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LIC Pension Plan for NRI

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Life Insurance Corporation (LIC), established in 1956, has also expanded its products and services to the NRIs staying in the UAE and the Middle East. It offers a wide range of insurance and investment Plan that helps in fulfilling the various requirements of individuals. 

LIC pension plans are renowned for their comprehensive coverage with multiple benefits and features among the several plans offered by LIC. Here's a quick laydown of the LIC pension plans for NRIs residing in the UAE.

List of LIC Pension for NRI

Pension plans can help individuals build secure funds and savings for retirement. LIC pension plans make for a great option here, as they can offer regular payments as monthly income or annuity that you can utilise in your golden years of life. 

Enlisted below are the top LIC pension pensions – 

  1. Pradhan Mantri Vaya Vandana Yojana (Plan No. 856)

  2. LIC’s Jeevan Akshay – VII (Plan No. (Plan No. 857)

  3. LIC’s New Jeevan Shanti (Plan No. 858)

  4. LIC’s Saral Pension (Plan No. 862)

Pradhan Mantari Vaya Vandana Yojana (Plan No. 856)

Pradhan Mantri Vaya Vandana Yojana (PMVY) is an LIC pension plan that can help individuals secure their lives after retirement. This pension scheme provides an assured pension of 7.40%, payable on a monthly basis, with its terms and conditions being decided and reviewed by the Ministry of Finance of India every year. 

Features of the PMVY Pension Plan

Here are the key features PMVY Pension Plan – 

  • This pension plan is available for sale up to 31st March 2023
  • The scheme is available for all senior citizens aged 60 years and above 
  • The term of this LIC pension plan for NRI is 10 years
  • Depending on the chosen mode of pension payment, the instalment can be made on a monthly, quarterly, half-yearly, or yearly basis
  • The rate contracted at the time of purchase of the policy stays the same for the entire tenure
  • The maximum and minimum pension available under this LIC pension plan are as follows – 

Mode of Pension

Minimum Pension in INR (₹)

Maximum Pension in INR (₹)

Monthly

1,000

9,250

Quarterly

3,000

27,750

Half-Yearly

6,000

55,500

Yearly

12,000

111,000

The minimum and maximum purchase prices under this LIC pension plan for NRI are given here  – 

Mode of Pension

Minimum Pension in INR (₹)

Maximum Pension in INR (₹)

Monthly

162,162

1,500,000

Quarterly

161,074

1,489,933

Half-Yearly

159,574

1,476,064

Yearly

156,658

1,449,086

  • The purchase price of the PMVY pension plan shall be Rs.15 lakhs at most
  • You can surrender anytime during the term of this LIC pension plan for NRI, although it is advisable to read the policy document to be aware of the terms and conditions 
  • The surrender value payable to the policyholder would be 98% of the purchase price
  • A loan facility can be availed of after the completion of three years of this LIC pension plan for NRI, i.e., PMVY 
  • The maximum amount of loan available under the policy shall be 75% of the purchase price 
  • You can purchase the policy via both online and offline modes
  • The policyholder will get a free-look period of 15 days if the policy is obtained offline and 30 days if the policy is online

Benefits of the PMVY Pension Plan

The PMVY pension plan for NRI offers a host of benefits to the policyholders, with some of the most significant ones being discussed below – 

Pension Payment:

In case the annuitant survives during the policy period, the pension would be paid to the annuitant in arrears, depending on the mode of payment they have chosen

Death Benefit:

In case the annuitant passes away during the policy tenure, the purchase price shall be refunded to the beneficiary

Maturity Benefit:

On survival of the pensioner to the end of the policy tenure, the purchase price and the pension shall be payable to the pensioner

LIC’s Jeevan Akshay – VII (Plan No. (Plan No. 857)

The Jeevan Akshay pension plan is among the best plans for investment for senior citizens provided by LIC. It is an immediate annuity pure pension plan with more than 10 annuity options available. The annuity rate is guaranteed at the beginning of the policy and the annuities are paid to the insured throughout their lifetime. The options for annuity start from Plan A and continue till Plan J.

Features of Jeevan Akshay Pension Plan

Have a look at the key features of the Jeevan Akshay Pension Plan – 

  • To avail of the benefits of this LIC pension plan for NRI, pensioners are required to pay the amount in a lump sum
  • The minimum age to buy the Jeevan Akshay Plan is 30 years, with the maximum entry age being 85 years
  • There is no maximum limit applicable on the purchase price of the plan
  • The instalments for the plan shall be made in advance, depending on the method of payment chosen

The surrender value payable shall be payable at any time after three months from the completion of the policy or after the expiry of the free-look period, whichever is later, under the following plans – 

  • Option F – Immediate annuity for life with return of purchase price
  • Option J – Joint life immediate annuity for life having a provision for 100% of the annuity payable, provided that one of the annuitants survives, along with the return of purchase price on death of the last survivor

The loan based on the policy shall be available after 3 months from the completion of the policy or after the expiry of the free-look period. The policy loan is available only under the following plans – 

  • Option F – Immediate annuity for life with return of purchase price
  • Option J – Joint life immediate annuity for life with a provision for 100% of the annuity payable on survival of at least one of the annuitants and return of purchase price on death of the last survivor
  • Under joint life, the loan can be availed by both the primary and secondary annuitant
  • The maximum amount of loan under the policy shall not exceed 50% of the annual annuity payable and be subjected to a maximum of 80% surrender value
  • During the free look period of 30 days of the policy, the policyholder can cancel the policy or make necessary changes to its terms and conditions. The company would return the purchase price (if relevant) after deducting the stamp duty charges and the annuity paid.

Benefits of Jeevan Akshay Pension Plan

Jeevan Akshay Pension Plan offers various benefits payable on survival and death, although there are no maturity benefits payable to the annuitant. The following are some of the critical benefits of the LIC Jeevan Akshay Pension Plan – 

Annuity Option

Annuity Description

Single/Joint Life

Benefits Payable on Survival

Benefits Payable on Death

A

Immediate annuity for life

Single life 

Annuity payments in arrears as per the chosen mode of payment

Annuity payment would stop cease instantly and the policy will terminate 

B

Immediate annuity with a guaranteed period of 5 years and life thereafter

Single life

Annuity payments would be made in arrears as per the chosen mode of payment

Under the five-year guaranteed period, the annuity shall be payable to the nominee. However, after the guaranteed period, the annuity payment would cease immediately, and the policy will terminate.

C

Immediate annuity with a guaranteed period of 10 years and life thereafter

Single life

Annuity payments would be made in arrears as per the select payment mode

Under the guaranteed period of ten years, the annuity shall be payable to the nominee. However, the annuity payment shall cease immediately after the guaranteed period and the policy will terminate.

D

Immediate annuity with a guaranteed period of 15 years and life thereafter

Single life

Annuity payments to be made in arrears as per the chosen mode of payment

Under the guaranteed period of fifteen years, the annuity would be payable to the nominee. After this, the annuity payment would stop immediately and the policy will terminate.

E

Immediate annuity with a guaranteed period of 20 years and life and thereafter

Single life

Annuity payments would be made in arrears as per the chosen mode of payment

Under the guaranteed period of twenty years, the annuity would be payable to the nominee. After this period, the annuity payment would stop immediately and the policy will terminate.

F

Immediate annuity for life with return of purchase price

Single life

Annuity payments would be made in arrears as per the preferred mode of payment

The annuity shall cease immediately after the death of the annuitant. The price shall be paid to the nominee as mentioned in condition 3 of part D of the policy document.

G

Immediate annuity for life increasing at a simple rate of 3% per annum

Single life

Annuity payments shall be made in arrears as per the chosen mode of payment. 

 

Furthermore, the annuity payment would be increased by 3% per annum for each completed policy year.

Nothing shall be payable to the nominee and the policy will cease immediately after the death of an annuitant.

H

Joint life immediate annuity for life with a provision for 50% of the annuity to the secondary annuitant on the death of the primary annuitant

Joint Life

Annuity payments to be made in arrears per the chosen mode of payment to the primary and/ or secondary annuitant

Death of Primary Annuitant

 

50% of the annuity amount payable to the secondary annuitant. After the demise of the secondary annuitant, the policy would cease and terminate.

 

Death of Secondary Annuitant

 

The annuity payments would continue to be paid to the primary annuitant. The policy will become inactive after the death of the primary annuitant.

I

Joint life immediate annuity for life with a provision for 100% of the annuity payable as long as one of the annuitants survive

Joint life

The annuity payment would be done in arrears as per the chosen mode of payment

Death of either of the covered lives

 

100% of the annuity payment to be made as long as one annuitant is alive

 

Death of the last survivor

Annuity payment shall be stopped immediately, and the policy will cease

J

Joint life immediate annuity for life with a provision for 100% of the annuity payable as long as one of the annuitants survives and return of purchase price on death of the last survivor

Joint Life

The annuity would be paid in arrears as long as the primary and secondary annuitants are alive, as per the chosen mode of payment

Death of either of the covered lives

 

100% of the annuity payment to be made as long as one annuitant is alive

 

Death of the last survivor

 

The annuity payments shall cease instantly. The nominee shall be paid the purchase price as mentioned in condition 3  of part D of the policy document.

LIC’s New Jeevan Shanti Plan (Plan No. 858)

It is one of the most popular pension plans for NRI as it offers two variants to choose from – deferred annuity for single life and deferred annuity for joint life. It is a single premium payment policy where the insured individual receives annuity payments after the deferment period. 

Features of the New Jeevan Shanti Plan

Discussed below are some of the features of the New Jeevan Shanti Plan:

There are two annuity options available under the plan – 

  • Deferred annuity for single life
  • Deferred annuity for joint life
  • The policy can be surrendered at any time during the policy term. Keep in mind that once the payment of the surrender value is made, the policy and the other benefits under the policy would cease. 
  • The surrender value would be higher than the Guaranteed Surrender Value (GSV) or Special Surrender Value. The calculation of both types is mentioned below – 

Guaranteed Surrender Value:  GSV factor x Purchase Price – Total annuity Amount payable to the surrender date. The GSV factors are given in the table below – 

 

Policy Year

GSV Factor

1

75%

2

75%

3

75%

4

90%

5 and above

90%

             Special Surrender Value: The Corporation determines this value, and it is reviewable.

  • A loan facility would be available after three months of completion of the policy or after the free-look period is expired (whichever is later) 
  • The maximum amount of the loan should not exceed 50% of the annual interest payable under the policy subject to the maximum of 80% of the surrender value. The loan is available under the given terms of the policy – 

During the Deferment Period

  • The interest on the loan shall be paid on a half-yearly compounding basis as per the rate specified by the provider
  • The first interest payment has to be made on the following policy anniversary or six months before the next policy anniversary (whichever is earlier)
  • Suppose the loan is not repaid during the deferment period and there is no default in the interest payment at the end of the deferment period. In such a case, the interest amount would be recovered from the total amount payable to the annuitant after the deferment period.
  • The difference between the surrender value and the outstanding loan amount, along with interest, would be paid to the annuitant if the loan is not repaid along with interest during the deferment period
  • The policy shall be forfeited if the interest is not paid on the due dates and the outstanding loan amount exceeds the surrender value during the deferment period

After the Deferment Period

Annuity payments under the policy would be used to recover the loan interest in this case. As per the specified frequency of annuity payments, the loan interest will accrue and would be due by the due date. The outstanding amount of the loan shall be repaid from the claim proceeds.

Benefits of the New Jeevan Shanti Plan

The following are the key benefits payable under this policy – 

  • Survival and Death Benefits:

Annuity Option

Annuity Description

Benefits Payable on Survival

Benefits Payable on Death

1

Deferred annuity for single life

Under the deferment period, nothing shall be payable to the annuitant.

 

After the deferment period, the annuity payments shall be made in arrears as per the chosen mode of payment.

Benefits payable on death shall be higher of – 

  • 105% of the purchase price
  • Purchase price + accrued additional benefits of death (mentioned in condition 3 of part C of the policy document) – total annuity payable till the date of death
 

Death of the annuitant during the deferment period

 

Death benefit payable to the nominee as mentioned in condition 3 of part D of the policy document

 

Death of the annuitant after the deferment period

 

The annuity payment would stop instantly and the death benefit shall be payable to the nominee as mentioned in condition 3 of part D of the policy document

2

Deferred annuity for joint life

Under the deferment period, nothing shall be payable to the annuitant.

After the deferment period, the annuity shall be paid to the annuitant in arrears as per the chosen mode of payment

Benefits payable on death would be as the following (whichever is higher) – 

 
  • 105% of the purchase price
  • Purchase price + accrued additional benefits of death (specified in condition 3 of part C of the policy document) – total annuity payable till the date of death
 

During the Deferment Period

 
  • Nothing shall be payable on the first death of either of the covered lives
  • On the death of the last survivor, the death benefit would be payable to the nominee as mentioned in condition 3 of part D of the policy document.
 

After the Deferment Period

 
  • On the death of either of the covered individuals, 100% of the annuity amount shall be paid (as long as one of the annuitants is alive)
  • On the death of the last survivor, annuity payment shall cease, and death benefit shall be payable to the nominee as mentioned in condition 3 of part D of the policy document.
  • Maturity Benefit:  No maturity benefit is payable to the annuitant under this policy
  • Additional Benefits on Death:  These benefits will accrue at the end of each policy month until the end of the deferment period. The additional benefit on death shall be calculated in the following manner – 

Additional Benefit on Death every month = Purchase price x Annuity rate per annum (but payable monthly) / 12

In the formula, the annual rate per annum payable monthly is equal to the monthly tabular annuity rate and would depend on the option selected by the annuitant, the age at entry, and the deferment period. 

LIC’s Saral Pension (Plan No.862)

LIC Saral Pension is another one among the renowned pension plans for NRI. It is a standard annuity plan in which the policyholder can choose the annuity type from the two options available on payment of a lump sum. The annuity rates are guaranteed at the initiation of the policy, and annuities are payable throughout the survival of the annuitant.

Features of the Saral Pension Plan

Here are the salient features of the Saral Pension Plan – 

The two annuity options available under this policy are – 

Life annuity with a return of 100% of the purchase price

  • Joint life last survivor annuity with a return of 100% of the purchase price (ROP) on the death of the last survivor
  • It is a non-linked, single premium, and non-participating immediate annuity plan
  • The insured person can pick the frequency of the annuity payment at their convenience. You can have the annuity payments annually, half-yearly, quarterly, or monthly as per your preference.
  • In case the policyholder's spouse or children are diagnosed with some critical illness, 95% of the purchase price would be paid to the annuitant after deducting the outstanding loan amount and loan interest, if any. 
  • The policyholder can surrender the policy at any time after six months of the commencement of the policy
  • Policyholders can avail of the loan after six months from the beginning date of the policy. 
  • The maximum amount of the loan should not exceed 50% of the annual amount payable under the policy
  • Under the joint-life option, the annuitant can avail of the loan – the policyholder's spouse is eligible to take the loan on the annuitant's death
  • The policyholder gets a free look period of 30 days from the date of receipt of the policy
  • You can receive the policy via electronic or physical mode

Benefits of the Saral Pension Plan

The benefits payable under the Saral Pension Plan are as follows – 

  • Survival and Death Benefits

Annuity Option

Single/Joint Life

Survival Benefits

Death Benefits

Life annuity with a return of 100% of the purchase price

Single Life

Annuity payment would be made in arrears as per the chosen mode of payment

The policy shall cease immediately and 100% of the purchase price shall be payable to the nominee

Joint life last survivor  annuity with a return of 100% of the purchase price (ROP) on the death of the last survivor

Joint Life

The annuity would be paid in arrears to the annuitant and/or spouse as per the chosen payment mode

  • On the death of either of the covered individuals, 100% of the annuity amount shall be paid to the other annuitant
  • On the death of the last survivor, the annuity payments would stop instantly and the purchase price shall be paid to the nominee /legal heirs

Maturity Benefits: There are no maturity benefits provided under the policy

Check out what others are asking about the LIC pension plan for NRI in the following section – 

Frequently Asked Questions (FAQs)

Q1: What are maturity benefits?

Maturity benefit refers to the payments made by the LIC (whether in a lump sum or instalments) when the insured individual survives the policy tenure.

Q2: Which is the best LIC pension plan for NRI in UAE?

LIC provides four types of pension plans for NRI – Pradhan Mantri Vaya Vandana Yojana (Plan No. 856), LIC’s Jeevan Akshay – VII (Plan No. (Plan No. 857), LIC’s New Jeevan Shanti (Plan No. 858), and LIC’s Saral Pension (Plan No. 862). 

You can opt for any of the plans as per your budget and choice.

Q3: Can NRI in UAE buy LIC pension plans?

Yes, LIC offers pension plans for NRI with different options for annuities.

Q4: Is it a good idea to invest in LIC pension plans?

LIC pension plans allow you to regularly invest a part of your salary to build your retirement fund. Thus, investing in LIC pension plans for a steady future can be a good idea if suiting your requirements.

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