Life Insurance Corporation of India ,LIC) has launched the new Pension Plus scheme which allows young people to set aside money for their retirement. This unit-linked, non-participating individual pension scheme Helps in building corpus through systematic and disciplined savings, which can be converted into regular income by purchasing an annuity plan on completion of the term. New Pension Plus policy can be purchased offline through touts or other intermediaries and directly online through www.licindia.in website.

“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 LIC press release said.

The policyholder has the option to invest the premium in any one of the four available types of funds.

As per the LIC press release, “Each 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 that can be used in the policy through units of funds chosen by the policyholder. Four free switches are available for money change in a policy year”

Guaranteed Extra
Under an active policy, a guaranteed extra payment will be made as part of the annual premium. “Guaranteed additions range from 5% to 15.5% on regular premiums, and up to 5% on single premiums, payable at the end of a specific policy year. The amount of Guaranteed Addition will be used for

The NAV will be calculated daily and will be based on the investment performance as well as the fund management charges for each fund type.

“The Life Assured shall utilize the proceeds of the policy on vesting (i.e. at the end of the policy term) / on surrender / on closure as per the annuity provision. Partial withdrawal of units is allowed after 5 years,” LIC said.