LIC’s New Pension Plus: The minimum policy term is 10 years while the maximum is 42 years for both single and regular pay frequencies. The LIC website provides an online calculator that can be used by customers to understand what their fund value will be after the end of the policy term, depending on the investment option chosen and the expected return on investment. For example, the LIC calculator shows that the fund value of a monthly premium of Rs 5000 under Pension Growth Fund would be around Rs 23 lakhs over 20 years assuming 8% returns
New Pension Plus from Life Insurance Corporation (LIC) is a non-participating unit-linked, an individual pension plan. In this plan, the accumulated corpus is converted into regular income during the premium paying years. Customers can buy this plan either by paying a single premium or through regular premium payment frequency. Under a regular premium policy, premiums will be payable during the term of the policy, as per the information provided on the LIC website.
Investment options
There are four investment options under this scheme. These options are Pension Growth Fund, Pension Bond Fund, Pension Secured Fund and Pension Balanced Fund. The minimum amount required for single premium payment under the New Pension Plus scheme is Rs 1 lakh. In case of regular premium, the minimum monthly contribution required is Rs.3000 while the minimum annual premium is Rs.30,000. There is no maximum limit. The minimum age required to buy this plan is 25 years while the maximum age is 75 years.
What is the term of the policy
The minimum policy term is 10 years while the maximum is 42 years for both single and regular pay frequencies. The LIC website provides an online calculator that can be used by customers to understand what their fund value will be after the end of the policy term, depending on the investment option chosen and the expected return on investment.
For example, the LIC calculator shows that the fund value of a monthly premium of Rs 5000 under Pension Growth Fund would be around Rs 23 lakhs over 20 years assuming 8% returns. In case of 4% return, the fund value would be around 15 lakhs in 20 years. In 35 years, the fund value can be around Rs 75 lakh at 8% return and around Rs 32 lakh at 4% return.
What will be the fund value with a monthly contribution of Rs 10,000?
For a monthly contribution of Rs 10,000, the fund value at 8% interest would be around Rs 46 lakh after 20 years, and Rs 30 lakh at 4% return. And for a monthly contribution of Rs 10,000, the fund value after 15 years at 8% interest would be around Rs 28 lakh and at 4% return would be around Rs 21 lakh.
Similarly, as per the LIC calculator shows, for a monthly contribution of Rs 5,000, the fund value after 15 years at 8% return will be around Rs 14 lakh and at 4% return will be around Rs 10 lakh. The fund value of a single premium of Rs 50 lakh over 10 years would be approximately Rs 93 lakh.
