On July 1, 2021, the Life Insurance Corporation of India (LIC) unveiled the Saral pension plan, which is a non-linked, non-participating, single premium, individual immediate annuity plan, according to LIC. This is a Standard Immediate Annuity Plan as defined by the Insurance Regulatory and Development Authority of India (IRDAI), which stipulates the same terms and conditions to all life insurance companies. Here's all you need to know about the new offering.
Regular fixed payments: Under this pension plan, the policyholder can contribute a lump sum amount as the purchase price and get a predetermined payout at regular intervals for the remainder of his or her lifespan. A policyholder can earn a minimum annuity of Rs 12,000 per year. The minimum purchase price is determined by the annuity type, option, and age of the subscriber or policyholder. The upper limit of the purchasing price, however, is uncapped.
Options on payment of a lump sum amount: The policyholder can select between two types of annuity when receiving a lump sum payout. Policyholders can choose between a life annuity with a payout of 100% of the purchase price and a joint life last survivor annuity with a payout of 100% of the total purchase price on the demise of the last survivor. According to LIC, annuity rates are fixed from the outset of the policy, and annuities are paid for the rest of the annuitants' lifespan.
Annuity modes: The annuitant can choose between monthly, quarterly, or half-yearly payments, according to the terms of this LIC Saral pension plan. As a result, the minimum monthly annuity offered under this plan is Rs 1,000, the minimum quarterly annuity is Rs 3,000, and the minimum half-yearly annuity is Rs 6,000. An increase in the annuity price is provided as an incentive for purchase prices exceeding Rs 5 lakhs, respectively.
Loan facility and age limit: The plan is offered to those between the ages of 40 and 80. After 6 months from the policy's launch date, the loan will be available anytime.