What is LIC Saral Pension Plan?
Saral Pension plan from Life Insurance Corporation of India is a non-linked, non-participating, single premium, and individual immediate annuity plan providing an insured with guaranteed income benefits. Per the guidelines of IRDAI, the plan offers profitable terms and conditions with the advantage of most safety and trust. With the LIC Saral Pension, the insured receives an immediate guaranteed income by investing a single premium. In a sudden medical emergency, financial help is also available for the insured and the family.
Eligibility Criteria of LIC Saral Pension Yojana
If you plan to buy LIC Saral Pension Plan to secure your retirement years, you must cover the following eligibility criteria and restrictions.
Minimum Purchase Price
- Depends upon
- Minimum annuity
- Selected annuity option
- Age of annuitant
Maximum Purchase Price
40 years – 80 years
- Monthly: Rs. 1000
- Quarterly: Rs. 3000
- Half-yearly: Rs. 6000
- Annual: Rs. 12,000
Immediate Annuity Options of LIC Saral Pension
LIC Saral Pension plan offers the following annuity options
Annuity Option 1
Life annuity with a return of 100% of the Purchase Price.
Annuity Option 2
Joint life last survivor annuity with a return of 100% of the purchase price on the of the last survivor.
Benefits of LIC Saral Pension Yojana
Purchasing a retirement plan from Life Insurance Corporation of India comes with multiple features, such as providing financial security after your job, medical assistance in an emergency, and meeting household expenses’ needs. Except for these, the LIC Saral Pension Scheme benefits make the plan a perfect accompaniment to your retirement years.
Additional Features of LIC Saral Pension
Saral Pension Plan of LIC of India provides additional features that make the purchase worthwhile for the golden years of life. Let’s look into the features of the pension plan to enhance the benefits per your requirements.
Mode of Annuity Payment
Payment of annuity can be made in yearly, half-yearly, quarterly, and annual modes. Hence as per the mode selected, the annuity payment will start from the date of commencement of the policy.
Avail of the Incentives
The following incentives are available under LIC’s Saral Pension Plan
a. Incentive for Higher Purchase Price
Incentives are available for higher purchase prices by way of an increase in the annuity rate and the mode of annuity payments.
Also, the incentives may increase if there’s a reduction in the frequency of annuity payments.
b. Incentive for Online Sale
If the policy is purchased online, a rebate of 2% by way of an increase in the annuity rate is applicable.
The policyholder can surrender the policy anytime after six months of the date of commencement of the policy if any of the annuitants (for single and joint life) or the children are diagnosed with suffering from critical illness as specified under the LIC Saral Pension Plan. The annuitant needs to submit the documents, with mandatory NEFT submission.
On approval by the medical examiner, the Life Insurance Corporation of India will pay 95% of the Purchase Price to the annuitant after deducting any outstanding loan amount or interest. After the payment of the surrender value, all the benefits cease, and the policy terminates.
The loan is available on the policy only after the policy is completed 6 months from the date of commencement of the policy. Under Annuity Option II (Joint Life), the annuitant can avail of the loan, or the spouse can avail of the loan in case of the death of the annuitant. The maximum loan amount is determined as the effective annual interest amount payable on the loan and does not exceed 50% of the annual annuity amount.
The annuitant is entitled to tax benefits of upto Rs. 1.5 lakhs under Section 80 CCC of the Income Tax Act, 1961. Also, the death benefits provided to the nominee are 100% tax exempted under Section 10D. Contact a tax advisor to learn more about income tax benefits.
Free Look Period
A freelook period of 30 days is available from the date of receipt of the electronic or physical mode of the policy document, whichever is earlier. If the policyholder is not satisfied with the policy’s terms and conditions, they can return the policy to the corporation within the specified days stating the reasons for objections to receiving the policy. LIC of India will cancel the policy and return the premium paid after deducting the charges or any annuity paid.