clock without running to office doors. With Life insurance corporation online portals, the processes to pay, track, and even receive your amount become more accessible and quicker. All you have to do is update your contact details, account details, and when and how you want to receive the payments.
Tax Efficiency
Life insurance corporation pension plans provide tax exemption under Section 80C, Section 80CCC, and Section 80CCD of the Income Tax Act, 1961.
Best Income Source for Corporate Employees
Unlike the public sector, where a dedicated amount of your income is used to source a pension after retirement, the private sectors lack the privilege to offer. In such conditions, pension plans are the best income source for corporate employees, and pension plans by LIC are trusted all over India to provide timely benefits.
Guaranteed Benefits
Apart from the promised insurance, LIC provides guaranteed additions, such as reversionary and final bonuses, that are added to the payout at the end of the plan. All the reversionary bonuses are timely declared to the public timely. LIC also provides a loyalty bonus to the policyholders to trust and stay with the LIC pension plan for years.
Secure Lifetime Payout
LIC’s Jeevan Akshay VII offers lifetime annuity options such as payout until the policyholder's death and a lifetime annuity with purchase price return with an increased rate of 3.00% p.a. for life.
List of Pension Products by LIC
LIC pension plans are curated to help insurance buyers plan their retirement smoothly. Different annuity offers are available, such as immediate, differed annuity plans, joint life, immediate annuity for life, and others. Primarily Life insurance corporation offers three pension plans, but some other plans, like endowment and unit-linked insurance plans, allow you to receive monthly maturity benefits that help produce a regular income source after retirement. LIC has also launched the LIC pension plus plan with guaranteed additional benefits. The pension products by LIC are listed below
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LIC’s Jeevan Akshay - VII |
Coverage Benefits
- Different annuity options
- Receive lifetime annuity
- Incentives available
- Avail loans
Eligibility Criteria
Entry Age: 25 years - 100 years
Purchase Price: 1 Lakh - No limit
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LIC’s New Jeevan Shanti |
Coverage Benefits
- Single premium plan
- Option to take a joint life annuity
- Death benefit
- Tax benefit
Eligibility Criteria
Entry Age: 30 years - 79 years Purchase Price: 1.5 Lakh - No limit
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LIC’s Saral Pension |
Coverage Benefits
- Flexible annuity payment modes
- Surrender value
- Free-look period
- Incentives available
Eligibility Criteria
Entry Age: 40 years - 80 years
Annuity Price: Rs. 12,000 annually - No limit
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LIC Pension Plus Plan |
Coverage Benefits
- Unit-linked plan
- Invest in market-linked funds
- Guaranteed benefits
- 4 different fund options
Eligibility Criteria
Entry Age: 25 years - 75 years
Premium Amount: 1 Lakh single - No limit
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LIC SIIP Plan |
Coverage Benefits
- Unit-linked plan
- Investment and life cover
- Death benefit
- 4 different fund options
Eligibility Criteria
Entry Age: 90 days - 65 years
Premium Amount: Rs. 40,000 annual - No limit
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LLIC Bima Jyoti |
Coverage Benefits
- Endowment plan
- Maturity benefit
- Death benefit
- Saving and Insurance
Eligibility Criteria
Entry Age: 90 days - 60 years
Sum Assured: 1 Lakh - No limit
What to Consider While Purchasing a LIC Pension Scheme?
Apart from just comparing, you must consider some vital factors to select a suitable LIC pension scheme to plan your retirement cover. To make the purchase decision, briefly review a few points mentioned below
Know Your Pension Requirements
Make an estimate of how much money you will require after your retirement. Calculate your monthly expenses, savings, daily needs, loans and liabilities you need to pay, inflation, and other financial obligations. Remember that the value of money decreases over time; hence take an estimate of your amount to maintain the same lifestyle you live today.
Start Planning Early
The earlier you start, the lesser you have to invest. If you start investing in your early 20s, you will have to invest less and have more time to take advantage of compounding. Alternatively, if you start investing after the 40s, you must invest a comparatively higher amount to get the same amount of corpus.
Select the Right Type of Pension Plan
There are different types of pension plans available to choose from. Based on your current income and aspired future amount, decide how much investment you need to make every year. You can seek help from a financial advisor to select a plan that suits your requirements and provides the best returns. We RenewBuy can assist you better here.
Vesting Time
When purchasing a plan, it is essential to consider the vesting time that perfectly complements your needs and retirement age.
Type of Payout
The type of payout will depend on your financial requirements after retirement. Some plans would give a one-time lump sum on vesting, while others will pay you annuities throughout your life. These payouts will include the overall percentage of return, investment profits, and guaranteed additions that vary as per the plan you select.
Don’t Ignore the Charges/ Fees
Many hidden charges are associated with the plans, affecting the returns you receive. When purchasing a plan, knowing all the hidden charges is essential to get a clear picture of the amount and benefit you will earn.
Ensure Guaranteed Returns
To secure a stable income source for your post-retirement years, ensure that the plan provides consistent benefits and additional returns without any risk of failure. When some plans provide the annuities for life, some may provide you benefits afterlife.
How Does LIC Pension Plan Work?
While comparing the available plans, you can use the LIC pension plan calculator that helps you accumulate benefits as per the inputs provided. The amount reflects the benefits you will acquire by investing a specific amount after retirement. The LIC pension plan calculator presents all the details of the amount invested until your retirement age, interest earned throughout the scheme, and the final amount generated at the end of the policy. The plans allow you to get the benefits in a lump sum or generate a monthly income source.
How to Buy LIC Pension Plan
LIC pension schemes are available to purchase online and offline. Make a direct purchase from the official website of Life insurance corporation or contact any intermediaries like agents, brokers, etc. Here’s the simple process to buy a LIC pension plan.
Online Purchase
- Log in to the official website of the LIC.
- Choose the required LIC plan and click on the ‘Buy Now’ button.
- Select the coverage and provide the required details.
- Your required premium will be reflected as per the information provided.
- Pay the premium online using a credit card, debit card, or net banking.
- Your policy will be issued, and the details will be sent to the email provided.
Offline Through Intermediaries
If unavailable online, you can buy a suitable plan from LIC agents, brokers, or banks. Here you will be assisted by the concerned person throughout the purchasing process.
How to Buy LIC Pension Plan from RenewBuy
With RenewBuy, you can buy a Life insurance corporation pension plan in the simple steps mentioned below:
- Visit our website and click on the ‘Life’ tab.
- Provide the required information.
- Compare and pick the best plan from the list provided.
- Once the payment is made, you will get your policy documents by email.
To make the process more convenient, connect with one of the POSP advisors on our handy mobile application.
Final Words
Remember, it’s beneficial to act timely to purchase a suitable pension scheme when planning your retirement. A timely investment will help you yield higher benefits and gain financially secured post-retirement years. With flexible LIC pension plans, you can attain a stress-free retirement regardless of income and living style that offers multiple benefits of annuity options, flexible payments, and lifetime financial security and fulfils your liquidity needs by availing of the loan.
Want to make a quick and informed decision with experts? Immediately connect with RenewBuy for a better understanding of the pension plan by LIC and the benefits offered.