Formula
F′ = F + P × (1 − at) − A
F = F′ × (1 + i)1/12 × [2 − (1 + f)1/12]
where
- F
- fund value, worked out each month
- P
- the premium, added in the months it is paid
- at
- premium allocation charge in policy year t
- A
- monthly policy administration charge
- i
- assumed gross return, 4% or 8% a year as IRDAI prescribes for illustrations
- f
- the fund's management charge a year
Guaranteed additions are credited at the end of the policy years LIC names. This plan has no mortality charge. Neither rate is guaranteed; the fund can earn more or less.
In short (tl;dr)
New Pension Plus builds a retirement corpus in one of four pension funds, from a single premium of Rs 1,00,000 or regular premiums from Rs 30,000 a year (Rs 3,000 a month). LIC adds guaranteed additions at years 6 and 10 and every year from year 11. At vesting you can take up to 60% as a lump sum and must use the rest to buy an annuity.
What LIC New Pension Plus is
The plan runs for 10 to 42 years and vests between ages 35 and 85. There is no life cover charge: the death benefit is simply the higher of the fund value and 105% of premiums paid.
Offline, a regular premium below Rs 50,000 a year loses 7% to allocation in year 1, 4.5% in years 2 to 5 and 3.5% after that; from Rs 50,000 the later rates drop to 4% and 3%. A single premium pays 3.3% once. A small policy administration charge applies only in the first five years, and every fund charges 1.35% a year.
Guaranteed additions grow with the term. On a regular premium they are 5% of one annual premium at year 6, 10% at year 10, then every year 4% (years 11 to 15) rising in steps to 15.5% (years 41 and 42). Single premium policies get 4%, 5% and then 1.25% to 4.5% of the premium a year.
This calculator stops at the fund value on the vesting date. The pension it buys depends on LIC's annuity rates at that time.
LIC lists this plan as on sale, with a plan page and an October 2024 policy document under UIN 512L347V01, and that is the basis for calling it on sale here. Its list of plans withdrawn in 2024-25 also names Plan 867 under the same UIN, and LIC does not say why. If you are buying, confirm with LIC or your agent that it is still offered.
- Single premium from Rs 1,00,000 or regular from Rs 30,000 a year
- Terms of 10 to 42 years, vesting at 35 to 85
- Guaranteed additions at year 6 (5% of a year's premium), year 10 (10%) and every year from year 11
- No mortality charge; admin charge only in years 1 to 5
- Up to 60% commutable at vesting
Who can buy it
| Entry age | 25 years (last birthday) to 75 (last birthday) |
|---|---|
| Vesting age | 35 to 85 |
| Deferment | 10 to 42 years |
| Premium | Single premium, Yearly, Half-yearly, Quarterly, Monthly (NACH); maximum No limit, subject to financial underwriting. |
- Ages are last birthday. Vesting age is 35 to 85 (55 minimum if bought as a QROPS).
- The vesting date can be extended once the life assured is under 60, within the maximum vesting age, keeping the total term at 42 years or less.
Charges that come out of the fund
The premium allocation charge is taken from each premium before it buys units:
| Policy year | Through an agent | Online |
|---|---|---|
| 1 | 3.3% | 1.5% |
| 2 onwards | 0% | 0% |
| Fund | Fund management charge | Equity |
|---|---|---|
| Pension Bond Fund SFIN ULIF00101/02/22LICPENFBND512 | 1.35% a year | Nil |
| Pension Secured Fund SFIN ULIF00201/02/22LICPENFSEC512 | 1.35% a year | 10% to 50% |
| Pension Balanced Fund SFIN ULIF00301/02/22LICPENFBAL512 | 1.35% a year | 30% to 70% |
| Pension Growth Fund SFIN ULIF00401/02/22LICPENFGRW512 | 1.35% a year | 40% to 100% |
There is no mortality charge. Switching: 4 free a year, then ₹100 each. Partial withdrawal: ₹100. GST applies to charges at the prevailing rate. LIC's illustration says it is currently exempted.
- Premium allocation charge not more than 12.5% of annualized premium in any year
- Policy administration charge not more than Rs 500 a month
- Partial withdrawal, switching and miscellaneous charges not more than Rs 500 each
- Fund management and discontinuance charges within IRDAI limits
What it pays
On death. The higher of the fund value and 105% of premiums paid, less partial withdrawals in the two years before death.
At vesting. The fund value at vesting, of which up to 60% can be taken as cash and the rest must buy an annuity.
There is a 5-year lock-in: nothing can be withdrawn and a discontinued policy's money sits in the Pension Discontinued Fund until it ends.
- Allowed after the 5-year lock-in, at most 3 times, only for children's education or marriage, a first home, critical illness, disability, skilling, starting a venture, or other reasons IRDAI allows.
- Each withdrawal at most 10%, 15% or 25% of the fund: regular AP below Rs 50,000 / Rs 50,000 to below Rs 1,00,000 / Rs 1,00,000 and above; single SP below Rs 2,00,000 / Rs 2,00,000 to below Rs 5,00,000 / Rs 5,00,000 and above.
- The fund left must be at least one annualized premium (regular) or 30% of the single premium.
LIC's own illustration, run through this calculator
LIC's brochure prints a benefit illustration for age 30, 42-year term, rs 30,000 yearly, offline. The same inputs through this calculator give these fund values:
| Year | LIC at 4% | This calculator | LIC at 8% | This calculator |
|---|---|---|---|---|
| 6 | ₹1,85,764 | ₹1,85,764 | ₹2,12,680 | ₹2,12,680 |
| 10 | ₹3,32,521 | ₹3,32,521 | ₹4,13,298 | ₹4,13,299 |
| 15 | ₹5,41,121 | ₹5,41,121 | ₹7,50,541 | ₹7,50,541 |
| 20 | ₹7,80,809 | ₹7,80,809 | ₹12,16,456 | ₹12,16,456 |
| 25 | ₹10,55,865 | ₹10,55,866 | ₹18,59,161 | ₹18,59,161 |
| 30 | ₹13,71,554 | ₹13,71,554 | ₹27,45,191 | ₹27,45,191 |
| 35 | ₹17,33,863 | ₹17,33,863 | ₹39,65,962 | ₹39,65,962 |
| 40 | ₹21,49,607 | ₹21,49,607 | ₹56,47,075 | ₹56,47,075 |
| 42 | ₹23,33,031 | ₹23,33,031 | ₹64,85,578 | ₹64,85,578 |
Fund values at the end of each policy year; the final year is the maturity value. A difference of a rupee is rounding in LIC's printed table.
Good for, and what to watch
Good for. Someone saving for retirement over a long horizon who wants market-linked growth and is comfortable converting most of the corpus into a pension.
Watch out. At least 40% of the corpus must buy an annuity at vesting, and surrender after five years is also paid as an annuity. Withdrawals are limited to three, and only for listed reasons.
Sources: LIC's page for this plan, sales brochure (PDF) and policy document (PDF).
Other unit linked plans: Nivesh Plus, Index Plus.
LIC New Pension Plus: common questions
What does LIC's example show for New Pension Plus?
A 30 year old paying Rs 30,000 a year for 42 years builds Rs 23,33,031 at 4% gross or Rs 64,85,578 at 8%. A single premium of Rs 1,00,000 over the same term grows to Rs 4,05,343 or Rs 16,15,758.
How much pension would that buy?
LIC quotes Rs 2,79,130 a year at 4% and Rs 7,79,262 at 8% for the regular premium example, using its current immediate annuity rates, a life annuity and no commutation. Rates at your vesting date will differ.
Is there life cover?
Only a floor: on death before vesting the nominee gets the higher of the fund value and 105% of premiums paid. There is no mortality charge.
Can I withdraw before vesting?
After five years, up to three times, for reasons such as children's education or marriage, a first home or critical illness. Each withdrawal is capped at 10% to 25% of the fund depending on premium size.
Spot something wrong?
If a figure on this page disagrees with an LIC premium notice, bonus statement or benefit illustration, tell us and we will check it against the brochure. Anything else you think this page gets wrong is just as welcome.