LIC's Saral Pension Offering Assured Return In Long Term: What Are The Financial Benefits?

LIC's Saral Pension Scheme is an assured and secured investment opportunity for investors who are not comfortable with the volatility of the equity markets. It is a Standard Immediate Annuity plan. The investors will have two options select the type of annuity choices on payment of a lump sum amount. The pre-decided annuities will be paid throughout the lifetime of the Annuitant(s), as per IRDAI regulation. The eligibility and the benefits of the LIC Saral Pension Scheme have been mentioned below.

Eligibility of the LIC's Saral Pension

According to LIC, the minimum age at entry under this scheme is 40 years, and the maximum age at entry is 80 years. LIC offers multiple minimum annuity options as mentioned below. For the monthly annuity mode, the investors will have to pay Rs. 1000, for the quarterly annuity mode the investors will have to pay Rs. 3000, for the half-yearly annuity mode the investors will have to pay Rs. 6000, and for the yearly annuity mode the investors will have to pay Rs. 12000. The minimum purchase price of the scheme depends on the selected option minimum annuity and the age of the annuitant. Additionally, there is no limit maximum purchase price. However, in the case of a joint-life annuity, can be taken with the spouse only.

Purchase Price of the LIC's Saral Pension scheme

As per LIC, the purchase price is Rs. 10 lakh (excluding the taxes), where the annuity mode will be yearly. The age of the annuitant at entry should be 60 years, and the age of the spouse at entry should be 55 years.

Under the first annuity option, which is the life annuity with a return of 100% of the purchase price, the annuity amount will be Rs. 56,450. Under the second annuity option, that is the joint-life last survivor annuity with a return of 100% of the purchase price on the death of the last survivor, the annuity amount will be Rs. 55,950.

These annuity options are assured by the LIC.

Benefits offered by the LIC's Saral Pension Scheme

Benefits under this plan is offered as two options. Under the first option, the annuity payments are paid in arrears for as long as the annuitant is alive, according to the selected mode of the annuity. On the other hand, if the annuitant dies before the policy, the annuity payment will cease immediately and 100% of the purchase price will be paid to the nominee(s) or legal heirs.

Under the second option, the annuity amount will be paid in arrears for as long as the annuitant and/or spouse are alive, according to the selected mode of the annuity. On the other hand, on the death of the last survivor, the annuity payments will cease immediately and 100% of the purchase price will be paid to the nominee(s) or legal heirs.

Surrender value, loan, and free lock-in period

According to the policy term, as an investor you can surrender the scheme at any time after 6 months from the date of commencement, if the annuitant or spouse or any of the children of the annuitant is diagnosed as suffering from any of the critical illnesses, as specified by LIC. In that case, 95% of the purchase price will be paid to the annuitant, subject to deduction of any outstanding loan amount and the loan interest, if any, as stated by the life insurance corporation.

You can take a policy loan at any time after 6 months from the date of commencement of the policy. However, for the joint-life annuity option, the loan can be availed by the Annuitant and on the death of the Annuitant, the same can be availed by the spouse. Additionally, the maximum amount of loan that can be granted under the policy will be such that the effective annual interest amount payable on the loan does not exceed 50% of the annual annuity amount payable under the policy. Also, like other LIC policies, this scheme offers a free lock-in period. As an investor, if you are not satisfied with the policy, the policy may be returned to the Corporation within 15 days.