LIC Saral Pension is a non-linked, non-participating plan. The buyer needs to buy this annuity with a single premium after which the annuity begins.
The Insurance Regulatory and Development Authority of India (IRDAI) had issued guidelines for standard products for various insurance categories and the Saral Pension scheme is one among them.
The annuity rates in LIC’s Saral Pension scheme are guaranteed at time of inception of the policy and annuities are payable throughout the lifetime of annuitants. LIC is yet to announce the details of annuity rates.
According to the press release by LIC, the Saral Pension schemes comes with two annuity options:
Option 1: Life Annuity with return of 100% of purchase price;
Option 2: Joint life last survivor annuity with return of 100% of purchase price on death of the last survivor.
In a single life plan, the regular annuity is paid till the life time of the covered person. In case of joint life, when a husband and wife buy this plan together, if one person dies the surviving spouse keeps getting regular annuity income till death.
Both the options come with 100% return of the purchase prices, which means that after the death of the annuitant the amount which was used to buy this policy is returned to the nominees. In case of single life, it is returned after death of the covered person, and in case of joint life it happens after the death of the last surviving spouse.
Here are other features of the Saral Pension scheme:
- The minimum annuity is Rs 12, 000 per annum, according to the press release.
- The minimum purchase price will depend on the annuity mode, option chosen and age of the annuitant.
- There is no ceiling on the maximum purchase price. The modes of annuity available are yearly, half- yearly, quarterly, and monthly.
- An incentive for purchase price above Rs 5 lakh is available by way of increase in the annuity rate.
- The plan is available for ages from 40 years to 80 years.
- Policyholder can take a loan against the scheme after six months of commencement of the policy.
- This plan is sold both offline and online. So, you can buy this policy through your LIC agent as well online through the LIC website wwww.licindia.in.
Being a standard product, the terms and conditions of the scheme is the same as that of similar policies offered by other life insurers. The only thing that will vary is the rate of annuity which will be communicated to the policyholder by the insurer at the time of buying the policy. If you are planning to buy a Saral Pension plan do compare the guaranteed annuity rate and go for the one that gives you a better rate.