LIC Smart Pension Plan: The Life Insurance Corporation of India (LIC) has launched its new product, the LIC Smart Pension Plan. LIC’s Smart Pension Plan is a non-participating, non-linked, savings, and immediate annuity plan that provides consistent income to retirees. It features various annuity options for single and joint-life annuities. This plan is designed as a non-participating, non-linked option for individuals and groups, emphasizing savings and instant annuity advantages.
The unique benefit of the plan is its liquidity offerings, enabling holders to retrieve funds either partially or fully under specific circumstances. Annuity payments can be obtained at different intervals – annually, semi-annually, quarterly, or monthly, depending on the holder’s preference.
The plan also encompasses particular provisions for National Pension System (NPS) participants to obtain immediate annuity advantages.
LIC Smart Pension Plan Details
Minimum Investment
The minimum investment for the LIC Smart Pension Plan differs depending on the selected annuity option. As it is a single premium annuity scheme, policyholders are required to make a one-time payment when they buy the policy. The annuity sum is determined by the investment amount, the entry age, and the chosen annuity option. The LIC Smart Pension Plan offers versatile investment and payout choices. To enroll in the plan, a minimum purchase price of Rs.1,00,000 is necessary, and there is no ceiling on the maximum purchase price, provided it adheres to the Board Approved Underwriting Policy.
The smallest annuity amount depends on the selected payout frequency. Policyholders may obtain a minimum of Rs. 1,000 monthly, Rs. 3,000 every three months, Rs. 6,000 every six months, or Rs.12,000 yearly. There is no upper limit on annuities, enabling people to arrange their retirement earnings based on their requirements.
Moreover, the plan offers a single premium payment option, necessitating policyholders to provide a one-time lump sum payment upon purchase.
Key Features LIC Smart Pension Plan
- It is an immediate annuity plan with a one-time premium.
- Subscribers have the option to select either a single-life annuity or a joint-life annuity.
- The methods of annuity payments include yearly, semi-annual, quarterly, and monthly.
- The scheme provides rewards for elevated purchase prices as well as benefits for current policyholders and their nominees.
- Policyholders who have passed away may access a liquidity option, an advanced annuity option, or an annuity accumulation option. Regarding death benefits, there may be a lump sum payment, annuity payments for death benefits, or disbursement in installments.
- Subscribers of the National Pension System (NPS) have the choice to select an immediate annuity.
- The proposal additionally features a choice to ensure financial support for dependents with disabilities.
Age eligibility
The minimum age to enter is 18 years, allowing young investors to begin planning early.
The maximum age for entry varies from 65 to 100 years based on the chosen annuity option, allowing the plan to be available to many individuals.
Flexible Annuity options
Policyholders can choose between –
Single Life Annuity – Provides annuity payments for the lifetime of the annuitant.
Joint Life Annuity – Ensures annuity payments continue for both the primary annuitant and the secondary annuitant (such as a spouse).
| Annuity Type | Annuity Options | |
| Single Life | Option A | Life Annuity |
| Option B1 | Annuity Certain for 5 years and life thereafter |
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| Option B2 | Annuity Certain for 10 years and life thereafter | |
| Option B3 | Annuity Certain for 15 years and life thereafter | |
| Option B4 | Annuity Certain for 20 years and life thereafter | |
| Option C1 | Life Annuity increasing at a simple rate of 3% p.a. | |
| Option C2 | Life Annuity increasing at a simple rate of 6% p.a. | |
| Option D | Life Annuity with Return of Balance Purchase Price | |
| Option E1 | Life Annuity with 50% Return of Purchase Price after attaining age 75 years | |
| Option E2 | Life Annuity with 100% Return of Purchase Price after attaining age 75 years | |
| Option E3 | Life Annuity with 50% Return of Purchase Price after attaining age 80 years | |
| Option E4 | Life Annuity with 100% Return of Purchase Price after attaining age 80 years | |
| Option E5 | Life Annuity with 5% Return of Purchase Price each year after attaining age 76 years to 95 years. | |
| Option F | Life Annuity with Return of Purchase Price | |
| Joint Life | Option G1 | Joint Life annuity with a provision of 50% of the annuity to Secondary Annuitant on the death of the Primary Annuitant |
| Option G2 | Joint Life annuity with a provision of 100% of the annuity to the Secondary Annuitant on the death of the Primary Annuitant |
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| Option H1 | Joint Life annuity increasing at a simple rate of 3% p.a. with a provision of 50% of the annuity to Secondary Annuitant on death of the Primary Annuitant |
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| Option H2 | Joint Life annuity increasing at a simple rate of 6% p.a. with a provision of 50% of the annuity to Secondary Annuitant on death of the Primary Annuitant |
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| Option I1 | Joint Life annuity increasing at a simple rate of 3% p.a. with a provision of 100% of the annuity to Secondary Annuitant on death of the Primary Annuitant |
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| Option I2 | Joint Life annuity increasing at a simple rate of 6% p.a. with a provision of 100% of the annuity to Secondary Annuitant on death of the Primary Annuitant |
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| Option J | Joint Life annuity with a provision of 100% of the annuity payable as long as one of the Annuitants survives and Return of Purchase Price on the death of the Last Survivor |
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Incentives for Current policyholders and beneficiaries
Existing LIC policyholders and beneficiaries of deceased policyholders receive higher annuity rates, enhancing the plan’s appeal for dedicated customers.
Liquidity options for withdrawals
The policy offers options for partial or full withdrawals under specific conditions, giving policyholders financial flexibility when necessary.
Flexible Annuity payment modes
Policyholders can choose their preferred payment mode – Monthly, Quarterly, Half-Yearly, or Yearly.
The annuity installment amount is calculated based on the chosen mode.
Special feature for NPS Subscribers
Subscribers of the National Pension System (NPS) can choose to receive an immediate annuity, facilitating a smooth shift to a retirement income source.
Option for dependent persons with Disabilities
The plan offers a choice to provide financial advantages for dependents with disabilities, guaranteeing their enduring financial security.
Policy loan availability
Policyholders can avail of loans after three months from the date of issuance or after the free-look period, whichever is later. Loan availability is subject to specific annuity options and terms.
LIC Smart Pension plan details
- Minimum Purchase Price – Rs.1,00,000/-
- Maximum Purchase Price – No Limit (However, the maximum Purchase Price allowed shall be subject to acceptance as per the Board Approved Underwriting Policy)
- Minimum Annuity – The minimum annuity amounts are as follows: Rs. 1,000 per month, Rs. 3,000 per quarter, Rs. 6,000 per half-year, and Rs. 12,000 per annum, depending on the chosen mode of annuity payment.
- Maximum Annuity – No Limit
- Mode of Premium Payment – Single Premium
Death and survival benefits of LIC Smart Pension plan
On Survival of the Annuitant:
The benefits and payouts for the annuitant will depend on the annuity option chosen at the beginning of the policy.
Different annuity options provide varied survival benefits, which could include regular payouts for life or other specific benefits as per the plan’s terms.
On Death of the Annuitant (Primary/Secondary):
If the annuitant passes away, the payout to the nominee or beneficiary will be determined based on the option selected at the time of purchase. The options chosen for payment of death benefit may be Lumpsum or annuitisation of Death Benefit or In Instalments or Liquidity option or Advanced Annuity option or Annuity Accumulation option.
| Annuity Option | Benefits | |
| Option A | Life Annuity | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •On the death of the Annuitant, nothing shall be payable and the annuity payments shall cease immediately. |
| Option B1 | Annuity Certain for 5 years and life thereafter |
•Annuity payments shall be made in arrears as long as the Annuitant is alive. •On the death of the Annuitant during the period of 5 years from the date of commencement of policy, the annuity shall be payable to the nominee till the expiry of 5 years from the date of commencement of policy. Upon the expiry of this 5 years period, the annuity payments shall cease immediately. •On the death of the Annuitant after the period of 5 years from the date of commencement of the policy, the annuity payments shall cease immediately. |
| Option B2 | Annuity Certain for 10 years and life thereafter | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •On the death of the Annuitant during the period of 10 years from the date of commencement of the policy, the annuity shall be payable to the nominee till the expiry of 10 years from the date of commencement of the policy. Upon the expiry of this 10 years period, the annuity payments shall cease immediately. •On the death of the Annuitant after the period of 10 years from the date of commencement of the policy, the annuity payments shall cease immediately. |
| Option B3 | Annuity Certain for 15 years and life thereafter | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •On the death of the Annuitant during the period of 15 years from the date of commencement of policy, the annuity shall be payable to the nominee till the expiry of 15 years from the date of commencement of policy. Upon the expiry of this 15 years period, the annuity payments shall cease immediately. •On death of the Annuitant after the period of 15 years from the date of commencement of policy, the annuity payments shall cease immediately. |
| Option B4 | Annuity Certain for 20 years and life thereafter | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •On the death of the Annuitant during the period of 20 years from the date of commencement of policy, the annuity shall be payable to the nominee till the expiry of 20 years from the date of commencement of policy. Upon the expiry of this 20 years period, the annuity payments shall cease immediately. •On the death of the Annuitant after the period of 20 years from the date of commencement of the policy, the annuity payments shall cease immediately. |
| Option C1 | Life Annuity increasing at a simple rate of 3% p.a. | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •The annuity payments shall increase at a simple rate of 3% per annum for each completed policy year. •On the death of the Annuitant, nothing shall be payable and the annuity payments shall cease immediately. |
| Option C2 | Life Annuity increasing at a simple rate of 6% p.a. | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •The annuity payments shall increase at a simple rate of 6% per annum for each completed policy year. •On the death of the Annuitant, nothing shall be payable and the annuity payments shall cease immediately. |
| Option D | Life annuity with Return of Balance Purchase Price | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •On the death of the Annuitant, the annuity payments shall cease immediately and the Death Benefit equal to the Balance of the Purchase Price i.e. [Purchase Price Less (sum of all annuity payments made till the date of death of the Annuitant)] shall be payable to the nominee(s). •In case the sum of all annuity payments made till the date of death of the Annuitant exceeds the Purchase Price, no benefit shall be payable on death. |
| Option E1 | Life annuity with 50% Return on Purchase Price after attaining the age 75 years | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •In addition to the annuity payment, an Early Return of 50% of the Purchase Price shall be payable on the survival of the Annuitant to the Policy Anniversary coinciding with or immediately following the completion of age 75 years. •On death of the Annuitant, the annuity payments shall cease immediately and the Death Benefit equal to the Purchase Price Less Early Return of Purchase Price already paid till the date of death, if any, shall be payable to the nominee(s). |
| Option E2 | Life annuity with 100% Return of Purchase Price after attaining age 75 years | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •In addition to the annuity payment, an Early Return of 100% of Purchase Price shall be payable on survival of the Annuitant to Policy Anniversary coinciding with or immediately following the completion of age 75 years. •On death of the Annuitant, the annuity payments shall cease immediately and Death Benefit equal to Purchase Price Less Early Return of Purchase Price already paid till the date of death, if any, shall be payable to the nominee(s). •In case 100% of Purchase Price has already been paid till the date of death of the Annuitant, no benefit shall be payable on death. |
| Option E3 | Life annuity with 50% Return of Purchase Price after attaining age 80 years | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •In addition to the annuity payment, an Early Return of 50% of Purchase Price shall be payable on survival of the Annuitant to Policy Anniversary coinciding with or immediately following the completion of age 80 years. •On death of the Annuitant, the annuity payments shall cease immediately and Death Benefit equal to Purchase Price Less Early Return of Purchase Price already paid till the date of death, if any, shall be payable to the nominee(s). |
| Option E4 | Life annuity with 100% Return of Purchase Price after attaining age 80 years | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •In addition to the annuity payment, an Early Return of 100% of Purchase Price shall be payable on survival of the Annuitant to Policy Anniversary coinciding with or immediately following the completion of age 80 years. •On death of the Annuitant, the annuity payments shall cease immediately and Death Benefit equal to Purchase Price Less Early Return of Purchase Price already paid till the date of death, if any, shall be payable to the nominee(s). •In case 100% of Purchase Price has already been paid till the date of death of the Annuitant, no benefit shall be payable on death. |
| Option E5 | Life annuity with 5% Return of Purchase Price each year after attaining age 76 years to 95 years. | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •In addition to the annuity payment, an Early Return of 5% of Purchase Price shall also be payable on survival of the Annuitant on each of the respective Policy Anniversary coinciding with or immediately following the completion of ages 76 years to 95 years (both inclusive). •On death of the Annuitant, the annuity payments shall cease immediately and Death Benefit equal to Purchase Price Less Sum of Early Return of Purchase Price already paid till the date of death, if any, shall be payable to the nominee(s). •In case 100% of Purchase Price has already been paid till the date of death of the Annuitant, no benefit shall be payable on death. |
| Option F | Life annuity with Return of Purchase Price | •Annuity payments shall be made in arrears as long as the Annuitant is alive. •On death of the annuitant, the annuity payment shall cease immediately and Death Benefit equal to Purchase Price shall be payable to the nominee(s). |
| Option G1 | Joint Life annuity with a provision of 50% of annuity to Secondary Annuitant on death of the Primary Annuitant | •Annuity payments shall be made in arrears as long as the Primary Annuitant is alive. •On death of the Primary Annuitant, 50% of the annuity amount shall be payable to the surviving Secondary Annuitant as long as the Secondary Annuitant is alive. The annuity payments shall cease on the subsequent death of the Secondary Annuitant. •If the Secondary Annuitant predeceases the Primary Annuitant, the annuity payments shall continue to be paid to the Primary Annuitant and shall cease upon the death of the Primary Annuitant. |
| Option G2 | Joint Life annuity with a provision of 100% of annuity to Secondary Annuitant on death of the Primary Annuitant |
•Annuity payments shall be made in arrears as long as the Primary Annuitant and/or Secondary Annuitant is alive. •On death of the last survivor, the annuity payments will cease immediately and nothing shall be payable. |
| Option H1 | Joint Life annuity increasing at a simple rate of 3% p.a. with a provision of 50% of annuity to Secondary Annuitant on death of the Primary Annuitant |
•Annuity payments shall be made in arrears as long as the Primary Annuitant is alive. •The annuity payments shall increase at a simple rate of 3% per annum for each completed policy year. •On death of the Primary Annuitant, 50% of the annuity amount payable to Primary Annuitant had he been alive on due dates of annuity, shall become payable to the surviving Secondary Annuitant at the respective due dates as long as the Secondary Annuitant is alive. The annuity payments shall cease on the subsequent death of the Secondary Annuitant. •If the Secondary Annuitant predeceases the Primary Annuitant, the annuity payments shall continue to be paid to the Primary Annuitant and shall cease upon the death of the Primary Annuitant. |
| Option H2 | Joint Life annuity increasing at a simple rate of 6% p.a. with a provision of 50% of annuity to Secondary Annuitant on death of the Primary Annuitant |
•Annuity payments shall be made in arrears as long as the Primary Annuitant is alive. •The annuity payments shall increase at a simple rate of 6% per annum for each completed policy year. •On death of the Primary Annuitant, 50% of the annuity amount payable to Primary Annuitant had he been alive on due dates of annuity, shall become payable to the surviving Secondary Annuitant at the respective due dates as long as the Secondary Annuitant is alive. The annuity payments shall cease on the subsequent death of the Secondary Annuitant. •If the Secondary Annuitant predeceases the Primary Annuitant, the annuity payments shall continue to be paid to the Primary Annuitant and shall cease upon the death of the Primary Annuitant. |
| Option I1 | Joint Life annuity increasing at a simple rate of 3% p.a. with a provision of 100% of annuity to Secondary Annuitant on death of the Primary Annuitant |
•Annuity payments shall be made in arrears as long as the Primary Annuitant and/or Secondary Annuitant is alive. •On death of the last survivor, the annuity payments will cease immediately and nothing shall be payable. •The annuity payments shall increase at a simple rate of 3% per annum for each completed policy year as long as the Primary Annuitant and/or Secondary Annuitant is alive. |
| Option I2 | Joint Life annuity increasing at a simple rate of 6% p.a. with a provision of 100% of annuity to Secondary Annuitant on death of the Primary Annuitant |
•Annuity payments shall be made in arrears as long as the Primary Annuitant and/or Secondary Annuitant is alive. •On death of the last survivor, the annuity payments will cease immediately and nothing shall be payable. •The annuity payments shall increase at a simple rate of 6% per annum for each completed policy year as long as the Primary Annuitant and/or Secondary Annuitant is alive. |
| Option J | Joint Life annuity with a provision of 100% of the annuity payable as long as one of the Annuitant survives and Return of Purchase Price on death of Last Survivor |
•Annuity payments shall be made in arrears as long as the Primary Annuitant and/or Secondary Annuitant is alive. •On death of the last survivor, the annuity payments will cease immediately and Purchase Price shall be payable to the nominee(s). |
How to buy LIC’s Smart Pension Plan
The LIC Smart Pension Plan can be purchased through multiple channels, ensuring ease of access:
Offline: Available via LIC agents, intermediaries, Point of Sales Persons-Life Insurance (POSP-LI), and Common Public Service Centers (CPSC-SPV). Online: Can be purchased directly at www.licindia.in.