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LIC Smart Pension Scheme 2025: Eligibility, Benefits & Application Steps

KSA Web Desk
By KSA Web Desk
LIC Smart Pension Scheme 2025: Eligibility, Benefits & Application Steps

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The Life Insurance Corporation of India (LIC) has launched a new pension plan on 18 February 2025 known as Smart Pension Plan. The Smart Pension Plan is designed to offer retirees a reliable and steady income after retirement.

Know all about the LIC Smart Pension Plan, its features, benefits and how to buy it.

LIC Smart Pension Plan Details

Here are the details of the LIC Smart Pension Plan:

Scheme NameLIC Smart Pension Plan
Scheme FeatureNon-participating, non-linked, individual/ group, savings, immediate annuity plan
Minimum Purchase PriceRs. 1 lakh
Mode of Premium PaymentSingle premium
Annuity TypeSingle-Life Annuity and Joint-Life Annuity
Annuity PaymentYearly, half-yearly, quarterly or monthly
Withdrawal OptionPartial or full withdrawal, as per plan terms
Loan FacilityAvailable after 3 months from the policy completion date or after the expiry of the free look period, whichever is later for certain annuity options

What is Smart Pension LIC Scheme Plan?

The Smart Pension Plan is a retirement plan that offers policyholders a lifetime of financial security and a stress-free retirement life. Under this plan, the policyholders pay a lumpsum and receive a fixed and guaranteed pension for life.

This plan is a non-participating, non-linked, individual or group, savings, immediate annuity plan as explained below:

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  • Non-Participating: Policyholders will not receive a share of LIC’s profits, such as bonuses or dividends. The returns under this plan are fixed and decided when purchasing the plan, and any discretionary benefits, such as bonuses or surplus shares, are not offered.
  • Non-Linked: The plan is not linked to the stock market; thus, its returns are stable and are not affected by market movement.
  • Individual or Group Savings: The plan can be purchased by an individual (single person) or group (jointly by self, spouse, parents or siblings).
  • Savings: This plan helps secure future income after retirement by investing a lump sum amount.
  • Immediate Annuity: Once the policyholders pay the premium, they receive a regular pension (annuity) based on the chosen option.

Under this plan, the annuity rates are guaranteed at the policy’s purchase and payable on death or survival as per the chosen annuity option. Thus, a fixed benefit is ensured for the policyholder or their family, making it an attractive option for those looking for a predictable and reliable income stream after retirement.

Smart Pension Plan features

  • Single premium and immediate annuity plan
  • Availability of a wide range of annuity options as per customers’ needs, such as:
    • Advanced annuity option
    • Liquidity option
    • Annuity accumulation option
  • Flexibility to choose either single-life annuity or joint-life annuity options, making it versatile for families seeking to secure financial stability for their loved ones
  • Higher purchase price incentives, boosting benefits for larger investments
  • Incentive for existing policyholders and nominees or beneficiaries of the deceased policyholders through enhanced annuity rates
  • Availability of tax benefits under Section 80C of the Income Tax Act on buying the policy for self and spouse
  • Availability of various liquidity options such as partial or full withdrawal as per terms
  • Various options for annuity payments, such as:
    • Yearly
    • Half-yearly
    • Quarterly
    • Monthly

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  • Minimum annuity payments are as follows:
    • Rs. 1,000 per month
    • Rs. 3,000 per quarter
    • Rs. 6,000 per half-year
    • Rs. 12,000 per year
  • Special feature to take immediate annuity by NPS (National Pension Scheme) subscribers
  • Availability of the option to purchase the plan for the benefit of a dependant person with a disability (Divyangjan) life
  • Availability of policy loan at any time after three months from the policy completion date (date of issuance of policy) or after the expiry of the free look period, whichever is later for specified annuity options

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Smart Pension Plan eligibility

  • The minimum entry age of the person must be 18 years.
  • The maximum entry age ranges from 65 to 100 years, depending on the annuity option.
  • Joint-life annuities can be taken between two lineal descendants or ascendants of a family (grandparent, parent, children, grandchildren) or siblings or spouses or parents-in-law.
  • The minimum purchase amount is Rs. 1 lakh. However, the minimum purchase amount can be increased to meet the minimum annuity amount.
  • The minimum purchase amount is Rs. 50,000 if it is purchased for the benefit of a dependant person with a disability (Divyangjan) life.
  • For NPS subscribers exiting from NPS, the minimum purchase amount will be Rs. 50,000 onwards as per the PFRDA rules and regulations.
  • There is no maximum purchase amount. However, the maximum purchase price is subject to the company’s underwriting policy.

Smart Pension flexible annuity options

The LIC Smart Pension Plan provides the option of a single-life annuity or joint-life annuity. If the policyholder chooses a single-life annuity, the plan provides payments for the annuitant’s lifetime. In a joint-life annuity, payments continue for the primary and secondary annuitants.

Here are the single-life annuity options a policyholder can choose under the Smart Pension Plan:

Annuity OptionParticulars
Option ALife annuity
Option B1Annuity certain for 5 years and life thereafter
Option B2Annuity certain for 10 years and life thereafter
Option B3Annuity certain for 15 years and life thereafter
Option B4Annuity certain for 20 years and life thereafter
Option C1Life annuity increasing at a simple rate of 3% p.a.
Option C2Life annuity increasing at a simple rate of 6% p.a.
Option DLife annuity with a return of balance purchase price
Option E1Life annuity with a 50% return of purchase price after attaining 75 years
Option E2Life annuity with a 100% return of purchase price after attaining 75 years
Option E3Life annuity with a 50% return of purchase price after attaining 80 years
Option E4Life annuity with a 100% return of purchase price after attaining 80 years
Option E5Life annuity with a 5% return of purchase price every year after attaining the age of 76 years to 95 years
Option FLife annuity with a return of purchase price

Below are the joint-life annuity options to choose under the Smart Pension Plan:

Annuity OptionParticulars
Option G1Joint life annuity with 50% of the annuity to the secondary annuitant upon death of the primary annuitant
Option G2Joint life annuity with 100% of the annuity to the secondary annuitant upon death of the primary annuitant
Option H1Joint life annuity increasing at a simple rate of 3% p.a. with 50% of the annuity to the secondary annuitant upon death of the primary annuitant
Option H2Joint life annuity increasing at a simple rate of 6% p.a. with 50% of the annuity to the secondary annuitant upon death of the primary annuitant
Option I1Joint life annuity increasing at a simple rate of 3% p.a. with 100% of the annuity to the secondary annuitant upon death of the primary annuitant
Option I2Joint life annuity increasing at a simple rate of 6% p.a. with 100% of the annuity to the secondary annuitant upon death of the primary annuitant
Option JJoint life annuity with 100% of the annuity payable till one of the annuitant survives and return of purchase price upon the death of the last survivor

However, once the policyholder selects the annuity option, it cannot be altered.

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Smart Pension Plan benefits

  • The smart pension plan provides guaranteed income since there are no market-linked risks.
  • It provides diverse annuity choices, where policyholders can choose an annuity option that suits their financial needs.
  • It provides liquidity options as partial withdrawal is permitted in certain cases. Thus, policyholders can withdraw money in case of emergencies.
  • It provides special benefits and incentives for existing LIC policyholders.
  • It can be easily purchased online or offline.
  • It can be used for NPS retirement corpus annuitisation.

LIC Smart Pension Plan – survival of annuitant

The benefits provided under the LIC Smart Pension Plan for the annuitant’s survival vary according to the chosen annuity option. They could be regular payouts for life or other specific benefits as per the plan’s terms.

The benefits payable on survival of the annuitant for different annuity options are as follows:

Annuity OptionBenefits
Option A, Option B1, Option B2, Option B3, Option B4, Option D, Option FAnnuity payments will be made in arrears till the annuitant is alive.
Option C1Annuity payments will be made in arrears till the annuitant is alive. Additionally, annuity payments will increase at a simple rate of 3% p.a. for each completed policy year.
Option C2Annuity payments will be made in arrears till the annuitant is alive. Additionally, annuity payments will increase at a simple rate of 6% p.a. for each completed policy year.
Option E1Annuity payments will be made in arrears till the annuitant is alive. Additionally, an early return of 50% of the purchase price will be paid upon survival of the annuitant to policy anniversary or immediately upon completion of 75 years.
Option E2Annuity payments will be made in arrears till the annuitant is alive. Additionally, an early return of 100% of the purchase price will be paid upon survival of the annuitant to policy anniversary or immediately upon completion of 75 years.
Option E3Annuity payments will be made in arrears till the annuitant is alive. Additionally, an early return of 50% of the purchase price will be paid upon survival of the annuitant to policy anniversary or immediately upon completion of 80 years.
Option E4Annuity payments will be made in arrears till the annuitant is alive. Additionally, an early return of 100% of the purchase price will be paid upon survival of the annuitant to policy anniversary or immediately upon completion of 80 years.
Option E5Annuity payments will be made in arrears till the annuitant is alive. Additionally, an early return of 5% of the purchase price will be paid upon survival of the annuitant on every policy anniversary coinciding with or immediately upon completion of 75 years to 95 years.
Option G1Annuity payments will be made in arrears till the primary annuitant is alive.
Option G2, Option I1, Option I2, Option JAnnuity payments will be made in arrears until the primary and secondary annuitant are alive.
Option H1Annuity payments will be made in arrears until the primary annuitant is alive. The annuity payments will increase at a simple rate of 3% p.a. for each completed policy year.
Option H2Annuity payments will be made in arrears until the primary annuitant is alive. The annuity payments will increase at a simple rate of 6% p.a. for each completed policy year.

LIC Smart Pension Plan – death of annuitant

The benefit after the annuitant’s death is as per the annuity option chosen by the annuitant. The options selected for payment of death benefit may be lumpsum, annuitisation of death benefit, instalments, liquidity, advanced annuity or annuity accumulation option.

The benefits paid upon the death of the annuitant under different annuity options are as follows:

Annuity OptionBenefits
Option A, Option C1, Option C2Nothing is paid, and the annuity payments will cease immediately.
Option B1If the annuitant dies within 5 years from the date of commencement, the annuity will be paid to the nominee until the expiry of 5 years from the commencement date. After the expiry of 5 years, the annuity payments will immediately cease.
If the annuitant dies after 5 years from the date of commencement, the annuity payments will cease immediately.
Option B2If the annuitant dies within 10 years from the date of commencement, the annuity will be paid to the nominee until the expiry of 10 years from the commencement date. After the expiry of 10 years, the annuity payments will immediately cease.
If the annuitant dies after 10 years from the commencement date, the annuity payments will cease immediately.
Option B3If the annuitant dies within 15 years from the date of commencement, the annuity will be paid to the nominee until the expiry of 15 years from the commencement date. After the expiry of 15 years, the annuity payments will immediately cease.
If the annuitant dies after 15 years from the commencement date, the annuity payments will cease immediately.
Option B4If the annuitant dies within 20 years from the date of commencement, the annuity will be paid to the nominee until the expiry of 20 years from the commencement date. After the expiry of 20 years, the annuity payments will immediately cease.
If the annuitant dies after 20 years from the date of commencement, the annuity payments will cease immediately.
Option DThe annuity payments will cease immediately upon the annuitant’s death. The death benefit equal to the purchase price balance, i.e. [purchase price Less (sum of all annuity payments made till the death date)] will be paid to the nominee. No benefit is paid on death if the sum of all annuity payments made till the death date exceeds the purchase price.
Option E1, Option E3Annuity payments will cease immediately upon the annuitant’s death. The nominee will receive a death benefit equal to the purchase price less the early return of the purchase price paid until the date of death.
Option E2, Option E4, Option E5The annuity payments will cease immediately upon the annuitant’s death. The nominee will receive a death benefit equal to the purchase price less the early return of the purchase price paid until the date of death. No benefit will be paid upon death if 100% of the purchase price has already been paid till the death date.
Option FThe annuity payments will cease immediately upon the annuitant’s death, and the death benefit equal to the purchase price will be payable to the nominee.
Option G1Upon the primary annuitant’s death, 50% of the annuity amount will be paid to the surviving secondary annuitant until he/she is alive. The annuity payments will cease upon the death of the secondary annuitant. If the secondary annuitant dies before the primary annuitant, the annuity payments will continue to be paid to the primary annuitant and will cease upon his/her death.
Option G2Annuity payments will cease immediately, and nothing will be paid upon the death of the last survivor.
Option H1, Option H2Upon the death of the primary annuitant, 50% of the annuity amount payable to the primary annuitant, if he/she had been alive on the due dates of the annuity, will be paid to the surviving secondary annuitant at those respective due dates till he/she is alive. The annuity payments will cease upon the death of the secondary annuitant. If the secondary annuitant dies before the primary annuitant, the annuity payments will continue to be paid to the primary annuitant and will cease upon his/her death.
Option I1Upon the death of the last survivor, the annuity payments will cease immediately, and nothing will be paid. The annuity payments will increase at a simple rate of 3% p.a. for each completed policy year until the primary or secondary annuitant is alive.
Option I2Upon the death of the last survivor, the annuity payments will cease immediately, and nothing will be paid. The annuity payments will increase at a simple rate of 6% p.a. for each completed policy year until the primary or secondary annuitant is alive.
Option JAnnuity payments will cease immediately upon the death of the last survivor. The purchase price will be paid to the nominee.

How to buy LIC Smart Pension Plan?

The LIC Smart Pension Plan can be purchased online or offline.

Online Process:

  • Visit the LIC website.
  • Click on ‘Customer’.
  • Enter your mobile number, OTP and click ‘Login’.
  • Click on the ‘Buy Online’ button.
  • Click on the ‘Pension’ tab and tick ‘LIC’s Smart Pension’ option.
  • Click the ‘Proceed’ button.
  • The list of required documents will be displayed on the screen. These include income/investment proof, self-cancelled cheque, communication address proof, birth certificate (for minors), and photographs. Ensure that you have these documents ready with you and click ‘Proceed’.
  • Enter the required details, upload the documents, pay the premium and submit to purchase the policy.

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Offline Process:

You can purchase the plan offline through an agent or other intermediaries, such as Point of Sales Persons-Life Insurance (POSP-LI) or Common Public Service Centers (CPSC-SPV).

The LIC Smart Pension Plan is a new plan offering tailored retirement solutions for individuals seeking financial stability during their post-retirement years. It provides various annuity options to choose from as per the policyholder’s convenience. It ensures financial freedom post-retirement by providing a lifetime of steady income during stress-free golden years of an individual.

KSA Web Desk
KSA Web Deskhttps://kashmirstudentalerts.com
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