Life Insurance Corporation of India (LIC) has recently launched a new plan known as LIC’s New Pension Plus Plan, which is a unit-linked, non-participating individual pension plan. The plan intends to build a corpus through systematic and disciplined savings, which can be converted into regular income after maturity. The plan can be purchased either as a single premium or regular premium payment frequency.
Some of the major key features are:
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The plan, as mentioned above, is a non-participating, unit-linked, individual pension plan. Under a non-linked, non-participating insurance plan, investors do not take part in the insurance company’s business. They have to pay a fixed premium based on the sum assured and receive guaranteed returns.
The new pension plan can be purchased either as a single premium or regular premium payment frequency. For a regular premium policy, the premium will be payable over the term of the policy. The investor can choose to pay the premium amount, policy term, and vesting age.
Under this, policyholders can opt to extend the accumulation period or deferment period within the same policy with the same terms and conditions as the original policy subject under certain conditions.
Investors can choose to invest premiums in one of the four types of investment funds available. Each Premium paid, after deduction of Premium Allocation Charge, shall be utilised to purchase units of the fund chosen by the investor.
The Unit Fund Value shall 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 NAV.
The policyholder can make four free switches for a change of funds in a policy year.
Guaranteed additions shall be payable under an in-force policy as a percentage of one annual premium. The Guaranteed addition on regular premium ranges between 5 per cent and 15.5 per cent. For single premium payable, the premium is up to 5 per cent on completion of a one policy year. The amount of guaranteed additions can be utilised to purchase units as per the opted fund type.
