LIC Saral Pension Plan 862

What Is LIC Saral Pension Plan?

The LIC Saral Pension plan 862 is an immediate annuity plan that offers a guaranteed pension by paying a single premium in a lump sum. The plan is designed to offer a regular flow of income after the policyholder's retirement and ensure their financial independence. 

The policyholder can choose the annuity type between Life Annuity with Return of 100% of Purchase Price and Joint Life Last Survivor Annuity with Return of 100% of Purchase Price on the death of the last survivor. The chosen option can not be modified later anytime during the policy term. The annuity rates are guaranteed at the commencement of the policy, and annuities are payable throughout the annuitant’s lifetime.

Eligibility Criteria Under LIC Saral Pension Plan 862 

Let us now have a look at the features and benefits of the plan.

Key Features Of LIC Saral Pension Plan

The salient features of LIC Saral Pension Yojana are:

• It is a non-participating, single-premium, non-linked, immediate annuity plan.

• This LIC pension plan comes with two annuity options:

• Life annuity with 100% return of purchase price: It provides an annuity for a lifetime with a 100% return on the buying price. 

• In a Joint life annuity, 100% annuity is paid to the other spouse in case of demise of the primary. However, if both pass away, then 100% of the purchase price will be given to the nominee

• An insured can choose the frequency of the annuity payment as per their comfort. LIC offers Annual, Half-Yearly, Quarterly, and Monthly modes of annuity payment under the LIC Saral Pension Scheme. These annuity amounts can be easily calculated using the LIC Saral Pension Plan calculator.

• The pension starts when a person buys the plan with the minimum annuity being Rs. 12000/annum, no maximum limit. 

• In case the annuitant, their spouse, or any of their children is diagnosed with a listed critical illness, the policy offers the flexibility to surrender after just 6 months from the start date, hence providing financial support when it's needed most.

• The life assured can take a loan against the scheme after 6 months of its commencement. 

• This LIC pension plan offers incentives through increased annuity rates for higher purchase prices and less frequent annuity payments.

Benefits of LIC Saral Pension Plan 

1. Death Benefit

   Under a single-life annuity, 100% of the purchase price is paid to the nominee after the death of the annuitant.

   Under joint-life annuity:

   If the spouse is alive, then they will receive the same annuity amount upon the demise of the annuitant. However, if the spouse also dies, 100% of the purchase price will be given to the nominee.

   If the spouse passes away before the annuitant, then the annuitant will continue to receive the annuity. If both pass away, 100% of the purchase price will be given to the nominee.

2. Survival Benefit

   The annuity amount is payable under survival benefits as long as the Annuitant is alive.

3. Tax Benefits 

   Tax savings benefits are available as per the prevailing laws of the Income Tax Act, 1961.

Annuity Options Under LIC Saral Pension Scheme

Under the Saral Pension Yojana, LIC offers two options which are:

Option I

Life Annuity with Return of 100% of Purchase Price: This option is offered only for an individual or single policyholder in which they are entitled for Rs. 12,000 benefit amount annually, till they are surviving. In case the life assured dies, the purchase price is repaid to the nominee. 

Option II

Joint Life Last Survivor Annuity with Return of 100% of Purchase Price on demise of the last survivor: This option allows a couple to receive the pension. In such cases, the nominee receives the premium after the last surviving spouse‘s death.
Note: Annuity options chosen once cannot be changed.

Sample Illustration of LIC Saral Pension Plan Details

Purchase Price: Rs 5 Lakhs

Annuity Mode: Yearly

Age of Annuitant at entry: 45 years (completed)

Age of Spouse at entry: 43 years (completed) (applicable for Option II only)

Using the LIC pension plan calculator, the policyholders can estimate the annuity amount paid to them on various annuity modes and under both annuity options and plan their retirement easily.

LIC Saral Pension Plan Details

1. Surrender Value

   The LIC Saral Pension Plan 862 allows policy surrender after 6 months from the policy inception date if the annuitant, spouse, or child is diagnosed with any specified critical illness. On approval, 95% of the purchase price is refunded to the annuitant, after deducting any loan dues.

2. Loan

   Loans can be availed under the plan after 6 months from policy commencement. In joint life option, the spouse can also access the loan after the annuitant's death. The loan's interest must not exceed 50% of the annual annuity, and is recovered from the annuity payouts.

3. Incentives

   This LIC annuity plan offers incentives for higher annuity rates on purchase price slabs starting from ₹5,00,000, with increased benefits for larger investments and less frequent annuity payouts. A 2% annuity rate increase is also provided for online policies.

4. Free Look Period

   Policyholders have a 30-day free look period from receipt of the policy document to return the policy if unsatisfied. Upon cancellation, the premium is refunded after deducting stamp duty and annuity paid, if any. The amount is returned to the original insurer if the plan was bought using funds from a deferred pension policy. 

How to Invest in LIC Saral Pension Scheme?

Individuals who are planning to invest in a simple, standard, individual LIC pension plan can buy the LIC Saral Pension Yojana either through:

• Official LIC website or

• A LIC agent offline or

• At the nearest LIC office or

• By visiting the official website of LIC

To Sum Up!

LIC Saral Pension plan is a well-planned policy to make the financial future of the policyholder tension-free. With a minimum annuity as low as Rs 12,000 annually, this LIC pension scheme is becoming a popular choice for keeping in a diversified financial portfolio for retirees.

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