Goodbye Tension, Hello Pension

LIC Pension Plus - Goodbye Tension, Hello Pension

Pension plans play a very important role in creating retirement income. Several years back in order to receive a pension, one has to attain the age of either 58 or 60 years. Even as of now, also the procedure is same in the ways of traditional, Savings and income. In present days there are lot many Insurance companies who are giving the pensions at the age of 40 plus.

The Life Insurance Corporation (LIC) has launched a new unit-linked pension scheme, Pension Plus with minimum guaranteed return of 4.5 percent. This policy is available to the age group of 18 – 75 years. Minimum vesting age and maximum vesting age is 40 years and 85 years.

This policy plan started on 2nd September, 2010. Minimum premium plan for regular premium is 1500 rupees and the maximum limit for the regular premium is 1,00,000 rupees.
LIC Pension Plan is giving single premium payment facility to his customers.

The new pension plus policy is connected with the Insurance Regulatory and Development Authority's latest ULIP guidelines. LIC offers new plans with two choice debt fund and mixed fund. Under the Debt fund, more than 60% of the amount would be invested in government securities while the other 40 percent would go into money market instruments.
Under the Mixed fund plan, more than 45 percent money would be invested in government securities; however 40 percent would go into money market instruments and 15-35 per cent into equities. This plan can be purchased by any one between 18-75 years of age. And Pension plus minimum maturity time is 10 years.

LIC new plan comes without any life cover. Premiums paid after deduction of allocation charge will purchase units of the Fund type chosen. 2 switches are allowed free of charge within a given policy year. To provide an annuity based on the prevailing immediate annuity rates, Guaranteed Maturity Proceeds will compulsorily be used.

Policy holders can pay premium amount through regular modes at yearly, half-yearly or quarterly or monthly intervals over the term of the policy. The minimum regular premium that can be selected through modes other the ECS mode is Rs 15000 per annum while the maximum allowed for regular premium is Rs 1,00,000. Rs 1500 per month is the minimum premium for the ECS mode of payment. The minimum single premium is Rs 30000, however there is no limit on the upper side. With this plan, policyholders also get benefit of Top up facility which allows the customer to pay additional premiums in multiples of Rs 1000/- without any limit at anytime, during the term of the policy.

The main features of the plan:

According to the plan, if all due premiums are paid till maturity, and then a guaranteed interest shall accrue on the gross premium, including Top-up premiums if any. The guaranteed interest rate shall be 50 basis points over the average of the overturn repo rate. At present, a minimum guaranteed rate of 4.5% per annum would be available on all premiums received up to 31st March, 2011.

In case of Death, The Policyholder's Fund Value shall be due either in a lump sum or as an annuity, which will depend on the payable lump sum and the prevailing immediate annuity rates under the annuity option chosen. In case of surrender of the policy within 5 years from the date of commencement of policy, the Policyholder's Fund Value after taking the Discontinuance Charge shall be converted into monetary terms. If policy holder surrenders after 5 years from the date of commencement of policy, then the policy fund value shall be used for payment of an annuity and there will no Discontinuance Charge.

Please know the associated risks and the applicable charges, from the Insurance agent or the Intermediary or policy document of the insurer.