LIC Annuity Plans

Life Insurance Corporation or LIC was established in the year 1956. In its 60 years of existence, the company has earned a very good reputation for providing various insurance plans and is still leading the market. At the starting of its establishment, LIC was the only provider of life insurance plans and it is still leading the market.

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The company caters to various needs of its customers and thus it has the largest customer base in India. With different life insurance products, annuity or pension plans are one of the highest selling products of LIC. Let us understand the concept behind annuity plans and find out various plans offered by Life Insurance Corporation of India.

What is an Annuity Plan?

An annuity plan, as its name suggests, offers you a regular income for life after you invest a lump sum. What happens with an annuity plan is that your life insurance company invests your money and pays back the returns that are generated from it as pay-out when you get to retire. There are two types of annuity plans:

  • Deferred Annuity Plans: The annuity plans that enable you to accumulate a corpus for your retirement over some time. You can invest in a different annuity plan while you are working. The accumulated corpus is the premium that you pay and you get it back when your annuity plan gets matured. Upon maturity, the accumulated corpus is paid as a lifelong income.

  • Immediate Annuity Plans: An immediate annuity plan, as its name suggests, is for those who want to get regular income as soon as they make the initial investment. Generally, an immediate annuity is for those who are approaching the age of retirement. In this way, a deferred annuity plan accumulates the amount you pay whereas an immediate annuity pays the money back.

LIC Annuity Plans:

Life Insurance Corporation of India offers the following annuity plans:

LIC New Jeevan Nidhi Plan:

New Jeevan Nidhi Plan is LIC’s traditional deffered life insurance plan through which you become eligible to create your retirement corpus through the duration of policy by paying regular premiums. You get annuities as soon as this plan matures. The features of this plan are:

Features and Benefits:

  • It is a participating pension policy that allows this plan to participate in bonus declarations that are made by LIC.

  • Upon maturity of this annuity plan, the sum assured, vested bonuses, and the sum assured is paid as a benefit of maturity.

  • Guaranteed additions are as well added to the corpus that enhances the advantages payable under this plan.

  • The maturity benefits can as well be used to purchase an immediate annuity plan or single premium deferred annuity plan.

  • Upon the death of the insured, the accrued sum assured is paid with guaranteed additions and vested bonuses.

  • You can as well commute 1/3rd part of the benefits of maturity and get it in cash.

  • The disability benefit and accidental death riders are provided as optional cover. You can opt for these riders by paying an extra premium and they promise to provide an additional sum assured when accidental death or disability occurs.

  • You get discounts on the premiums if you select to pay the premium half-yearly or annually. The discounts on these premiums are 1 percent and 2 percent respectively.

  • This policy allows both regular and single premium payment options.

  • Rebate on high sum assured is also provided if you choose the coverage of Rs. 3 lakhs and above.

Eligibility Criteria:

Entry Age 20 Years to 60 Years
Policy Term 5 Years to 35 Years
Sum Assured Minimum – Rs.1 lakh
Maximum – No Limit
Monthly Pension Amount Minimum – Rs. 1000 Maximum  - Rs. 10,000

Sample Premium Rate:

Mentioned below are sample premium rates that are applicable on this LIC annuity plan for a sum assured of Rs. 2lakh:

Entry Age Regular Premium Single-Premium
Term 10 Years Term 20 Years Term 30 Years Term 10 Years Term 20 Years Term 30 Years
35 years NA Rs. 10,720 Rs. 6,960 NA Rs. 1,22,400 Rs. 91,230
45 years Rs. 23,050 Rs. 11,430 NA Rs. 1,70510 Rs. 1,26,560 NA

Pradhan Mantri Vaya Vandana Yojana:

This annuity plan was launched by the Indian government to provide regular income to senior citizens. This scheme was made available till March 31st, 2020 and now it is being sold through LIC. Some of the benefits and features of this scheme are:

Features and Benefits:

  • You can purchase this scheme online through the website of LIC.

  • It is a saving for ten years in which pension is paid during the specified duration.

  • This scheme has no maximum entry age limit.

  • You can receive a pension half-yearly, yearly, monthly, or quarterly basis as per your requirement.

  • In case of death of the policyholder, the nominee gets the purchase price paid for this scheme.

  • If you require funds for critical or terminal illness, you can easily surrender this policy. Upon the surrender of this policy, 98% of the invested amount is refunded.

  • Upon maturity of the policy, you get the price of purchase along with the last installment of pension.

  • You can as well avail loan against the policy after completion of the first three years. You can avail of loans up to 75% of the price of purchase of the policy.

Eligibility Criteria:

Entry Age 60 Years and more
Policy Term 10 Years
Yearly Price to Purchase Minimum – Rs.1,44,578
Maximum – Rs. 14,45,783
Monthly Pension Amount Minimum – Rs. 1000
Maximum - Rs. 10,000

Sample Pension Rates:

Here are the sample rates of pension that you can avail of at various frequencies while paying a purchase price of Rs. 10lakhs:

Monthly Pension Quarterly Pension Half-Yearly Pension Yearly Pension
Rs. 80,000 Rs. 80,500 Rs. 81,300 Rs. 83,000

LIC Jeevan Shanti Plan:

Jeevan Shanti is a flexible pension plan that allows you to get an annuity immediately after you purchase the policy and even after some years. This plan, therefore, provides you a choice between deferred or immediate annuity pay-outs. The benefits and features of this plan are as follows:

Features and Benefits:

  • You need to pay only a single premium to purchase this plan.

  • You can purchase this plan online from the website of LIC.

  • You are eligible to avail of a single life annuity for yourself only or can select a joint-life annuity option that can pay annuities to the spouse as well.

  • The plan offers ten annuity options. You can select an option according to your income requirements.

  • In the deferred annuity option, guaranteed additions are included in the purchase price that enhances the amount of pension.

  • If the policyholder dies during the deferment period, the accrued guarantee add-ons with purchase price are paid. However, the death benefits would be a minimum of 110% of the purchase price.

  • The death benefits can easily be taken by the nominee in installments or lump sum. The nominee can as well opt for death benefits that can be received as annuity payments.

  • If the purchase price is high, a single premium is paid. You can also get an increase in the annuity that is payable.

  • There is as well an increase of approximately 2% in the rate of an annuity when you purchase a policy online.

  • The facility of loan against the policy is available under some specific options of the annuity.

Eligibility Criteria:

Age of Entry 30 years to 100 years
Purchase Price Minimum – Rs. 1.5 lakh
Maximum – No limit
Pension Amount Minimum Yearly – Rs. 12,000
Half-Yearly – Rs. 6,000
Quarterly – Rs. 3,000
Monthly – Rs. 1,000
Deferment Period One year to 20 years

Options for Annuity Payment:

The below-mentioned options for annuity payment are provided under this plan:

  • The annuity is payable for a lifetime.

  • The annuity is paid for a guaranteed period of five years and after that, it is paid for life.

  • The annuity is paid for a guaranteed period of ten years and after that, it is paid for life.

  • The annuity is paid for a guaranteed period of fifteen years and after that, it is paid for life.

  • The annuity is paid for a guaranteed period of twenty years and after that, it is paid for life.

  • The annuity is paid for life and the purchase price is returned on death.

  • The annuity is paid for life that increases at a rate of 3% every year.

  • A joint-life annuity is payable for the life of the primary policyholder. After the primary policyholder's death, 50% of the annuity is paid to the secondary policyholder till he/she lives.

  • A joint-life annuity is payable for the life of the primary policyholder. After the primary policyholder's death, 100% of the annuity is paid to the secondary policyholder till he/she lives.

  • A joint-life annuity is payable for the life of the primary policyholder. After the primary policyholder's death, 50% of the annuity is paid to the secondary policyholder till he/she lives. Upon the death of the second policyholder, the purchase price is refunded.

Sample Rates of Annuity:

Suppose, Mr. A, purchases LIC Jeevan Shanti plan by paying a purchase price of Rs. 10 lakhs. The different options for annual annuity rates that he can pay are mentioned below. For calculation purpose, the following details are assumed:

  • A has selected the immediate annuity option.

  • He has taken a joint-life annuity policy wherein the age of the second policyholder is 35 years.

Annuity Options Amount of Annuity
Option I – Lifetime Annuity Rs. 66,200
Option II – Lifetime Annuity Guaranteed for Five Years Rs. 66,100
Option III – Lifetime Annuity Guaranteed for 10 years Rs. 65,900
Option IV – Lifetime Annuity Guaranteed for 15 years Rs. 65,500
Option V – Lifetime Annuity Guaranteed for 20 years Rs. 65,000
Option VI – Lifetime Annuity Guaranteed with Purchase Price Return Rs. 56,000
Option VII – Increasing Lifetime Annuity Rs. 49,100
Option VIII – Joint Lifetime Annuity with 50% Annuity for the Secondary Annuitant Rs. 62,900
Option IX - Joint Lifetime Annuity with 100% Annuity for the Secondary Annuitant Rs. 59,900
Option X - Joint Lifetime Annuity with 100% Annuity for the Secondary Annuitant and Return of the Purchase Price Rs. 55,500

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

How to Apply for LIC Annuity Plan?

As mentioned earlier, you can purchase LIC pension plans online from LIC’s website. Other than online, you can as well purchase a LIC plan from the agent of LIC or LIC's branch office. Alternatively, you can also compare various annuity plans online and thereafter can select the most suitable one.

Documents Needed to Apply for LIC Annuity Plans

To purchase a LIC annuity plan, you should provide the following documents:

  • Age proof

  • Identity proof

  • Proposal form

  • Address proof

  • Income proof

  • Photographs

  • Bank details

How to Make a Claim under LIC Annuity Plan?

Deferred annuity plans pay death benefits if the policyholder dies during the deferment period. For making a death claim, one has to take the following steps:

  • He/she should fill Form 3783, which is the death claim form. One has to fill part A of this form.

  • The death certificate issued by the Municipal Corporation has to be submitted.

  • The original documents of the policy are also required.

  • Some other documents such as post-mortem report, police FIR, panchnama, etc. can also be needed if the policyholder dies in an accident.

FAQs

  • What is pension’s commutation?

    Ans: When you opt for a deferred annuity plan and it matures, then a part of the vesting benefit can also be commuted. Commutation of vesting benefit also means that withdrawal of 1/3rd part of the maturity benefit in a lump sum. This type of withdrawal is also called a pension commutation Under Section 10 (10A) of the IT Act, 1961 and is free of tax.
  • What are the exclusions of LIC Annuity Plans?

    Ans: Most of the LIC Annuity plans exclude suicide. If the policyholder commits suicide and dies within one year of policy purchase, 80% of the paid premium is refunded. If the policyholder commits suicide in one year of renewal of a lapsed policy, a higher of the available value of the surrender or 80% of the paid premium is given. However, there are no exclusions in the immediate annuity plan. In the case of suicide, 100% of the policy purchase price is refunded.
  • What is the meaning of vesting?

    Ans: Vesting means the maturity of the life insurance policy that you have purchased. Vesting is applied in case of deferred annuity plans when there is a deferment period before paying any benefit. When the deferment period gets over, the insurance plan is said to vest.
  • What is the meaning of purchase price?

    Ans: The purchase price is the amount or premium of the policy that you pay to the insurance provider like LIC for purchasing an insurance plan.
  • Is annuity taxable?

    Ans: Yes, the annuities that get through a pension plan are considered as your income. So, they are added to your taxable income and are taxed as per the applicable income tax slab rate.
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LIC Annuity Plans Reviews & Ratings

4.6 / 5 (Based on 9 Reviews)
(Showing Newest 9 reviews)
Girish
Namakkal, April 06, 2021
Secure future
The Lic India pension was bought by me 2 years back so that I can secure my future and my family’s future. I really love it and found the plan much impressive. I have search for various good plans at reasonable premium.
Amrit
Bairabi, April 05, 2021
A great alternative
I have found a best alternative for me along with my job. I have got the lic India pension plan policy. It is a good plan which I have bought for securing my future and it has been a wonderful plan for everyone.
Shobha
Aruppukkottai, April 01, 2021
Lot of features
In my Lic India pension plan I got to know about various features which has enhanced my future. I am future secured along with my job.
Latika
Belpara, March 02, 2021
Pay-outs
I choose the Lic India pension plan because I wanted to secure my and my family’s future. It is one of the guaranteed pay out plans available. A good place to invest and get the best pay out to be happy in the future.
Garima
Edayirikkapuzha, March 02, 2021
Regular income plan
I was looking for a retirement plan so that it can give me benefits in my future. I got to know about Lic India pension plan from my friend. The premium payment is quite easy to do and I easily got along with this plan because I got various benefits into the same. Great plans and would recommend to my friends.
Shorabh
Dharur, February 10, 2021
Secure future
I bought this lic India pension plan recently and I really like it. I found the financial stability and coverage under this plan. It is best plan for my retirement.
Ashish
Mumbai, July 20, 2016
LIC Insurance
The pension plan of mine is very nice. It provide good returns in future and the coming time is tension free. Premium is low, and the special thing of the plan is that it is lic pension plan, the trusted company from the ages. I'm fully satisfied with my insurance plan.
Prashant
Noida, July 20, 2016
Pension Policy
My lic pension plan is the best policy. Premium is less policy coverage is high. Claiming procedure is easy because of fast service facilitate by the executives 24X7. Updates are send regularly to my email address. The online renewals are also easy to make. Good future investment.
Gaurav
Bangalore, May 13, 2016
Trustworthy
I secure my future by buying the lic pension plan. The policy coverage is fantastic approx. 88% and the claims are even better. Service is fast and on time. Good behaviour of executives and staff members is the best part. Good job.
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