LIC has introduced a new scheme wherein policyholders can start earning pensions at an age as early as 40 years. This LIC pension scheme is ideal if you do not want to wait till 60 to retire while also ensuring a stream of income early on. This plan is called the Saral Pension Yojana and it comes with a multitude of features to benefit policyholders post their retirement.Read more
LIC’s Saral Pension Yojana offers you a way into retiring at just 40 years old. The plan starts its coverage as soon as the policyholder deposits the lump sum premium amount. Let’s look at how you can accelerate your retirement with this LIC pension scheme.
The Saral Pension Yojana is an immediate annuity plan that returns the purchase price back to the nominee on the death of the policyholder. This one is a single premium policy, meaning that you have to pay the lump sum amount at policy inception to avail of its benefits. Immediate annuity ensures that you start receiving annuities as soon as you start the policy and continues throughout your remaining lifetime.
There are two ways to avail of this pension scheme. Your options are:
Option 1 - You can choose the single life annuity option that offers lifelong annuity payouts and returns 100% of the purchase price. This means that the policy covers a single individual and as long as that individual is alive, annuities shall be payable. In the event of his/her death, the single premium paid at policy inception is returned to the nominee.
Option 2 - This is the joint-life annuity option that covers two individuals, the second individual being the spouse. It pays back 100% of the purchase price to the legal heirs on the death of the last surviving member. Annuities under this option are payable as long as either of the two members are alive. Following the death of both the members, payouts shall cease and the premium amount is returned to the assigned nominees or legal heirs.
Anyone falling in the age bracket of 40 years to 80 years is eligible to purchase this pension scheme by LIC. The entry age criteria also hold true for the spouse in the case of the joint-life annuity option. The whole life nature of the policy ensures that you receive regular payouts for as long as you live.
The pensioner has the choice in deciding when to receive the annuities. The Saral Pension Yojana comes with 4 choices in annuity payouts, viz monthly, quarterly, half-yearly, and annually. As per the option chosen, the pension starts flowing in after that period.
The amount of pension depends on how much you pay as the single premium amount. It is upon you to decide you much you would like to spend after evaluating your post-retirement needs, liabilities, dependents, etc. However, the only limit is placed on the minimum annuity payout that is fixed against each annuity mode. The minimum annuity payouts are as follows:
Rs. 1,000 for monthly mode, Rs. 3,000 for quarterly mode, Rs. 6,000 for half-yearly mode, and Rs. 12,000 for yearly mode.
There is no cap on the maximum purchase price, and consequently on the maximum annuity payouts. Therefore, it is advisable to get the pension plan for a high purchase price to make room for all kinds of financial emergencies.
Now, in order to enjoy an annual annuity payout worth Rs. 50 Thousand, you will have to deposit a single premium of Rs. 10 lakhs at the age of 40. The higher the premium, the higher will be the annuity payout.
If you have an urgent need for liquidity, you can avail of loans against the purchase price. Loans can be availed against this policy only after a period of 6 months from the date of commencement.
You can also surrender the policy after 6 months into the cover, following which 95% of the purchase price (the single premium) shall be refunded to you.
LIC further offers a rebate of 2% by way of an increase in the annuity rate on purchasing the policy online.
Additional incentives as an increase in the annuity are also applicable on opting for higher purchase prices.
The policy is a good option if you wish to retire early and also secure a regular source of income post-retirement. Annuity payouts continue for as long as you are alive ensuring that your needs are looked after at all times.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
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