LIC Pension Plus Plan 803 Calculator

The LIC Pension Plus Plan 803 is a popular unit-linked insurance policy designed to provide a steady income stream or pension after retirement. This plan combines the benefits of investment and insurance, offering policyholders the dual advantage of market-linked returns with a guaranteed minimum interest rate on premiums paid. It is primarily a deferred pension plan, allowing policyholders to accumulate a retirement corpus and then convert it into a regular pension income.

What is the LIC Pension Plus Plan 803?

The LIC Pension Plus Plan 803 is a Unit Linked Insurance Plan (ULIP) focused on pension and retirement planning. In this plan, the premiums you pay are invested in a mix of equity and debt funds, depending on your choice, aiming for capital growth over the policy term. The value of your policy depends on the Net Asset Value (NAV) of the funds you choose.

• Plan type: Unit-linked deferred pension plan.
• Investment Choice: Policyholders can choose from different fund options such as debt funds, balanced funds, or equity-oriented funds based on their risk appetite.
• Employment of Funds: The premiums are invested, and the fund value grows over time based on market performance.
• Returns: The plan offers market-linked returns with a guaranteed minimum interest rate on the gross premium.
• Maturity Benefit: At the end of the policy term, the accumulated fund is used to purchase an annuity (pension) from LIC, providing a regular income.

Launch Date and Withdrawal Date

LIC Pension Plus Plan 803 was launched on 2nd September 2010. This makes it a well-established pension product in LIC’s portfolio, with over a decade of customer experience.

The plan was withdrawn from sale on 1st January 2012. Although the plan is no longer open for new customers, existing policyholders continue their policies under the terms they opted for. Those interested in LIC pension products can explore other current offerings such as LIC New Pension Plus or other ULIP pension plans by LIC.

Key Features of LIC Pension Plus Plan 803

• Market-linked growth with minimum guaranteed interest: Being a ULIP, the fund value reflects the performance of selected investment options. However, a guaranteed minimum interest rate is applied to gross premiums paid, ensuring a baseline return.
• Flexible Premium Payment Options: You can choose to pay premiums annually, half-yearly, quarterly, or monthly via ECS (Electronic Clearing Service). The minimum premium is Rs. 15,000 per year and Rs. 30,000 for single premium.
• Policy Term and Premium Payment Term: Generally, policy terms range between 10 to 20 years or more, depending on customer preference and age at entry.
• Annuity Purchase at Maturity: At maturity, the accumulated fund value or the guaranteed maturity proceeds (whichever is higher) is used to buy an annuity that pays you a pension for life.

How Does the LIC Pension Plus Plan Work?

1. Payment of Premiums: As a policyholder, you pay regular premiums over the policy term or a single lump sum premium.
2. Investment of Premiums: The premiums are invested in the chosen funds—debt, balanced, or growth.
3. Fund Value Accumulation: Based on NAV and fund performance, your policy fund value grows.
4. Guaranteed Interest: Regardless of market performance, a guaranteed minimum interest is credited on your gross premiums.
5. Maturity / Vesting: At the end of the policy term, the sum accumulated is used to purchase an annuity (monthly pension).
6. Annuity Payment: LIC starts paying regular pension as per the annuity option selected.

Benefits of LIC Pension Plus Plan 803

• Assured Minimum Return: Besides market-linked returns, you have the benefit of guaranteed minimum interest on gross premiums.
• Option to Commute: You can commute (withdraw a portion) of the maturity proceeds up to one-third (1/3rd) as a lump sum.
• Regular Pension: The balance amount after commutation is used to purchase an annuity that pays a regular pension.
• Partial Withdrawals: Allowed after a lock-in period of five years against specific conditions.
• Death Benefits: Your nominee or legal heir gets benefits either as a lump sum or in installments according to their choice.
• Flexibility in Premium Payments: Multiple payment modes and no upper limit on premiums.
• Tax Benefits: Premium payments and maturity proceeds are eligible for tax benefits under applicable sections of the Income Tax Act.

Using the LIC Pension Plus Plan 803 Calculator

A Pension Plus Plan calculator is a handy tool that helps prospective and existing policyholders estimate:

• The premium amount payable.
• The expected fund value at maturity based on assumptions.
• The amount of pension you can receive monthly, quarterly, half-yearly, or yearly.
• The maturity amount or annuity amount you can expect.

The calculator takes inputs such as your age, premium amount, policy term, fund choice, and expected rate of returns to provide an estimate of your financial benefits from the plan.

Steps to Use the Calculator

1. Enter Your Age: The age at which you plan to enter the policy.
2. Select Premium Amount: Define the amount you plan to invest annually or as a single premium.
3. Choose Policy Term: Decide the duration for which you will pay premiums and wait for maturity.
4. Select Fund Option: Pick between a debt fund, a balanced fund, or a growth fund depending on your risk tolerance.
5. Estimate Rate of Returns: Based on your fund selection, enter expected annual returns.
6. Calculate: The calculator provides future value estimates, maturity proceeds, and pension amount.

This allows for better financial planning and tailoring the policy as per your retirement goals.

Premium Payment Options

• Single Premium: Pay the entire premium in one go.
• Regular Premium: Annual, half-yearly, quarterly, or monthly payments via ECS.
• Top-up Premium: Additional premium payments in multiples of Rs. 1,000 allowed anytime except during the last 5 years of the policy.

Fund Options and Investment Strategy

LIC Pension Plus Plan 803 offers choice among three main funds:

1. Debt Fund: Invests primarily in fixed income securities; ideal for conservative investors.
2. Balanced Fund: Mix of equity and debt; balances risk and returns.
3. Growth Fund: Equity-oriented; for those willing to take higher risks for potentially better returns.

Your fund selection impacts NAV and the total fund value, which influences maturity benefit and pension.

Loyalty Additions and Guarantees

While this plan provides a guaranteed minimum interest rate on gross premiums, policyholders may also benefit from loyalty additions or bonuses declared by LIC depending on the performance and policy terms.

Surrender and Partial Withdrawal Rules

• Lock-in Period: 5 years mandatory lock-in during which surrender or partial withdrawal is restricted.
• Partial Withdrawals: Permitted after the lock-in period subject to terms. Allowed up to 25% of the unit fund value, with a maximum of three partial withdrawals.
• Surrender: If the policy is surrendered before 5 years, the fund value is transferred to a Discontinued Policy Fund. After 5 years, the current fund value is paid.

Annuity and Pension Payment Options

At maturity, the accumulated fund is converted into an annuity to provide monthly or periodic retirement income. LIC offers various annuity options such as:

• Annuity for life.
• Joint-life annuity.
• Annuity with return of purchase price.
• Annuity with period certain.

You can commute 1/3rd of the maturity proceeds and receive it as a lump sum.

Death Benefits and Nominee Options

In case of the policyholder’s death during the term:

• The nominee receives 105% of the total premiums paid.
• The nominee can choose to receive the death benefit as a lump sum or as monthly/quarterly/half-yearly/yearly installments under the settlement option.

Why Choose LIC Pension Plus Plan 803?

• Market-linked growth potential with downside protection through guaranteed minimum interest.
• Flexible and multiple premium payment modes.
• Assured pension for life after maturity.
• Trusted LIC brand with a track record of reliability.
• Tax benefits on premiums and payouts.
• Suitable for medium- to long-term retirement planning.

Who Should Buy LIC Pension Plus Plan 803?

• Individuals aged 18 to 65 years at entry looking for a pension plan with investment growth potential.
• Those who prefer a combination of insurance and investment to build a retirement corpus.
• Investors willing to take moderate investment risks for better returns.
• Those seeking tax benefits along with retirement income security.

Frequently Asked Questions

Conclusion

LIC Pension Plus Plan 803 is a unique pension product that offers the benefits of market-linked growth with insurance security and a guaranteed minimum interest rate. Though withdrawn from sale in 2012, it remains a valuable product for existing policyholders, providing guaranteed annuity after maturity.

Using the LIC Pension Plus Plan calculator can help investors plan their retirement smartly by estimating future benefits based on their inputs. The flexibility in premium payments, choice of funds, and annuity options make it a versatile pension solution.