The Life Insurance Corporation of India has introduced a New Pension Plan directed at young individuals who want to build a suitable provision for their retired life.
The non-participating, unit-linked individual pension plan allows for regular income through purchase of an annuity plan on completion of the policy term.
The plan, LIC says, will help the insured individuals build a corpus for retirement by systematic and disciplined savings.
LIC said in a press release that the plan can be purchased either as a single premium or a regular premium policy. Under the regular premium plan, premiums can be paid either monthly, quarterly, half-yearly or annually. The policyholder will have the option to choose the amount of premium payable and the policy term, subject to minimum and maximum limits of premium, policy term and vesting age.
The policy will also offer an option to the life assured 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.
According to the release, the policyholder will also have a choice of investing premiums in one of the four types of funds available. There will also be four free switches available for changing the funds in a policy year.
The minimum policy term is 10 years and the maximum is 42 years. The minimum entry age is 25 years and the maximum entry age is 75 years. The minimum and maximum vesting age are 35 years and 85 years, respectively.
The policy will also provide guaranteed additions to an active policy as a percentage of one annual premium. The guaranteed addition on regular premium will be in the range of 5-15.5 per cent, and on single premium payable up to 5 per cent on completion of certain policy years.
“The amount of guaranteed additions shall be utilised to purchase units as per the opted fund type,” LIC said in the press release.
According to the statement the net asset value (NAV) will be computed on a daily basis and will be based on investment performance, fund management charge of each fund type.
“The life assured shall utilise the proceeds of the policy on vesting (i.e. at the end of the policy term)/on surrender/on discontinuance as per the annuitisation provision. Partial withdrawal of units is allowed after five years,” the release said.
This plan can be purchased online on the LIC website as well as offline through agents or intermediaries.