Life Insurance Corporation of India or LIC has recently introduced a new plan which is known as LIC’s New Pension Plus. Let us check out five important features of this plan.
1. It is a non-participating, unit-linked, individual pension plan which helps in building corpus by systematic and disciplined savings which can be converted into regular income by purchasing an annuity plan on completion of the term.
2. This plan can be purchased either as a single premium or as a regular premium paying frequency. Under a regular premium policy, the premium will be payable during the term of the policy. The policyholder will get the option to choose the minimum and maximum limit of premium, amount of premium payable subject to policy term and vesting age and policy term.
3. The policyholder will also have the option to extend the accumulation period or the moratorium period within the same policy with the same terms and conditions as the original policy, subject to certain conditions.
4. The policyholder has the option to invest the premium in one of the four types of funds available. Every premium paid by the policyholder will be subject to premium allocation charges. The balance amount known as the allocation rate constitutes that portion of the premium which is used to buy the units of the fund chosen by the policyholder in the policy. Four free switches are available for money change in a policy year.
5. Guaranteed Additions shall be payable under a current policy as a percentage of an annual premium. Guaranteed additions range from 5% to 15.5% on regular premium and up to 5% on single premium payable on completion of certain policy years. The amount of Guaranteed Addition will be used to purchase units as per the selected fund type.
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