Everything You Need To Know About LIC Pension Plans

What is a pension?

After years of hard work, a certain time comes where an individual is required to settle down in his or her life. In this period, funds are needed to help her/him meet various daily needs and these funds aren't going to appear from thin air.

However, with proper planning and much thought, an individual's future can be secured financially. An individual can accumulate funds for her/his retirement over a long period of time. This fund is also known as Pension.

Traits of a suitable pension plan: 

If you are also interested in financially securing your post-retirement phase and are looking for a safety cushion in your retirement days, you will have to start by looking into the traits of different pension plans available in the market. The traits offered by these pension plans should be able to compliment your needs completely.

The following factors will guide you to find the best suitable plan:

• A flexible plan- The pension plan you are seeking should be able to take care of all your requirements in different times and circumstances. For instance, you could be between jobs or starting your own business and hence, your finances are going to be affected.
• Simplicity- The pension plan should be easy to go through and interpret. You should also be able to understand its basics and the terms & conditions associated with it.
• An honest plan- The plan you chose should be a transparent program and not a scam in disguise.
• Bonuses- The best pension plan should have bonuses and offer maximum profits.

LIC Pension Plan

LIC Pension Plan meets all these criteria and hence, can be considered as one of the most suitable plans for you in the long run. There are two pension plans currently being offered by LIC:

1. Pradhan Mantri Vaya Vandana Yojana (PMVVY)
2. New Jeevan Nidhi Plan. 

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension plan exclusively designed for senior citizens aged 60 years or above. There is no limit set on the maximum age for entry in this scheme. The scheme was launched on 4^th May 2017 and is open till 3^rd May 2018.

One can apply for it online as well as offline. This scheme provides the senior citizens with an assured return of 8% to 8.30% for the next 10 years. The rate of interest is dependent upon whether you choose to receive your pension on a yearly (8.30%), half-yearly, quarterly or a monthly (8%) basis.

You can purchase the policy for minimum of Rs 1.5 lakhs, wherein you will receive a pension amount of Rs 1000/month.

If you happen to survive the policy tenure (10 years), you will receive your pension your pension in arrears (in the payment mode chosen by you).

In case the pensioner dies before the completion of the policy tenure, the purchase price will be returned to the beneficiary chosen by her/him.

If the pensioner is able to survive the policy tenure and the plan has matured, s/he is eligible to receive the purchase price along with final pension installment.

 New Jeevan Nidhi Plan 

New Jeevan Nidhi Plan is also a pension plan offered by LIC. There are two factors which decide the premium to be paid by a potential annuitant - the amount of cover you opt for, and the period of cover you choose. There are several benefits that add up along the way like additions and bonuses. 

After the initial five years of agreement, the annuitant receives the assured amount, additions and bonuses subject to the accidental death or disability of the annuitant. 

In a scenario where the annuitant survives through the years of cover, he or she gets the assured amount, additions and bonuses. 

The annuitant can thereafter purchase a new pension plan or invest some of the amount for a regular income in return from LIC. The nominee of the death benefit will be 105% minimum of the total premium to be paid.

Rebates are also provided upon selection of relatively higher assured amounts of about Rs. 3 lakhs and more.

Benefits of LIC Pension Plans

The following are benefits of LIC Pension Plan:

1. Income is realized with time after the plan term.
2. The income is deposited into your account, saving you the trouble of picking up cheques from any offices.
3. The amount you receive is higher compared to the amount you pay.
4. There is a regular source of income for the rest of the policyholder’s life.
5. The policyholder is certain of this income.

Conclusion:

The rising inflation rate is eventually going to make your savings seem insufficient. Also, as your age grows, you are going to become more prone to diseases and ailments; which means, an added expense to your budget. Hence, it’s always a great idea to start planning and investing in pension plans, so you won’t have any troubles meeting your lifestyle needs in your golden years.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.