The Life Insurance Corporation (LIC) of India has launched a new unit-linked, non-participating individual pension plan. Named the New Pension Plan, it promises to help customers build a sizeable corpus through systematic and disciplined savings, which can be converted into a regular plan after maturity. Buyers can purchase the plan either as a single premium or regular premium payment option.
In case of regular premium, the premium will be payable over the policy term. The investor can choose the premium amount, policy term, as well as the vesting age.
According to LIC, policyholders can also extend the accumulation or deferment period within the same policy with the same terms and conditions as the original policy, subject to certain conditions.
One of the key features of the New Pension Plan, LIC says, is that policyholders just need to pay a fixed premium based on the sum assured, and receive guaranteed returns on maturity.
Policyholders can also choose to invest the policy premium in one of the four types of investment funds available. Each premium paid, after deduction of the premium allocation charge, shall be utilised to purchase units of the fund chosen by the investor at the time of buying the policy, LIC said.
According to LIC, the unit fund value will be subject to deduction of various other charges either as cancellation of a number of units, or by adjusting the net asset value (NAV). The value of units may increase or decrease, depending on the NAV, LIC said.
The policyholder can also make four free switches for changing fund allocation in a policy year.
LIC further said that the guaranteed addition on regular premium ranges between five and 15.5 per cent. For a single premium payable, the premium is up to five per cent on completion of one policy year. The amount of guaranteed additions can be utilised to purchase units according to the opted fund type, LIC added.
Incidentally, LIC had launched a new version of the LIC Saral Pension Plan in August this year. This was also a non-linked, non-participating, single premium, individual immediate annuity plan. This was a standard immediate annuity plan and gave the policyholder an option to choose the type of annuity from two available options on payment of a lump sum amount.
