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Not At 60, Get Pension At 40; Know Details About The New LIC Scheme

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The Life Insurance Corporation of India (LIC) has come up with a latest Saral Pension Scheme which can be purchased offline as well as online through LIC’s official website- www.licindia.in. The scheme came into effect from July 1, 2021.




This is a Standard Immediate Annuity plan as per the guidelines of Insurance Regulatory and Development Authority of India (IRDAI), which offers same terms and conditions across all the life insurers. The Policyholder has an option to choose type of annuity from two available options on payment of a lump sum amount, read the LIC notification.

The annuity rates are guaranteed at the inception of the policy and annuities are payable throughout the life time of Annuitant(s).

Saral Pension Scheme Annuity Options

The available annuity options under this plan are as under:

Option I: Life Annuity with Return of 100% of Purchase Price.

Option II: Joint Life Last Survivor Annuity with Return of 100% of Purchase Price on death of the last survivor.

Saral Pension Scheme Benefits

Option I

i. The annuity payments shall be made in arrears for as long as the Annuitant is alive, as per the chosen mode of annuity payment.

ii. On death of the annuitant, the annuity payment shall cease immediately and 100% of Purchase Price shall be payable to nominee(s)/legal heirs

Option II

i. The annuity amount shall be paid in arrears for as long as the Annuitant and/or spouse are alive, as per the chosen mode of annuity payment.
ii. On death of the last survivor, the annuity payments will cease immediately and 100% of Purchase Price shall be payable to the nominee(s)/legal heirs.

Eligibility Criteria

The minimum Age for entry to the Saral Pension scheme is 40 years (completed) while the maximum age is 80 years (completed).

The modes of annuity available are yearly, half-yearly, quarterly, and monthly. The annuity shall be payable in arrears i.e. the annuity payment shall commence after 1 year, 6 months, 3 months and 1 month from the date of commencement of policy depending on whether the mode of annuity payment is yearly, half yearly, quarterly and monthly, respectively.

The Maximum Purchase price shall depend on the Minimum Annuity, Option chosen and age of the Annuitant whereas there is no limit on the Maximum Purchase price.
The minimum purchase amount has been set at Rs 1000 per month, Rs 3000 per quarter and Rs 6000 per half year and Rs 12,000 per annum.

Saral Pension Scheme Loan

The Policy loan shall be allowed at any time after six months from the date of commencement of the policy. Under joint life annuity option, the loan can be availed by the Annuitant and on death of Annuitant the same can be availed by the spouse.

The maximum amount of loan that can be granted under the policy shall be such that the effective annual interest amount payable on loan does not exceed 50% of the annual annuity amount payable under the policy. Loan interest will be recovered from annuity amount payable under the policy.

The Loan interest will accrue as per the frequency of annuity payment under the policy and it will be due on the due date of annuity. The loan outstanding shall be recovered from the claim proceeds under the policy. However, the annuitant has the flexibility to repay the loan principal at any time during the currency of the annuity payments.

The loan interest rate for all the loans commencing during the 12 months’ period from May 1 to April 30, shall be annual effective rate equal to 10 year G-Sec rate p.a. plus 200 basis points. The 10 year G-Sec rate shall be as at 1st April of relevant financial year. The calculated interest rate shall be applicable for full term of Loan.

For the loan sanctioned during the 12 months’ period commencing from May 1, 2021 to April 30, 2022, the applicable interest rate is 8.44% p.a. effective for entire term of the loan.

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