LIC PENSION PLANS: Best LIC Retirement Schemes in India
Retirement is a significant phase of life, and planning for it is a crucial financial endeavor. In India, where the concept of social security is still evolving, it becomes imperative for individuals to take charge of their retirement planning. Retirement planning is a crucial aspect of financial management that individuals should prioritize throughout their working lives. It involves setting aside funds and creating a strategy to ensure financial security and a comfortable lifestyle during retirement years. In this blog, “LIC PENSION PLANS: Best LIC Retirement Schemes In India”, we’ll explore about the best available pension plans provided by (LIC) Life Insurance Corporation Of India.
Importance Of Retirement Planning
The importance of retirement planning can be summarized in several key points:
Financial Security: Retirement planning is essential for maintaining financial security during a period when regular employment income ceases. It helps individuals accumulate savings that can be used to cover living expenses, healthcare, and other necessities.
In India government has taken some initiatives to enhance the pension benefits for lower income group people (Atal Pension Yojana).
Longevity Risk: With increasing life expectancies, there is a higher likelihood of spending a significant amount of time in retirement. Adequate planning helps mitigate the risk of outliving one’s savings and ensures a sustainable income throughout the retirement years.
Inflation Protection: Inflation destroyes the purchasing power of money with time. Retirement planning involves investing in assets that can outpace inflation, preserving the real value of savings and maintaining the ability to meet future financial needs.
Maintaining Lifestyle: Retirement planning enables individuals to maintain their desired lifestyle after they stop working. This includes factors such as travel, hobbies, and other leisure activities that contribute to a fulfilling retirement.
Healthcare Costs: As individuals age, healthcare expenses often increase. Planning for retirement includes accounting for potential medical costs, ensuring that there are sufficient funds to cover health-related needs.
Reducing Dependence: Relying solely on government-sponsored pension plans may not be sufficient to meet one’s financial needs in retirement. Personal retirement planning helps reduce dependence on external sources and provides a more comprehensive financial safety net.
Legacy Planning: Retirement planning also involves considerations for passing on wealth to heirs. Individuals can structure their finances to leave a legacy for future generations or support charitable causes.
Peace of Mind: It gives confidence and Peace of mind, Knowing that there is a proper financial plan for retirement. It reduces anxiety about the future and allows retirees to focus on enjoying their golden years without financial stress.
Hence, retirement planning is not just about setting aside money; it’s a holistic approach to securing one’s financial future, maintaining a desired lifestyle, and preparing for potential challenges that may arise during the retirement years. Starting early and regularly reviewing and adjusting the plan are key components of successful retirement planning.
LIC: A significant player in insurance and pension sector
Life Insurance Corporation of India (LIC) stands as a behemoth in the Indian insurance and pension sector, playing a pivotal role in securing the financial future of millions of individuals. Established in 1956, LIC has evolved into a multifaceted financial institution, providing a wide array of insurance and investment products tailored to meet the diverse needs of its vast customer base.
Historical Significance: LIC’s establishment marked a significant milestone in the Indian insurance landscape. Prior to its formation, the insurance sector was largely dominated by foreign companies. The nationalization of insurance, with the creation of LIC, aimed to ensure that the benefits of insurance reached a broader section of the Indian population
Key Functions and Services: LIC operates with a dual mission of providing life insurance and contributing to the economic development of the nation. The corporation offers an extensive range of insurance products, including term plans, endowment policies, money-back plans, and unit-linked insurance plans (ULIPs). These offerings cater to the varying financial goals and risk appetites of policyholders.
In addition to life insurance, LIC has a substantial presence in the pension sector. The corporation manages several pension plans, designed to provide individuals with financial security during their retirement years.
Social Impact: LIC’s impact extends beyond its role as a financial institution. It plays a crucial role in the social and economic development of the country. By promoting a savings culture and offering insurance solutions, LIC contributes to financial inclusion and stability. The corporation’s outreach has reached both urban and rural areas, ensuring that individuals from all walks of life can avail themselves of its services.
Investment and Financial Expertise: LIC’s investment portfolio is vast and diverse, encompassing various asset classes such as equities, government securities, and fixed-income instruments. The corporation’s prudent investment strategies have contributed to its financial strength and stability. LIC’s formidable presence in the financial markets allows it to generate returns that benefit policyholders and shareholders alike.
Digital Transformation: In line with the changing landscape of the financial industry, LIC has embraced digital transformation. The corporation has introduced online platforms and mobile applications to make its services more accessible to policyholders. This move towards digitalization not only enhances customer experience but also aligns LIC with global trends in the insurance sector.
Why Choose LIC For Retirement Planning
Retirement is a significant phase of life, and planning for it is a crucial financial endeavor. In India, where the concept of social security is still evolving, it becomes imperative for individuals to take charge of their retirement planning. Among the myriad of options available, the Life Insurance Corporation of India (LIC) stands out as a reliable and time-tested choice for those seeking financial security during their golden years.
Stability and Trustworthiness: LIC, being a government-owned entity, exudes stability and trust. Established in 1956, it has a rich legacy of providing financial security to millions of Indians. The trust associated with LIC is not only because of its long-standing presence but also due to its consistent track record of fulfilling commitments to policyholders.
Diverse Range of Retirement Plans: LIC offers a diverse range of retirement plans catering to the varied needs of individuals. These plans are designed to provide a steady income stream post-retirement, ensuring financial independence. Whether it’s a traditional pension plan or a unit-linked insurance plan (ULIP), LIC provides options that suit different risk appetites and financial goals.
Guaranteed Returns: One of the key reasons to choose LIC for retirement planning is the assurance of guaranteed returns. Traditional plans from LIC often come with guaranteed benefits, providing policyholders with a sense of security. In an era where market fluctuations can be unpredictable, having a portion of one’s retirement corpus in a plan with assured returns can act as a stabilizing factor.
Tax Benefits: LIC retirement plans also offer tax benefits under various sections of the Income Tax Act. Premiums paid towards these plans are eligible for deductions, providing policyholders with the dual advantage of saving for retirement and reducing their taxable income. This makes LIC retirement plans a tax-efficient investment avenue.
Flexible Payout Options: Retirement needs differ from person to person, and LIC recognizes this by offering flexible payout options. Policyholders can choose between lump-sum payouts, annuities, or a combination of both, depending on their financial requirements and lifestyle choices post-retirement.
Inflation Protection: LIC’s retirement plans often come with features that account for inflation. Regular reviews and revisions of policy benefits help in maintaining the real value of the returns over the years, ensuring that the purchasing power of the accumulated corpus remains intact.
Insurance Cover Alongside Retirement Benefits: Many LIC retirement plans come with an inbuilt life insurance cover. This not only provides financial security to the family in case of the policyholder’s demise but also adds an extra layer of protection to the retirement corpus.
Choosing LIC for retirement planning in India is a prudent decision backed by decades of credibility and a commitment to policyholder welfare. The stability, diverse range of plans, guaranteed returns, tax benefits, and flexibility make LIC a reliable partner in securing a financially sound and stress-free retirement. As individuals embark on the journey towards retirement, opting for LIC can be a strategic step towards a future filled with financial stability and peace of mind.
LIC PENSION PLANS: Best LIC Retirement Schemes in India
LIC New Pension Plus Plan
Key Features:
- This plan permits subscribers to design their future Pension by their own.
- For subscribing, age limit is 25-75 years.
- Premium Option is either Regular Premium or Single Premium.
- Regular Premium includes Rs 3000/- per month. Single premium: Rs 100000/- only.
- In Regular premium, if someone pays complete annual premium i.e., Rs 36000/- at one time only, LIC offers a discount of Rs 6000/-. Therefore, need to pay only Rs 30000/-.
- Subscribers can select a policy term of 10-40 years in Regular as well as Single premium type.
- For designing your pension in this plan LIC provides 03 options to invest your premium. LIC has divided it into 04 categories. Based on risk profile one must select to invest their premium in any of the four categories.
- Click here to subscribe to LIC New Pension Plus Plan.
LIC SIIP Plan
Key Features:
- This plan gives benefits of Pension and Insurance both.
- Provides to choose 04 Mutual Funds option. Also provides freedom to change your mutual funds during policy period.
- After policy completion, you can get complete maturation amount along with interest directly into your account or can obtain it in the form of monthly pension.
- In Insurance part it provides death benefit. Where after demise of the subscriber, LIC provides a big amount as death benefit to the subscriber Family member.
- If policy matures and subscriber is present, then along with the monthly maturation amount, amount payed against insurance part also will be provided by LIC.
- Age Eligibility so subscription: 03 months to 65 years.
- Click here to subscribe to LIC SIIP Plan.
LIC Bima Jyoti
Key Features:
- This is basically a systemic savings plan for pension and Insurance both.
- Provides freedom to select your sum assured and tenure.
- Maturation amount can be opted as monthly or yearly basis.
- Maturity amount = (Sum assured + Guaranteed additions) without any Market Risk.
- In Insurance, Policy provides Insurance Death benefit, through which an amount will be given to the family member upon demise of the subscriber.
- During policy period in case of subscriber demise, Maturity amount = (Sum assured + Guaranteed additions) will be provided to the family member.
- Age Eligibility so subscription: 03 months to 60 years.
- Premium term is always 05 years lesser than Policy term.
- Click here to subscribe to LIC Bima Jyoti.
LIC New Jeevan Shanti
Key Features:
- This is basically a single premium policy plan with minimum premium starting from Rs 1.5 Lakh.
- Minimum age requirement is of 30 years for enrolling this plan.
- Option of selecting Joint- Life policy with your partner. In case of demise of one partner, his/her pension will be continued and given to the other partner.
- After demise of the subscriber, complete premium amount will be payed back to the family.
- Subscriber can start pension payment from 1-12 years period after subscribing the plan. More the gap to start the pension after subscribing/premium payment, more will be the pension amount.
- Click here to subscribe to LIC New Jeevan Shanti.
LIC New Jeevan Akshay VII
Key Features:
- Similar to previous Pension plan, this also is a single premium policy plan with minimum premium starting from Rs 1.5 Lakh.
- Minimum age requirement is of 30 years for enrolling this plan.
- Difference to previous policy is, the feature of flexibility to start the pension payment immediately after subscribing the policy/premium payment.
- Offer 10 different options to choose your pension.
- Click here to subscribe to LIC New Jeevan Akshay VII.
LIC Saral Pension
Key Features:
- Minimum age requirement is of 40 years for enrolling this plan.
- This also is a single premium policy plan with plan need to be selected from 02 different options.
- Option 1: Lifetime Pension. Premium Amount will be reimbursed back to the family, in case of demise of subscriber.
- Option 2: Joint Life Pension. In case of demise of both subscribers, Premium Amount will be reimbursed back to the nominee.
- This plan comes with a special feature. Under critical illness (For example: Cancer, Coma, Kidney Failure, Stroke etc.) benefit, you will get upto 95% premium back.
- Click here to subscribe to LIC Saral Pension.
How To Choose The Right LIC Pension Plan
Understand Your Financial Goals: Before delving into the details of pension plans, it’s essential to have a clear understanding of your financial goals for retirement. Consider factors such as the lifestyle you aspire to maintain, expected healthcare costs, and any other significant expenses. This foundational understanding will guide you in choosing a pension plan that complements your long-term financial objectives.
Types of Pension Plans: Basically two types of pension plans are there: defined benefit plans and defined contribution plans.
1. Defined Benefit Plans: These plans provide a fixed, pre-established benefit determined by factors such as salary history and the duration of employment. They offer a predictable income stream during retirement.
2. Defined Contribution Plans: In these plans, the contributions are made by both the employer and the employee. The retirement benefits depend on the accumulated contributions and the investment performance of the chosen funds.
Understanding the differences between these plans is crucial in making an informed decision based on your preferences and risk tolerance.
Assess Your Risk Tolerance: Consider your risk tolerance when selecting a pension plan. Defined benefit plans typically carry less investment risk for the employee, as the employer assumes the responsibility for funding and managing the plan. On the other hand, defined contribution plans expose the individual to market fluctuations, requiring a higher risk tolerance.
Evaluate Investment Options: If you opt for a defined contribution plan, carefully evaluate the investment options available. Assess the risk and return profiles of the investment funds offered within the plan. Diversification is key to managing risk effectively, so choose a mix of assets that align with your risk tolerance and long-term goals.
Consider Portability: If there’s a possibility of changing employers during your career, consider the portability of the pension plan. Some plans allow for the transfer of accumulated benefits when changing jobs, ensuring continuity in your retirement savings.
Review Fees and Charges: Pension plans often come with fees and charges that can impact the overall returns on your investment. Be sure to review the fee structure of the pension plan, including administrative fees and investment management fees. Opt for plans with transparent and reasonable fees to maximize your retirement savings.
Choosing the right pension plan is a crucial step in securing a comfortable retirement. Always read policy documents completely to know all the if’s and but’s within it. By understanding your financial goals, assessing risk tolerance, and carefully evaluating plan options, you can make an informed decision that aligns with your long-term objectives. Regularly review your pension plan as your financial situation evolves, ensuring that it continues to meet your changing needs and aspirations for a secure retirement.
Below given a reference video for the ease of understanding:
Steps to Purchase LIC Pension Plans
Purchasing a LIC (Life Insurance Corporation of India) pension plan involves several steps. Keep in mind that these steps may vary slightly depending on the specific plan you choose.
Research and Choose a Plan: Explore the various pension plans offered by LIC. Consider factors such as the premium amount, tenure, and benefits provided by each plan. Choose a plan that is suitable for your financial goals and retirement needs.
Check Eligibility: Ensure that you meet the eligibility criteria for the chosen pension plan. Age, income, and other factors may influence eligibility.
Documentation: Gather the necessary documents, including proof of identity, address, age, and income. These documents may include Aadhar card, PAN card, passport, salary slips, etc.
Visit LIC Branch or Agent: Locate a nearby LIC branch or get in touch with a licensed LIC agent. You can also visit the official LIC website to explore and initiate the purchase process online. Schedule a meeting with an LIC representative or agent to discuss the pension plan in detail. Seek clarification on any doubts you may have regarding the plan, premium payments, maturity benefits, and other relevant details.
Customer Reviews and Testimonials: Its always better to review the customer comments and Testimonials, to get update on the real time concerns and benefits.
Fill Application Form: Complete the application form provided by LIC. Ensure that you fill in accurate and truthful information. Properly check all the details before submitting the form.
Submission of Documents: Submit the required documents along with the filled application form. The LIC representative or agent will guide you through the submission process.
Medical Examination (if required): Depending on your age and the sum assured, LIC may require you to undergo a medical examination. Follow the instructions provided by LIC for the medical examination.
Payment of Premium: Pay the initial premium amount as per the payment schedule mentioned in the plan. Choose a suitable payment mode, whether it’s through cheque, online transfer, or any other accepted method.
Policy Issuance: Once all the documentation is verified and the premium is paid, LIC will issue the policy document. Review the policy document carefully and keep it in a safe place.
Regular Monitoring: Keep track of your pension plan, including premium payments and other policy-related information. Inform LIC about any changes in your contact details.
Remember, it’s crucial to understand the terms and conditions of the pension plan thoroughly before making a purchase. If you have any doubts, don’t hesitate to seek guidance from LIC representatives or financial advisors.
Authentic information about Pension Plans
Reference of Studies: Assessing Customer Satisfaction for LIC
Below is a reference study conducted to assess customer satisfaction towards Life Insurance Corporation Of India. Article: Kannan, M. (2018), “Customer satisfaction towards life insurance corporation with special reference to
Chennai City”, International Journal of Development and Sustainability, Vol. 7 No. 4, pp. 1264-1272.
Click here to view the article https://isdsnet.com/ijds-v7n4-01.pdf
Awards/recognitions received by LIC for Its Contribution
LIC has proved itself as a leader in various sorts of Insurance and Pension Plans in India from a long period of around 65 years. Below mentioned are some of the awards recognitions received by LIC for its extraordinary contribution to Insurance and Pension sector.
https://www.iafindia.com/65-years-of-service-and-trust-life-insurance-corporation-of-india/
Frequently Asked Questions
Q1: What is LIC Pension Plan?
LIC Pension Plans are insurance policies designed to provide financial security and a regular income stream during your retirement years. These plans help you accumulate a corpus over the policy term, which is then utilized to generate a steady pension income.
Q2: How do LIC Pension Plans work?
LIC Pension Plans work on the principle of regular premium payments, which accumulate over the policy term. Upon maturity, the accumulated corpus is used to provide a regular pension income to the policyholder during their retirement.
Q3: What types of Pension Plans does LIC offer?
LIC offers various pension plans, including immediate annuity plans, deferred annuity plans, and unit-linked pension plans. These plans cater to different needs and preferences of individuals.
Q4: Can I customize my pension plan with LIC?
Yes, LIC Pension Plans often come with flexibility. You can choose the premium payment frequency, the retirement age, and in some cases, the investment options to suit your financial goals and risk tolerance.
Q5: When does the pension payment start under LIC Pension Plans?
The pension payment typically starts after the completion of the premium payment term or upon reaching the chosen retirement age, depending on the specific terms of the pension plan.
Q6: What happens in case of the policyholder’s demise during the policy term?
In the event of the policyholder’s demise during the policy term, LIC Pension Plans usually offer death benefits to the nominee, providing financial protection to the family.
Q7: Is the pension income taxable?
Yes, pension income received under LIC Pension Plans is generally taxable. However, tax implications may vary, and it is advisable to consult a tax advisor for accurate information based on the prevailing tax laws.
Q8: Can I surrender my LIC Pension Plan before maturity?
Yes, most LIC Pension Plans allow surrender, but it is subject to terms and conditions. Surrendering a policy before maturity may lead to the loss of certain benefits, and surrender charges may apply.
Q9: Are there any loyalty additions or bonuses in LIC Pension Plans?
Some LIC Pension Plans may offer loyalty additions or bonuses based on the company’s performance. These additions enhance the overall corpus and, consequently, the pension income.
Q10: How can I purchase an LIC Pension Plan?
You can purchase an LIC Pension Plan by contacting a licensed LIC agent or visiting the nearest LIC branch. The agent will guide you through the available plans and help you choose the one that best suits your retirement needs.
Conclusion
The Life Insurance Corporation of India (LIC) plays a pivotal role as a pension plan provider in the country, contributing significantly to the financial security of millions of Indians during their retirement years. As the largest and most trusted insurance company in India, LIC offers a range of pension plans that cater to diverse needs and preferences. These plans not only provide a steady income stream after retirement but also offer the assurance of financial stability for individuals and their families. LIC’s pension plans are designed to address the longevity risk, ensuring that retirees can maintain their standard of living even as they age.
The corporation’s widespread presence, coupled with its reputation for reliability, instills confidence in individuals seeking a secure and dependable avenue for their retirement savings. By offering well-structured pension products, LIC continues to play a crucial role in fostering a culture of financial planning and ensuring a dignified and comfortable retirement for the citizens of India.
However, based on lifestyle, risk tolerance, responsibilities and requirements, selection of pension plan varries. Understanding our requirements and selecting the plan accordingly is of upmost importance. Hence, it is always beneficial to reach to a financial advisor and/or LIC agent to take benefit of their expertise while selecting these plans.
Hope, this blog, “LIC Pension Plans: Best LIC Retirement Schemes In India”, will be helpful to explain about Pension Plans provided by LIC.
