LIC has launched a New Pension Plus plan. According to the state-run company, LIC New Pension Plus is a non-participating and unit-linked pension plan. The plan is suitable for young persons to make provisions for post-retirement life.
LIC New Pension Plus plan can be purchased either as a single premium payment policy or a regular premium payment. Under the regular premium, the premium shall be payable over the term of the policy. The policyholder will have the option to select the amount of premium payable and policy term subject to the minimum and maximum limits – to be decided as per policy term and vesting age.
LIC New Pension Plus Plan – Regular Income aims to build a corpus by systematic and disciplined savings. The amount on completion of the term can be converted into regular income. For regular income, the policyholder will have to buy an annuity plan.
Under LIC New Pension Plus, the policy buyer will have a choice of investing in one of the four types of funds available. The premium will be subject to a premium allocation charge. The premium will buy the units of funds chosen by the policyholder. LIC will allow four free switches for funds in a policy year.
According to the LIC, under LIC New Pension Plus, guaranteed additions shall be payable under an in-force as a percentage of one annual premium. The guaranteed addition on regular premium ranges from 5 per cent to 15.5 per cent. On a single premium payable, it will be up to 5 per cent on completion of certain years.
The amount of guaranteed actions will be used to purchase units. The NAV will be computed on daily basis.