India’s largest life insurer, LIC of India, has launched a new pension scheme, the ‘Smart Pension Plan’ that promises a flexible and secure pension solution to provide financial security post-retirement. Unveiled on February 18, 2025, by M Nagaraju, Secretary, Department of Finance Secretary, this plan is tailored for individuals looking for a steady income stream after retirement.
What is LIC’s Smart Pension Plan?
This is a non-participating, non-linked, individual/group, savings, and immediate annuity plan (Plan No 879). To understand simply, it’s a one-time premium pension plan that starts providing annuity payments immediately after the purchase.
The buyers also have the option to choose between single-life and joint-life annuity options which would ensure financial security for themselves or their spouse.
Here are the key features of this pension plan:
Immediate Annuity With Single Premium: This plan requires a one-time premium payment from the policyholder, after which the annuity payments will begin immediately.
Annuity Option: It also comes with a wide range of annuity options that would suit the needs of customer based on their preferences. For instance, the customers can opt for a pension that covers either themselves (single life) or both the policyholder and their spouse (joint life).
Flexibility of Entry Age: The minimum entry age for this plan is 18 years and the maximum limit varies from 65 to 100 years depending on the annuity option you choose.
Benefits For LIC Policyholders: Without disclosing much, the official release states that existing LIC policyholders as well as beneficiaries of deceased policyholders will be able to avail of ‘enhanced annuity rates’.
Benefits For NPS Subscribers: There is a special feature for National Pension System (NPS) subscribers to get immediate annuity by choosing this option.
Additionally, this plan provides;
Flexible Liquidity Options i.e., partial or full withdrawal as per terms of policy
Minimum Purchase Price of Rs 1 lakh with incentives for higher purchase price
Modes of Annuity Payments which range from yearly, half-yearly, quarterly, or monthly.
Annuity installment as per the chosen mode of annuity payment will be calculated.
Loan Facility wherein policyholders can avail of a loan after three months from policy issuance or post the free-look period.
Moreover, the option to take the plan for the benefit of a dependent person with a disability (Divyangjan) life is available under this plan.
Payouts and Death Benefits
On Survival of the annuitant: The options available for survival of the annuitant will depend on the Annuity option chosen by them at the inception of the policy.
On the death of the annuitant (Primary or Secondary- as the case may be): Here, the nominee will receive benefits as per the chosen payout method. The options chosen for payment of death benefit may be Lumpsum or annuitisation of Death Benefit or Installments or Liquidity option or Advanced Annuity option or Annuity Accumulation option.
Where to buy this plan?
It can be purchased in both online and offline mode;
For the offline mode, you can buy it through an agent or other Intermediaries including ‘Point of Sales Persons-Life Insurance (POSP-LI)’ or Common Public Service Centers (CPSC-SPV)
For Online mode, buyers can directly visit the official website www.licindia.in for details.
