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LIC’s New Pension Plus plan: 5 things to know

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Life Insurance Corporation of India or LIC has recently introduced a new plan known as LIC’s New Pension Plus. Let’s check the five important features of this plan.

1. This is a non-participating, unit-linked, individual pension plan which helps to build corpus by systematic and disciplined savings that can be converted into regular income by purchase of an annuity plan on completion of term.

2. This plan can be purchased either as single premium or regular premium payment frequency. Under a regular premium policy, the premium will be payable over the term of the policy. The policyholder will get option to choose the amount of premium payable and policy term subject to minimum and maximum limits of premium, policy term and vesting age.

3. Policyholder will also get an option to extend the accumulation period or deferment period within the same policy with the same terms and conditions as the original policy subject to certain conditions.

4. The policyholder has a choice of investing premiums in one of the four types of funds available. Each premium paid by the policyholder shall be subject to Premium Allocation Charge. The balance amount known as allocation rate constitutes that part of premium which is utilized to purchase the units of the fund chosen by the Policyholder in the policy. Four free switches for change of funds in a policy year are available.

5. Guaranteed Additions shall be payable under an in-force policy as a percentage of one annual premium. The Guaranteed addition on regular premium ranges from 5% to 15.5% and on Single premium payable up to 5% on completion of certain policy year. The amount of Guaranteed Additions shall be utilized to purchase units as per the opted fund type.

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