Pension Plans
LIC's Saral Pension (862)
Lifelong pension from a single payment, with 100% of the purchase price returned on death
- Entry age
- 40 years (completed) to 80 years (completed); for the joint life option the spouse must also be within these ages
- Policy term
- Whole life (annuity paid for as long as the annuitant/spouse is alive)
- Premium paying term
- Single premium (one-time purchase price)
- Min. sum assured
- Minimum annuity: ₹1,000 per month, ₹3,000 per quarter, ₹6,000 per half-year or ₹12,000 per year (minimum purchase price depends on this, the option chosen and age)
Plan overview
LIC's Saral Pension is a standard immediate annuity plan: you pay a lump sum once and start receiving a pension for life, at a rate fixed when the policy begins. On death (of the annuitant, or the last survivor in the joint option) the full purchase price is paid back to the nominee. It suits people aged 40 to 80 who want a simple, steady income for themselves or for themselves and their spouse.
New to pension plans? Read our simple guide: Pension and Annuity Plans Explained Simply →Key benefits
- One-time lump sum payment; pension starts right away and is paid for life
- Annuity rate is locked in at the start of the policy
- 100% of the purchase price returned to the nominee on death
- Choose single life or joint life (with spouse) annuity
- Higher annuity rates for purchase prices of ₹5 lakh and above; 2% extra for online purchase
- Loan available after 6 months; surrender allowed on specified critical illnesses
- Standard IRDAI product with the same terms across all life insurers
Eligibility at a glance
- Plan number
- 862
- UIN
- 512N342V05
- Plan type
- Non-Par, Non-Linked, Single Premium, Individual Immediate Annuity Plan
- Entry age
- 40 years (completed) to 80 years (completed); for the joint life option the spouse must also be within these ages
- Policy term
- Whole life (annuity paid for as long as the annuitant/spouse is alive)
- Premium paying term
- Single premium (one-time purchase price)
- Minimum sum assured
- Minimum annuity: ₹1,000 per month, ₹3,000 per quarter, ₹6,000 per half-year or ₹12,000 per year (minimum purchase price depends on this, the option chosen and age)
- Maximum sum assured
- No limit on purchase price
- Premium payment modes
- Single premium; annuity payable Yearly, Half-yearly, Quarterly or Monthly (in arrears)
How the plan works
Saral Pension is a Standard Immediate Annuity plan framed under IRDAI guidelines, so its terms and conditions are the same at every life insurer. You pay a single lump sum (the purchase price) and choose one of two annuity options. The annuity rate is fixed when the policy starts and the pension is paid for the rest of the annuitant's life (or the lives of both spouses under the joint option). The plan can be bought offline or online at www.licindia.in.
The annuity option you pick cannot be changed later.
Annuity options
| Option | What you get while alive | What happens on death |
|---|---|---|
| Option I: Life Annuity with Return of 100% of Purchase Price | Annuity paid in arrears for as long as the annuitant lives | Annuity stops; 100% of the purchase price is paid to the nominee(s)/legal heirs |
| Option II: Joint Life Last Survivor Annuity with Return of 100% of Purchase Price | Annuity paid in arrears as long as the annuitant and/or spouse is alive | On the death of the last survivor, annuity stops and 100% of the purchase price is paid to the nominee(s)/legal heirs |
The joint life option can be taken only with your spouse.
Annuity payment modes: Yearly, half-yearly, quarterly or monthly. Payments are made in arrears, i.e. the first instalment comes 1 year, 6 months, 3 months or 1 month after the policy starts, depending on the mode chosen.
Minimum annuity:
| Mode | Minimum annuity |
|---|---|
| Monthly | ₹1,000 per month |
| Quarterly | ₹3,000 per quarter |
| Half-yearly | ₹6,000 per half-year |
| Yearly | ₹12,000 per year |
There is no upper limit on the purchase price.
Incentives:
- Higher purchase price: the annuity rate is increased for three purchase price slabs: ₹5,00,000 to ₹9,99,999; ₹10,00,000 to ₹24,99,999; and ₹25,00,000 and above. The incentive is larger for higher slabs and for less frequent annuity modes.
- Online purchase: annuity is increased by 2% for policies bought online.
Brochure illustration (purchase price ₹10 lakh excluding taxes, yearly mode, annuitant aged 60, spouse aged 55 for Option II):
| Option | Yearly annuity |
|---|---|
| Option I | ₹62,300 |
| Option II | ₹61,600 |
These figures are only the brochure's example; actual annuity depends on age, option, mode and the rates applicable on the date of purchase.
Death benefit
Under both options, the full (100%) purchase price is returned to the nominee(s)/legal heirs: on the annuitant's death under Option I, and on the death of the last survivor under Option II.
Loan, surrender & revival
- Loan: Available any time after six months from the start of the policy. Under the joint life option the annuitant can take the loan, and after the annuitant's death the spouse can. The maximum loan is set so that the yearly loan interest does not exceed 50% of the yearly annuity. Interest is recovered from the annuity payments, and any outstanding loan is deducted from the claim amount; the principal can be repaid at any time. The loan interest rate is the 10-year G-Sec rate plus 200 basis points (9.24% p.a. for loans sanctioned from 1 May 2024 to 30 April 2025).
- Surrender: Allowed any time after six months from the start of the policy, but only if the annuitant, spouse or any child of the annuitant is diagnosed with one of the 20 critical illnesses listed in the brochure annexure (e.g. specified-severity cancer, first heart attack, kidney failure needing dialysis, stroke, major organ transplant). On approval, 95% of the purchase price is paid, less any outstanding loan and interest, and the policy ends.
- Revival: Not applicable, as this is a single premium plan.
Other key terms
- Free-look period: 30 days from receipt of the policy document (electronic or physical, whichever is earlier). The premium is refunded after deducting stamp duty and any annuity already paid. If the policy was bought with proceeds of another insurer's deferred pension plan, the refund goes back to that insurer.
- Taxes: GST and other applicable taxes are charged separately and are not counted for calculating benefits. Consult your tax adviser on income tax treatment.
- Riders: No riders are mentioned in the brochure for this plan.
Who should buy LIC's Saral Pension?
- Retired or about-to-retire individuals aged 40 to 80 who want a fixed lifelong income
- Couples who want the pension to continue for the surviving spouse
- People who want the full purchase price passed on to their family after death
- Anyone with a lump sum (such as retirement money) looking for a simple, standard annuity
Frequently asked questions
What is the entry age for LIC Saral Pension (Plan 862)?
The annuitant must be between 40 years and 80 years (age completed). For the joint life option, the spouse must also be within this age range.
What is the minimum pension I can get?
The minimum annuity is ₹1,000 per month, ₹3,000 per quarter, ₹6,000 per half-year or ₹12,000 per year. The minimum purchase price depends on this amount, your age and the option chosen. There is no maximum purchase price.
What does my family get after my death?
Under both options, 100% of the purchase price is paid to the nominee(s)/legal heirs: on your death under Option I, or on the death of the last survivor (you or your spouse) under Option II.
Can I surrender Saral Pension?
Only in specific cases: after six months from the start, if you, your spouse or any of your children is diagnosed with one of the listed critical illnesses. In that case 95% of the purchase price is paid, less any outstanding loan and interest.
Can I take a loan against this policy?
Yes, after six months from the start of the policy. The loan is limited so that the yearly interest does not exceed 50% of your yearly annuity, and interest is deducted from your annuity payments.
Is there any benefit for buying online or investing a larger amount?
Yes. Policies bought online get a 2% increase in annuity, and higher annuity rates apply for purchase prices of ₹5 lakh and above, in three slabs.