LIC Pension Plus Plan is the latest ULIP (unit-linked insurance plan) offered by the Life Insurance Corporation of India (LIC). It allows policyholders to grow a corpus through investment in the equity market and then generate a regular pension from it during retirement. LIC also makes guaranteed additions to the fund value to increase the final payout.
If the policyholder dies during the policy term:
The nominee will receive higher of the fund value or 105% of the Total Premiums paid till the date of death. The proceeds or a part of it can then be used to purchase an immediate or deferred annuity for life.
Immediate annuity is where one starts receiving a pension as soon as the plan is purchased. Deferred annuity is where annuities start flowing in at the end of a deferment period.
If the policyholder survives the policy term:
The end of the policy term is marked by the date of vesting. The policyholder will receive the entire fund value which can be further used to buy an immediate annuity or deferred annuity for life.
Say that a 30-year-old invests an annual premium of Rs 30,000 throughout the policy term of 42 years. This brings the total investment to Rs 12,60,000.
Assuming that it is being invested in a mix of Secured, Balanced, and Growth funds with an 8% return rate, the calculated benefits come out to be:
Total maturity value - Rs 59,92,991
Pension per year - Rs 7,06,928
You can use the LIC Pension Plus maturity calculator tool yourself to calculate the benefits of the plan as per your requirements.
One can partially withdraw from the fund value after the initial lock-in period of 5 years.
Partial withdrawals can only be made thrice during the policy term and in case of emergencies.
Up to a maximum of 25% of the fund value can be withdrawn at one time.
One can choose to extend the policy term provided that:
The policyholder is less than 60 years old.
It does not exceed the maximum vesting age.
It should not be more than 42 years.
Nominees can choose to receive the death benefit in installments over 5 years.
If the policy is surrendered before the lock-in period of 5 years, the fund value shall continue to remain invested as part of a Discontinued Policy Fund.
If the policy is surrendered after 5 years, LIC will pay the unit fund value to the policyholder.
The policy can be revived during the revival period of 3 years if the due premium payments are made.
A free look period of 30 days is offered to policyholders during which they can return it if they are unsatisfied with the terms and conditions.
Death claims arising out of suicide will be accepted only if it occurs within 12 months from the date of policy issuance.
