On the occasion of 54th Anniversary of the Corporation, LIC has announced launch of its new product - LIC's PENSION PLUS with effect from 2nd September 2010. LIC's Pension Plus is a unit linked deferred pension plan, which provides the customer a minimum guarantee on the gross premiums paid. The plan is without any life cover. The customer has a choice of investing the premiums in one of the two types of investment funds available. Premiums paid after deduction of allocation charge will purchase units of the Fund type chosen. Within a given policy year 2 switches are allowed free of charge.
Anybody between ages 18 - 75 years can buy this policy. Minimum
Deferment Term allowed is 10 years. Minimum Vesting Age is 40 years
while the Maximum Vesting Age allowed is 85 years.
On surviving to the date of vesting, the higher of Policyholder's Fund
Value or Guaranteed Maturity Proceeds will compulsorily be utilized to
provide an annuity based on the then prevailing immediate annuity rates.
However, the policyholder may opt to commute up to one-third of the
Benefit to be paid as a lump sum.
Premiums can be paid through regular modes at yearly, half-yearly or
quarterly or monthly (through ECS mode only) intervals over the term of
the policy. Single premium payment facility is also allowed. The minimum
regular premium that can be opted through modes other the ECS mode is
Rs 15000 per annum while the maximum allowed for regular premium is Rs
1,00,000. For the ECS mode of payment, the minimum premium is Rs 1500
per month. The minimum single premium that can be paid is Rs 30000 while
there is no limit on the upper side. Top up facility is available under
this plan which enables the customer to pay additional premiums in multiples of Rs 1000/- without any limit at anytime, during the term of the policy.
The unique feature of the plan is the minimum guarantee on contributions that if offers. As per the plan, if all due premiums are paid till maturity, a guaranteed interest shall accrue on the gross premium, including Top-up premiums if any. The guaranteed interest rate
shall be 50 basis points above the average of the reverse repo rate.
However, it shall be subject to a maximum of 6% and a minimum of 3%.
Currently, a minimum guaranteed rate of 4.5% p.a. would be available on
all premiums received up to 31st March, 2011.
In case of Death, The Policyholder's Fund Value shall be payable either
in a lump sum or as an annuity, as desired by the nominee. The amount of
annuity will depend on the payable lump sum and the then prevailing
immediate annuity rates under the annuity option chosen.
In case of surrender of the policy within 5 years from the date of commencement of policy,
the Policyholder's Fund Value after deducting the Discontinuance Charge
shall be converted into monetary terms. The Proceeds of the
Discontinued Policy shall be utilized for payment of an annuity, on completion of 5 years from the date of commencement of policy. In case, however, the policy is surrendered after 5 years from the date of commencement of policy,
the Policyholder's Fund Value, as at the date of surrender, shall be
utilized for payment of an annuity and there will no Discontinuance
Charge.
