Formula
Y = a × Q / 1000
Half-yearly = 0.98 × Y / 2
Quarterly = 0.97 × Y / 4
Monthly = 0.96 × Y / 12
where
- Y
- yearly annuity
- a
- annuity rate, ₹ a year per ₹1,000 of purchase price, for your age and annuity option
- Q
- purchase price
The more often the annuity is paid, the smaller each instalment is against a straight share of the yearly amount.
*Source LIC Saral Pension brochure (PDF)
In short (tl;dr)
Saral Pension is the standard immediate annuity the IRDAI requires every life insurer to offer. You pay one purchase price, the pension starts straight away and is fixed for life, and the full purchase price goes to your nominee on death.
What is LIC Saral Pension?
Saral Pension (Plan 862) is a non-participating, non-linked, single premium immediate annuity. Its terms are set by the IRDAI and are the same at every insurer, so what differs between companies is the annuity rate. The rate is fixed on the day you buy and does not change afterwards.
There are two options and both return the purchase price. Option I pays the annuity for the annuitant's life and then 100% of the purchase price to the nominee. Option II pays it for as long as either the annuitant or their spouse is alive, then the purchase price on the second death. The joint option is open to a spouse only, and the option cannot be changed once chosen.
LIC's illustration for a 60-year-old paying ₹10 lakh, yearly mode, is ₹62,300 a year under Option I and ₹61,600 under Option II with a 55-year-old spouse. The annuity is paid in arrears: the first payment comes a year, six months, three months or one month after the start, by mode.
Larger purchases earn a higher rate, in three slabs from ₹5 lakh, ₹10 lakh and ₹25 lakh, and the uplift is bigger for less frequent payment modes. Buying online adds 2% to the annuity. LIC does not print the slab uplifts, so this calculator holds the ₹10 lakh rate at every purchase price.
Key features
- Standard product with identical terms at every insurer, set by the IRDAI
- Two options, single life or joint life with a spouse, both returning 100% of the purchase price
- Entry age 40 to 80, for the spouse as well under Option II
- Minimum annuity ₹1,000 a month, ₹3,000 a quarter, ₹6,000 a half-year or ₹12,000 a year; no maximum purchase price
- Higher rates from ₹5 lakh, ₹10 lakh and ₹25 lakh, and 2% more when bought online
- Loan from six months, and surrender at 95% of the purchase price on a listed critical illness
Saral Pension at a glance
- Plan number
- 862
- Category
- Pension & Annuity
- Entry age
- 40 to 80 years
- Minimum purchase price
- ₹2,30,000
- Maximum maturity age
- 100 years
- UIN
- 512N342V05
We checked the plan number and UIN above against LIC's own page for this plan on 2026-10-02. Check it on licindia.in
What are the benefits of LIC Saral Pension?
What does LIC Saral Pension pay on death?
100% of the purchase price, paid to the nominee or legal heirs. Under Option I it is paid on the annuitant's death; under Option II, on the death of the last survivor, and the annuity continues to the surviving spouse until then. Any outstanding policy loan and interest are deducted.
What do you get at vesting?
There is no maturity. The annuity is paid for life.
Who is LIC Saral Pension for?
A retiree who wants a guaranteed income for life and wants the capital passed on intact, and who would rather buy a contract whose terms are identical across insurers so only the rate needs comparing.
What should you watch out for?
Both options return the purchase price, which costs income: LIC's ₹62,300 on ₹10 lakh at 60 compares with ₹86,100 under Jeevan Akshay-VII's life-only Option A at the same age. The annuity is level for life, and it is taxable as income.
Who can take LIC Saral Pension?
Age to buy the annuity
- Minimum
- 40 years
- Maximum
- 80 years
Purchase price
- Minimum
- ₹2,30,000
- Maximum
- No limit set by LIC
LIC caps this by what underwriting allows rather than with a printed figure. This calculator accepts up to ₹5 Crore.
The calculator applies every limit above. LIC sets them out under "Eligibility Conditions and Other Restrictions" on page 3 of the Saral Pension sales brochure, linked in the form above.
What Saral Pension pays if you surrender
Surrender is allowed only after six months from the start, and only if the annuitant, the spouse or one of the annuitant's children is diagnosed with one of the twenty critical illnesses listed in the brochure. LIC then pays 95% of the purchase price, less any outstanding loan and interest, and the policy ends.
Taken from the plan's own brochure rather than modelled, which is why there is no table here: LIC states the percentages for this plan outright, and a percentage of a number you already know needs no calculator.
How this calculator works
Saral Pension is priced here on its own parameters, not a generic formula. We build the plan's full cash-flow schedule, meaning the death benefit in each policy year, every survival payout and the maturity value, then discount it on a basis calibrated to a reference premium for this plan. That reference is checked two ways: against LIC's published tabular rate, and against the return the plan's own benefits imply for the policyholder.
- Reference premium
- Published annuity rates at age 60
- Discount basis
- Solved separately for each annuity option, on LIC (2012-14) Ultimate mortality, to reproduce that option's own published rate at age 60
- GST
- Nil. Individual life insurance premiums have been exempt from GST since 22 September 2025, so the instalments shown are what you actually pay.
Bonus rates are declared annually and are not guaranteed; only the sum assured and any contractual guaranteed additions are. Read our editorial and methodology policyfor the full basis, and confirm every figure with LIC before you buy.
Check the source:Saral Pension on licindia.inLIC valuation and bonus declarationsIRDAI regulations
How LIC Saral Pension compares
The plans people weigh this one against, and what separates each from it.
| Plan | Policy term | You pay for | Cover from | What is different |
|---|---|---|---|---|
| Saral PensionNo. 862 · this page | Not applicable | One premium | ₹2.3 Lakh | The standard immediate annuity every insurer sells: a pension for life, and the purchase price back on death. |
| Jeevan Akshay-VIINo. 857 | Not applicable | One premium | ₹1 Lakh | Hand over a lump sum, start drawing a guaranteed income immediately, for life. |
| Smart PensionNo. 879 | Not applicable | One premium | ₹1 Lakh | LIC's newest immediate annuity, with liquidity features the older plans lack. |
| New Jeevan ShantiNo. 758 | Not applicable | One premium | ₹1.5 Lakh | Buy the pension now, start drawing it up to five years later at a locked-in rate. |
| Jeevan Dhara IINo. 872 | Not applicable | One premium | ₹1 Lakh | A deferred annuity with regular or single premiums and eleven payout options. |
To price several of these against each other on the same age and sum assured, the LIC premium calculator runs every plan on the site through the same engine and puts the answers in one table.
LIC Saral Pension: frequently asked questions
How much pension does LIC Saral Pension pay for ₹10 lakh?
LIC's brochure illustration for a 60-year-old buying with ₹10 lakh and taking the annuity yearly: ₹62,300 a year under Option I, or ₹61,600 a year under Option II with a 55-year-old spouse. Those figures exclude tax and include the higher rate for a purchase of ₹10 lakh or more. Monthly mode pays less per year.
What is the minimum purchase price for Saral Pension?
LIC does not fix one. The rule is a minimum annuity of ₹1,000 a month, ₹3,000 a quarter, ₹6,000 a half-year or ₹12,000 a year, so the purchase price needed depends on age and option. Younger buyers need more, because the rate is lower at younger ages.
Can I surrender LIC Saral Pension?
Only in one case: from six months after the start, if the annuitant, the spouse or any of the annuitant's children is diagnosed with one of the listed critical illnesses. LIC then pays 95% of the purchase price, less any loan outstanding.
Can I take a loan against Saral Pension?
Yes, any time after six months. The loan is capped so that the yearly interest does not exceed 50% of the yearly annuity, and the interest is taken out of each annuity payment. For loans sanctioned from 1 May 2024 to 30 April 2025 the rate was 9.24% a year; it is reset each year at the 10-year G-Sec rate plus 2 percentage points.
Who can be the second annuitant under Option II?
Only a spouse. The spouse must also be between 40 and 80 at entry.
What is the difference between Saral Pension and Jeevan Akshay-VII?
Saral Pension has two options and both return the purchase price. Jeevan Akshay-VII has ten, including life-only options that pay more because nothing is returned, guaranteed periods, an increasing annuity and joint life with someone other than a spouse. At age 60 on ₹10 lakh, Saral Pension's Option I pays ₹62,300 and Jeevan Akshay-VII's comparable Option F pays ₹64,000, both from LIC's brochures.
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.
Related calculators
Plans people usually weigh up against Saral Pension before deciding.
Jeevan Akshay-VII
No. 857Hand over a lump sum, start drawing a guaranteed income immediately, for life.
Open calculatorSmart Pension
No. 879LIC's newest immediate annuity, with liquidity features the older plans lack.
Open calculatorNew Jeevan Shanti
No. 758Buy the pension now, start drawing it up to five years later at a locked-in rate.
Open calculatorJeevan Dhara II
No. 872A deferred annuity with regular or single premiums and eleven payout options.
Open calculator