Pension Plans
LIC's Smart Pension (879)
Pension for life from a single payment, with 20 annuity options for one or two lives
- Entry age
- 18 years (last birthday) for all options; maximum 100 for Option F, 65 for E1-E2, 70 for E3-E5, 85 for other options. Via POSP-LI/CPSC-SPV: 40 to 70 years (completed), Options F and J only
- Policy term
- Whole life (annuity paid as long as the annuitant(s) live)
- Premium paying term
- Single premium
- Min. sum assured
- Minimum purchase price ₹1,00,000 (raised if needed to meet minimum annuity of ₹1,000 monthly / ₹3,000 quarterly / ₹6,000 half-yearly / ₹12,000 yearly)
Plan overview
LIC's Smart Pension is a single premium immediate annuity plan: you pay a lump sum once and receive a pension right away, at a rate fixed at the start. It offers single and joint life options, including options that return the purchase price, increasing pensions and liquidity features. It suits retirees and anyone with a lump sum who wants a regular, predictable income, alone or together with a family member.
New to pension plans? Read our simple guide: Pension and Annuity Plans Explained Simply →Key benefits
- One-time purchase price; pension starts immediately and annuity rates are fixed at inception
- Wide choice of single life and joint life annuity options, including return of purchase price
- Joint life cover with spouse, parent, child, grandparent, grandchild, sibling or parent-in-law
- Liquidity, Advanced Annuity and Annuity Accumulation options for added flexibility
- Higher annuity rates for larger purchase prices, existing LIC customers, online buyers and NPS subscribers
- Death benefit can be taken as lump sum, as an annuity for the nominee, or in instalments
- Special provisions for buying for a dependant person with disability (Divyangjan)
Eligibility at a glance
- Plan number
- 879
- UIN
- 512N386V01
- Plan type
- Non-Par, Non-Linked, Individual, Savings, Immediate Annuity Plan
- Entry age
- 18 years (last birthday) for all options; maximum 100 for Option F, 65 for E1-E2, 70 for E3-E5, 85 for other options. Via POSP-LI/CPSC-SPV: 40 to 70 years (completed), Options F and J only
- Policy term
- Whole life (annuity paid as long as the annuitant(s) live)
- Premium paying term
- Single premium
- Minimum sum assured
- Minimum purchase price ₹1,00,000 (raised if needed to meet minimum annuity of ₹1,000 monthly / ₹3,000 quarterly / ₹6,000 half-yearly / ₹12,000 yearly)
- Maximum sum assured
- No limit on purchase price (subject to underwriting policy)
- Premium payment modes
- Single premium; annuity payable Yearly, Half-yearly, Quarterly or Monthly (in arrears)
How the plan works
Smart Pension is a single premium immediate annuity plan. You pay a lump sum (the purchase price) and choose an annuity option. The annuity rate is fixed when the policy starts and does not depend on future experience; the plan is non-par, so no bonus is paid. Annuity can be for one life or two lives. A joint life annuity can be taken between any two lineal family members (grandparent, parent, children, grandchildren), spouses, siblings or with a parent-in-law. It can be bought through agents and other intermediaries, POSP-LI / CPSC-SPV, or online at www.licindia.in.
The annuity option cannot be changed once chosen. There is no maturity benefit.
Annuity options
Single life
| Option | Description | On death of annuitant |
|---|---|---|
| A | Life annuity | Nothing payable |
| B1 / B2 / B3 / B4 | Annuity certain for 5 / 10 / 15 / 20 years and life thereafter | If death occurs within the certain period, annuity continues to the nominee until that period ends |
| C1 / C2 | Life annuity increasing at a simple rate of 3% / 6% p.a. | Nothing payable |
| D | Life annuity with return of balance purchase price | Purchase price minus total annuity paid (nil if annuities paid exceed it) |
| E1 / E2 | Life annuity with 50% / 100% early return of purchase price at the policy anniversary on or after age 75 | Purchase price minus any early return already paid |
| E3 / E4 | Life annuity with 50% / 100% early return of purchase price at the policy anniversary on or after age 80 | Purchase price minus any early return already paid |
| E5 | Life annuity with 5% of purchase price returned each year from age 76 to 95 (both inclusive) | Purchase price minus early returns already paid |
| F | Life annuity with return of purchase price | Full purchase price paid to nominee |
Joint life
| Option | Description |
|---|---|
| G1 | Annuity to primary annuitant; 50% continues to the secondary annuitant after the primary annuitant's death |
| G2 | 100% annuity continues while either annuitant is alive; nothing payable after the last death |
| H1 / H2 | Annuity increasing at simple 3% / 6% p.a.; 50% to secondary annuitant after the primary annuitant's death |
| I1 / I2 | Annuity increasing at simple 3% / 6% p.a.; 100% continues while either annuitant is alive |
| J | 100% annuity while either annuitant is alive; purchase price returned to the nominee on death of the last survivor |
Annuity modes: Yearly, half-yearly, quarterly or monthly, paid in arrears (first payment 1 year, 6 months, 3 months or 1 month after the start). Modal conversion factors: yearly 1.00, half-yearly 0.98, quarterly 0.97, monthly 0.96. The mode can be changed later from a policy anniversary (request at least 90 days before); moving to a more frequent mode is allowed only twice.
Minimum annuity: ₹1,000 per month, ₹3,000 per quarter, ₹6,000 per half-year or ₹12,000 per year. Minimum purchase price is ₹1,00,000 (₹50,000 where bought for a Divyangjan; for NPS exits as per PFRDA rules but not below ₹50,000). No maximum annuity or purchase price, subject to underwriting.
Entry ages (last birthday) through agents/intermediaries:
| Options | Minimum | Maximum |
|---|---|---|
| F | 18 | 100 |
| E1, E2 | 18 | 65 |
| E3, E4, E5 | 18 | 70 |
| A, B1-B4, C1, C2, D, G1, G2, H1, H2, I1, I2, J | 18 | 85 |
For joint life, the limits apply to both lives. Through POSP-LI / CPSC-SPV, only Options F and J are allowed, with entry age 40 to 70 years (completed). For QROPS purchases, the minimum age is 55.
Incentives (increase in annuity rate):
- Existing LIC policyholders (or nominees of a deceased policyholder, within the conditions stated): 0.15%.
- Direct sale without intermediary: online 2.50%, or NPS subscribers 3.00% (only one of these two).
- Higher purchase price, added per ₹1,000 purchase price per year:
| Purchase price | Options C1, C2, H1, H2, I1, I2 | All other options |
|---|---|---|
| Below ₹5,00,000 | Nil | Nil |
| ₹5,00,000 to ₹9,99,999 | 1.40 | 2.30 |
| ₹10,00,000 to ₹24,99,999 | 1.80 | 3.10 |
| ₹25,00,000 to ₹99,99,999 | 2.10 | 3.60 |
| ₹1,00,00,000 and above | 2.30 | 3.80 |
Brochure sample (purchase price ₹10 lakh, yearly mode, new customer through agent, annuitant aged 60, secondary annuitant 55): for example Option A ₹85,000, Option F ₹64,900, Option J ₹64,300 a year. These are only illustrations; actual amounts depend on age, option and the rates in force when you buy.
Death benefit
Death benefit is payable only under Options D, E1-E5, F and J, as described above. Under B1-B4, the annuity continues to the nominee for the rest of the certain period. If the annuity mode is half-yearly or yearly, 50% of one instalment is also paid to the nominee if death occurs more than 3 or 6 months (respectively) after the last instalment.
The annuitant chooses how the nominee receives the death benefit:
- Lump sum
- Annuitisation: all or part used to buy an immediate annuity for the nominee at rates prevailing then
- Instalments over 5, 10 or 15 years (minimum instalment ₹5,000 monthly, ₹15,000 quarterly, ₹25,000 half-yearly or ₹50,000 yearly)
Liquidity and other options
- Liquidity Option (Options F and J only): After 5 policy years you can withdraw a portion of the surrender value as a lump sum, up to 3 times, with total withdrawals capped at 60% of the purchase price. Annuity and other benefits reduce proportionately.
- Advanced Annuity Option (Option J): Within one year of the first death, the survivor can take the discounted value of up to 5 years of annuity in advance.
- Annuity Accumulation Option (all options): Defer annuities due in a block of 5 years and receive each one, with accumulation, 5 years after it falls due. Allowed for up to three blocks; not allowed while a loan is outstanding.
- NPS subscribers: Options as allowed under PFRDA regulations.
- Divyangjan: Option F on own life with the death benefit compulsorily used to buy an annuity for the disabled nominee, or Options G2 / J with the Divyangjan as secondary annuitant.
Optional riders
No riders are mentioned in the brochure for this plan.
Loan, surrender & revival
- Surrender: Allowed at any time only under Options D, E1-E5, F and J. Surrender value is the relevant purchase price amount (net of annuities or early returns paid, as applicable) multiplied by an SV factor that rises from 80% in year 1 to 90% from year 21, and 92.5% after 35 policy years or age 100. There can be a significant loss on surrender.
- Loan: Available under Options E1-E5, F and J, from 3 months after issue or after the free-look period, whichever is later. The loan is limited so that annual interest does not exceed 50% of the yearly annuity, and to 80% of the surrender value. Interest is recovered from annuity payments (9.50% p.a. compounding half-yearly for loans sanctioned 1 May 2024 to 30 April 2025).
- Revival: Not applicable (single premium plan).
Other key terms
- Free-look period: 30 days from receipt of the policy (electronic or physical, whichever is earlier); purchase price refunded after stamp duty and any annuity paid. Not applicable where the purchase is compulsory annuitisation from LIC deferred pension or group superannuation proceeds; proceeds from other insurers' pension plans, QROPS or NPS go back to the source.
- Taxes: Applicable taxes are collected separately on the purchase price and are not used for calculating benefits.
Who should buy LIC's Smart Pension?
- Retirees who want a regular lifelong pension from a lump sum
- Couples or family members who want the income to continue for a surviving family member
- People who want the purchase price returned to their nominee after death
- NPS subscribers buying an annuity on exit
- Parents wanting to secure lifelong income for a dependant with a disability
Frequently asked questions
What is the minimum investment in LIC Smart Pension (Plan 879)?
The minimum purchase price is ₹1,00,000, increased if needed so that the annuity meets the minimum of ₹1,000 a month (or ₹12,000 a year). For purchases for a Divyangjan, the minimum is ₹50,000. There is no maximum, subject to underwriting.
What is the entry age?
Minimum 18 years (last birthday). The maximum depends on the option: 100 for Option F, 65 for E1-E2, 70 for E3-E5 and 85 for all other options. Through POSP-LI/CPSC-SPV the age range is 40 to 70 years.
Which options return my money to my family?
Option F returns the full purchase price on death, and Option J returns it on the death of the last survivor. Option D returns the balance purchase price after deducting annuities paid, and E1-E5 return the purchase price less any early return already paid.
Who can be the second person in a joint life annuity?
Any two lineal family members (grandparent, parent, children, grandchildren), spouses, siblings, or a parent-in-law.
Can I withdraw money from the policy?
Under Options F and J, the Liquidity Option lets you withdraw part of the surrender value after 5 policy years, up to 3 times and up to 60% of the purchase price in total. Surrender and loans are allowed only under certain options.
Are there extra benefits for online buyers or existing LIC customers?
Yes. Online purchase adds 2.50% to the annuity rate and NPS subscribers buying directly get 3.00% (only one of these). Existing LIC policyholders and eligible nominees get an extra 0.15%.