LIC Launches ‘Smart Pension’ Plan: Flexible Annuity Options & Secure Retirement Benefits

LIC has launched the Smart Pension Plan, a single-premium, non-par, non-linked annuity scheme offering flexible annuity options for both Single Life and Joint Life policies. The plan includes liquidity options for partial/full withdrawals and incentives for higher purchase prices, with annuity payments available in multiple modes. A key feature is the option for NPS subscribers to opt for an immediate annuity, ensuring financial security post-retirement

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LIC Launches ‘Smart Pension’ Plan: Flexible Annuity Options & Secure Retirement Benefits

LIC is set to launch its latest offering, the ‘Smart Pension’ plan, on February 18, 2025. This new product is a Non-Participating (Non-Par), Non-Linked, Individual/Group, Savings, Immediate Annuity Plan, designed specifically for the Indian market.

The introduction of LIC’s Smart Pension aims to reinforce the company’s strong presence in India’s expanding pension and retirement savings sector, as more individuals seek financial security for their future.

Despite a 9% decline in net premium income to ₹1.07 lakh crore in the latest third quarter—attributed to a 24% drop in single-premium collection and a 14% fall in first-year premium collection—LIC reported a 17% rise in profit after tax, reaching ₹11,056 crore, aided by a significant reduction in employee compensation and welfare expenses.

However, LIC’s value of new business (VNB), which indicates the expected profitability from new premiums, saw a 27% year-over-year decline, settling at ₹1,926 crore for the December quarter.

LIC has introduced its Smart Pension plan, a single-premium, non-participating (Non-Par), non-linked annuity scheme that offers a variety of annuity options for both Single Life and Joint Life annuities.

The plan was officially launched on Tuesday by Financial Services Secretary M. Nagaraju and LIC CEO & MD Siddhartha Mohanty, alongside senior officials from the finance ministry and LIC.

According to LIC, the plan includes several liquidity options, allowing for partial or full withdrawals based on policy terms. The minimum purchase price is set at ₹1,00,000, with incentives for higher purchase amounts. Annuity payments can be received on a yearly, half-yearly, quarterly, or monthly basis.

A key feature of the plan is the option for National Pension System (NPS) subscribers to opt for an immediate annuity. The benefits payable upon the annuitant’s survival or death will vary based on the chosen annuity option.

In the event of the annuitant’s passing, the death benefit payout can be structured as a lump sum, annuitization, installments, liquidity option, advanced annuity option, or annuity accumulation option, as per the selected terms at the time of purchase.

LIC Launches Smart Pension Plan: Key Features, Eligibility, and Benefits

Life Insurance Corporation of India (LIC) has introduced the Smart Pension Plan, a single-premium, non-participating (Non-Par), non-linked annuity scheme designed to offer flexible retirement income solutions. This plan caters to both individuals and groups, ensuring a stable and secure income stream for retirees.

Key Features of LIC Smart Pension Plan

• Eligibility:
  • Minimum entry age: 18 years, allowing early retirement planning.
  • Maximum entry age: Ranges from 65 to 100 years, depending on the selected annuity option.

• Annuity Options:
  • Single Life Annuity: Pays annuity for the lifetime of the policyholder.
  • Joint Life Annuity: Ensures annuity payments continue for both the primary annuitant and the secondary annuitant (e.g., spouse).

• Incentives for Existing Policyholders and Nominees:
  • Higher annuity rates are offered to existing LIC policyholders and nominees/beneficiaries of deceased policyholders.

• Liquidity and Withdrawal Options:
  • Policyholders can opt for partial or full withdrawals under specific conditions.

• Flexible Annuity Payment Modes:
  • Payments can be received monthly, quarterly, half-yearly, or yearly, with the annuity installment calculated based on the chosen mode.

• Special Feature for NPS Subscribers:
  • National Pension System (NPS) subscribers can opt for an immediate annuity, ensuring a seamless transition to a retirement income stream.

• Support for Dependents with Disabilities (Divyangjan):
  • The plan includes an option to secure financial benefits for dependents with disabilities, ensuring their long-term well-being.

• Loan Facility:
  • Policyholders can avail of a loan after three months from the date of issuance or after the free-look period, whichever is later.

LIC Smart Pension Plan Details

• Minimum Purchase Price: ₹1,00,000
• Maximum Purchase Price: No upper limit (subject to underwriting approval)
• Minimum Annuity Payouts:
  • ₹1,000 per month
  • ₹3,000 per quarter
  • ₹6,000 per half-year
  • ₹12,000 per annum
• Premium Payment Mode: Single Premium

Death and Survival Benefits

• Survival Benefits:
  • The annuitant will continue receiving payouts as per the chosen annuity option.

• Death Benefits:
  • In the event of the annuitant’s death, the nominee/beneficiary can choose among various payout options:
    • Lump sum payment
    • Annuitization of death benefit
    • Installment payouts
    • Liquidity option
    • Advanced annuity option
    • Annuity accumulation option

How to Purchase LIC Smart Pension Plan

The plan is available through multiple channels:

• Offline: Via LIC agents, intermediaries, Point of Sales Persons-Life Insurance (POSP-LI), and Common Public Service Centers (CPSC-SPV).
• Online: Directly from www.licindia.in.

This new Smart Pension Plan reinforces LIC’s leadership in the pension sector, offering flexible and secure income solutions for individuals seeking a stable retirement plan.