What is LIC Saral Pension Plan 862?
LIC Saral Pension Plan (Plan No. 862) is a single premium immediate annuity plan. This means the policyholder will receive guaranteed pension payments for the rest of their life after making a one-time premium payment. The plan is particularly beneficial for individuals looking to secure their financial future during retirement without the complexities often associated with pension plans.
Key Features of LIC Saral Pension Plan
Immediate Annuity: Annuity payments begin immediately after purchasing the policy.
Single Premium Payment: The plan requires only one premium payment. This will make the investment process easier.
Two annuity options:
Single Life Annuity: Provides a pension for the life of the annuitant. The purchase price will be returned to the nominee upon the recipient’s death.
Joint-Life Annuity: Provides a lifetime pension to the annuitant and their spouse. The purchase price is refunded when the last survivor dies.
Flexible payment methods: Policyholders can receive their pension monthly, quarterly, semi-annually or annually.
Minimum Annual Amount: The minimum annual amount is INR 12,000 with no ceiling.
Credit limit: Six months after policy inception Policyholders can apply for a loan of up to fifty percent on the policy.
- Immediate Annuity: Pension payments begin immediately after the purchase of the policy.
- Single Premium Payment: The plan requires only a one-time premium payment, simplifying the investment process.
- Two Annuity Options:
- Single-Life Annuity: Provides a pension for the annuitant’s lifetime, with the purchase price returned to the nominee upon the annuitant’s death.
- Joint-Life Annuity: Offers a pension for the annuitant’s and their spouse’s lifetime, with the purchase price returned after the death of the last survivor.
- Flexible Payment Modes: Policyholders can receive their pension monthly, quarterly, half-yearly, or annually.
- Minimum Annuity Amount: The minimum annual annuity amount is INR 12,000, with no upper limit.
- Loan Facility: After six months of policy commencement, policyholders can avail of a loan of up to fifty per cent against the policy.
- Surrender Option: The policy can be surrendered after six months if the annuitant or spouse is diagnosed with a critical illness.
Eligibility Criteria
To be eligible for the LIC Saral Pension Plan, applicants must meet the following criteria:
- Age: Minimum age of 40 and a maximum age of 80 at the time of purchase.
- Purchase Price: The minimum purchase price depends on the annuity amount chosen, with no maximum limit.
Benefits of the LIC Saral Pension Plan
- Guaranteed Income: The plan ensures a reliable source of income during retirement, providing peace of mind.
- Death Benefits: In the event of the annuitant’s death, the nominee receives 100% of the purchase price, ensuring financial security for dependents.
- Tax Benefits: One-time Premiums paid are eligible for tax benefits under Section 80C of the Income Tax Act, 1961.
- Simplicity and Transparency: The plan is designed to be straightforward, with clear terms and conditions that help policyholders make informed decisions.
-
Surrender Value
If the annuitant or their spouse is diagnosed with a critical illness, the policy can be surrendered after six months, with 95% of the purchase price returned.
How the LIC Saral Pension Plan Works
To illustrate how the plan works, let’s consider the following example:
Annuity Purchase: Sachin, aged 60, invested INR 10 lakhs in the LIC Saral Pension Plan.
- Option 1 (Single-Life Annuity): He chooses the single-life annuity option. He will receive an annual annuity of approximately INR 51,600. Upon his death, the nominee will receive INR 10 lakhs.
- Option 2 (Joint-Life Annuity): If Sachin includes his wife, aged 55, he opts for the joint-life annuity. In this case, the annual annuity would be around INR 51,100. The pension will continue until Sachin and his wife pass away, after which the nominee will receive the purchase price.
Annuity Amounts Based on Purchase Price
Here’s a table displaying the approximate annual annuity amounts based on different purchase prices for both single-life and joint-life options:
|
Purchase Price (INR) |
Single-Life Annuity (Annual) |
Joint-Life Annuity (Annual) |
|
10,00,000 |
51,600 |
51,100 |
|
20,00,000 |
1,03,200 |
1,02,200 |
|
30,00,000 |
1,55,100 |
1,53,100 |
Frequently Asked Questions (FAQs)
Q1: What is the minimum and maximum pension amount I can receive?
The minimum pension amount is INR 1,000 per month, with no upper limit on the maximum pension amount.
Q2: Can I purchase the LIC Saral Pension Plan online?
Yes, the plan can be purchased both online and offline, providing flexibility for policyholders.
Q3: How soon can I start receiving my pension?
Pension payments commence immediately after the policy is purchased and the premium is paid.
Q4: What documents are required to apply for the LIC Saral Pension Plan?
The following documents are typically required:
- Age proof (Aadhar card, birth certificate)
- Identity proof (Voter ID, Aadhar card)
- Address proof (Aadhar card, utility bill)
Q5: What happens if I am not satisfied with the policy?
Policyholders can return the policy within 15 days (30 days for online purchases) if they are not satisfied with the terms and conditions.
Q6: Is there a loan facility available?
Yes, policyholders can avail of loans against the policy after six months from the date of commencement.
Q7: What happens if the policyholder dies?
Yes, policyholders can avail of loans against the policy after six months from the date of commencement.
Q8: Are there any tax implications?
Premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. However, it is advisable to consult a tax advisor for detailed information.
Q9: Can I change my annuity option after purchasing the policy?
No, once the annuity option is selected at the time of purchase, it cannot be changed later.
Q10: Is there a waiting period before I can surrender the policy?
Yes, the policy can be surrendered after six months from the date of commencement if the annuitant or their spouse is diagnosed with a critical illness.
Q11: Can I include my spouse in the plan?
Yes, you can opt for the joint-life annuity option, which includes your spouse.
Q12: What happens to the policy if I stop paying the premium?
Since this is a single premium plan, there are no ongoing premium payments. The policy remains active as long as the single premium is paid.