Ultimate Guide to LIC’s Smart Pension Plan 879 – Features & Benefits for a Secure Future
Retirement is a phase where financial security is of utmost importance. LIC, India’s trusted insurer, has launched the Smart Pension Plan, offering multiple annuity options to ensure a stable and secure retirement. In this detailed guide, we will explore the features, benefits, annuity options, eligibility criteria, and how you can choose the right plan for your needs.
Table of Contents
What is LIC's Smart Pension Plan?
The Smart Pension Plan is a non-linked, non-participating immediate annuity plan by LIC that provides a regular pension (annuity) for life. Depending on your financial goals and needs, you can select from a variety of annuity options that provide either fixed or increasing income, guaranteed payout periods, or the return of the purchase price.
Key Features of LIC's Smart Pension Plan
Immediate annuity
Start receiving pension payments immediately after investing.
Flexible annuity options
Choose from multiple annuity plans tailored for different needs.
Lifetime income security
Receive annuity payments for life.
Return of purchase price options
There are options with return the initial purchase amount to the nominee.
Inflation protection
Options C1 and C2 offer increasing annuity at 3% and 6% respectively.
Joint life options
Cover spouse and ensure income continues after your passing.(Options G to J)
Tax Benefits
Enjoy tax-free annuity as per applicable income tax rules
Eligibility conditions and restrictions for Smart Pension -879 Plan
| Eligibility Criteria | Details |
|---|---|
| Minimum Entry Age | 18 years |
| Maximum Entry Age | 85 years (100 Years for Option F) |
| Minimum Purchase Price | The minimum purchase price is ₹1,00,000, subject to the following minimum annuity payout requirements: • ₹1,000 per month • ₹3,000 per quarter • ₹6,000 per half-year • ₹12,000 per year The final minimum purchase price will depend on meeting these annuity payout requirements. |
| Maximum Purchase Price | No limit |
| Annuity Payment Modes | Monthly, Quarterly, Half-Yearly, Yearly |
| Liquidity Option | Available under Annuity Options F and J after 5 years |
| Joint Life Eligibility | Available for Spouse, Parents, Children, Grandparents, Siblings, Parent-in-law |
| Deferred Annuity Available? | No, this is an Immediate Annuity Plan |
| Tax Benefits | As per existing tax rebates and rules |
Smart Pension - Available annuity options
1. Option A – Life Annuity
Regular annuity payments continue as long as the annuitant is alive.
No return of purchase price upon death.
2. Options B1-B4 – Guaranteed Income for a Fixed Period + Life Annuity
Guaranteed annuity payout for 5, 10, 15, or 20 years even if the annuitant passes away.
After the guaranteed period, the annuitant continues to receive annuity for life.
3. Options C1-C2 – Increasing Annuity
Annuity increases annually by 3% or 6% to counter inflation.
Helps in maintaining purchasing power over time.
4. Option D – Life Annuity + Return of Balance Purchase Price
Annuity payments for life.
If the annuitant passes away before the purchase price is fully utilized, the balance is refunded to the nominee.
5. Options E1-E5 – Partial Return of Purchase Price at Specific Ages
E1, E2: Partial return at age 75.
E3, E4: Partial return at age 80.
E5: 5% of the purchase price returned annually from age 76 to 95.
6. Option F – Life Annuity + Full Return of Purchase Price
Provides annuity for life.
Full purchase price returned to the nominee after the annuitant’s passing.
7. Option G1 – Joint Life Annuity with 50% Annuity to Secondary Annuitant
On the death of the Primary Annuitant, 50% of the annuity is paid to the surviving Secondary Annuitant.
The annuity payments cease after the Secondary Annuitant’s passing.
8. Option G2 – Joint Life Annuity with 100% Annuity to Secondary Annuitant
On the death of the Primary Annuitant, 100% of the annuity is paid to the surviving Secondary Annuitant.
The annuity payments cease after the Secondary Annuitant’s passing.
9. Option H1 – Increasing Joint Life Annuity (3%) + 50% Annuity to Secondary Annuitant
Annuity increases annually by 3%.
On the Primary Annuitant’s death, 50% annuity is given to the Secondary Annuitant.
10. Option H2 – Increasing Joint Life Annuity (6%) + 50% Annuity to Secondary Annuitant
Annuity increases annually by 6%.
On the Primary Annuitant’s death, 50% annuity is given to the Secondary Annuitant.
11. Option I1 – Increasing Joint Life Annuity (3%) + 100% Annuity to Secondary Annuitant Annuity increases annually by 3%.
Annuity increases annually by 3%.
On the Primary Annuitant’s death, 100% annuity continues for the Secondary Annuitant.
12. Option I2 – Increasing Joint Life Annuity (6%) + 100% Annuity to Secondary Annuitant
Annuity increases annually by 6%.
On the Primary Annuitant’s death, 100% annuity continues for the Secondary Annuitant.
13. Option J – Joint Life Annuity with Full Return of Purchase Price
100% annuity continues for the surviving annuitant.
On the death of the last survivor, purchase price is refunded to the nominee.
Online Calculator Smart Pension - Plan 879
Plan 879 Online Calculator helps you determine the actual pension payable based on your selected option, premium amount, and actual age. By simply entering your details, you can instantly calculate the pension benefits and compare different annuity options to make an informed decision.
To help you better understand this plan’s benefits, we have created a detailed video covering all its aspects, including features, annuity options, and how it can secure your financial future. Watch the full video to get complete insights into the plan.
Incentives Under LIC’s Smart Pension Plan
Incentives for Existing Policyholders
A 0.15% increase in the annuity rate is available for:
• Policyholders whose policies matured within one year before purchasing this plan.
• Nominees/beneficiaries of deceased policyholders (if death was within one year before purchase).
• Existing LIC policyholders with an in-force policy.
• Not applicable for NPS subscribers, Group Business, or purchases from Individual Deferred Annuity/Pension plans.
Incentives for Higher Purchase Price
| Purchase Price (₹) | Annuity Options A, B1-B4, D, E1-E5, F, G1, G2, J (₹ per 1000) | Annuity Options C1, C2, H1, H2, I1, I2 (₹ per 1000) |
|---|---|---|
| 5,00,000 - 9,99,999 | ₹2.30 | ₹1.40 |
| 10,00,000 - 24,99,999 | ₹3.10 | ₹1.80 |
| 25,00,000 - 99,99,999 | ₹3.60 | ₹2.10 |
| 1,00,00,000 & above | ₹3.80 | ₹2.30 |
Special Options Under the Plan
Options for Payment of Death Benefit
Available under Annuity Options D, E1-E5, F, and J, annuitants can choose:
• Lumpsum Death Benefit – Nominee(s) receive the full amount in one payment.
• Annuitisation of Death Benefit – The nominee(s) can purchase an Immediate Annuity with a 2.50 percent incentive.
• Installments Over 5, 10, or 15 Years – Instead of a lump sum, the nominee(s) receive periodic payments.
Liquidity Option (For Options F and J)
• Can be exercised after 5 years from the policy’s start.
• Allowed up to 3 times during the policy term.
• Total lump sum withdrawals cannot exceed 60% of the purchase price.
Advanced Annuity Option (For Option J)
• The surviving annuitant can withdraw a discounted cash value of annuity payments over 5 years.
• Must be exercised within one year of the first annuitant’s death.
Annuity Accumulation Option
• Allows annuitants to defer and accumulate annuity payments in blocks of 5 consecutive years.
• Can be exercised up to three times during the policy term.
Option for NPS Subscribers
• As per PFRDA Regulations, NPS subscribers can purchase this plan.
• Government Sector NPS subscribers default to Option J (if spouse survives) or Option F (if no spouse).
Option for Dependents with Disability (Divyangjan)
• Available under Joint Life Annuity Option-G2 or J.
• No minimum age restriction for Divyangjan annuitants.
Option for Overseas Pension Scheme (QROPS)
• Available upon approval by HMRC.
• Minimum age at entry: 55 years.
• If canceled during the free-look period, proceeds must be transferred back to the fund house.
Summary
LIC’s Smart Pension Plan is designed to provide financial security and stability in retirement through a range of annuity options. Whether you prefer fixed annuity payments, increasing income, or return of purchase price, this plan ensures lifelong financial independence.
Key Takeaways:
Offers multiple annuity options catering to different financial needs.
Provides joint annuity benefits for ensuring financial security for dependents.
Incentives available for existing LIC policyholders and higher purchase prices.
Liquidity options and flexible death benefits ensure better financial management.
Tax advantages make it a beneficial choice for retirement planning.
If you are planning for a stress-free retirement with a reliable pension, LIC’s Smart Pension Plan is the perfect choice for you!
Read More – Explore Similar LIC Pension Plans
LIC Jeevan Shanti (Plan No. 850 – Revised)
A deferred annuity plan offering flexible payout options for long-term financial security.
LIC Jeevan Akshay VII (Plan No. 857)
An immediate annuity plan providing multiple payout structures to suit different retirement needs.
LIC Nav Jeevan Shree – (Plan No 911 and 912)
Guaranteed benefit, Single Premium and Limited Premium plan
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