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LIC Saral Pension Plan – Coverage, Benefits & Documents Required

Introduction on LIC Saral Pension plan

LIC has been introducing new plans every year to benefit people of all age groups. LIC Saral Pension scheme is a standard pension plan that was launched on 1st July 2021 under the guidelines of IRDA. 

LIC Saral Pension scheme is an individual, non-linked immediate annuity plan. It is a single premium plan after which the annuitants will be paid a guaranteed pension amount for a lifetime. The option to avail annuity immediately makes this plan quite beneficial. Saral Pension Plan LIC can be purchased both through online and offline modes and it also comes with an option to include your spouse in the policy. This pension plan is an affordable and efficient solution for your future life after your retirement. There are two annuity options available under the plan that the policyholders can choose at the time of making their purchase:

  1. Option 1:
    A single-life annuity option
  2. Option 2:
    A joint-life annuity option

Eligibility criteria of LIC Saral Pension plan

These are the following criteria through which an individual needs to be eligible to apply for the LIC Saral Pension scheme. 

Entry Age Minimum: 40 years 
Maximum: 80 years 
Purchase PriceMinimum: Depends on the minimum annuity amount, the policyholder’s age, and the option chosen
Maximum: No limit
Minimum AnnuityINR 12,000 per annum

NOTE: An individual can only take the joint annuity option with his/her spouse. The spouse will also have to be eligible according to the minimum and maximum age criteria.

Benefits of LIC Saral Pension plan

  1. Death Benefits
    The death benefit is offered to the policyholders under both options.
    • Under option 1: In case of the unfortunate death of the annuitant, the nominee will receive 100% of the purchase price.
    • Under option 2: In case of the unfortunate death of the last survivor, the nominee will receive 100% of the purchase price.
  2. Survival Benefits
    • Saral Pension Plan LIC offers annuity payments monthly, quarterly, semi-annually, and annually depending on what the annuitant chooses, for as long as he lives
    • The annuitant will continue to receive annuity payments till he and/or his spouse (under option 2) are alive.

Features of LIC Saral Pension plan:

These are the key features of the LIC Saral Pension scheme:

  1. Flexible annuity options:
    There are two annuity options available under the LIC Saral Pension plan for the policyholders to choose from according to their requirements. The annuitants can opt for annuity payment modes from monthly, quarterly, semi-annually, and yearly modes.
  2. Incentives offered:
    • On a purchase price higher than INR 5 Lakh an incentive is awarded by way of increment in the annuity rate.
    • If the policy is bought online, a 2% rebate is awarded by way of increment in the annuity rate.
  3. Loan facility available:
    Under the LIC Saral Pension scheme, an annuitant can apply for a loan after a period of six months from the date of commencement of the policy. The loan amount granted to the annuitants should be such that the annual interest charges should be a maximum of 50% of the yearly annuity amount payable.Under the second annuity option, the spouse can apply for a loan after the death of the annuitant.
  4. Free look period
    If a person is unsatisfied with the terms and conditions of the policy, he/she can return the policy to the organization in a time period of 15 days for physically bought plans and 30 days for the plans bought online.
  5. Ease of purchase
    Saral Pension Plan LIC can be purchased by visiting the LIC office or consulting an insurance agent. However, the policy is also available on LIC’s official website and Turtlemint for an easy buy.

Premium details for LIC Saral Pension plan

Being a single-premium individual immediate annuity scheme, the lump sum amount that you pay towards the policy is then paid out to you in instalments for as long as you may live. As mentioned above, there are 2 annuity options that the individual can choose from:

  1. Single-life annuity option
  2. Joint-life annuity option

Working of LIC Saral Pension plan

Let us now take this example to understand how the Saral Pension Plan LIC works. Jai Rathore, aged 60 years, bought the LIC Saral Pension scheme at the purchase price of INR 10 lakhs.

  1. Under Option I – Life Annuity with return 100% of the Purchase PriceThe Annuity amount would be INR 51,650In case he also covered his wife Meetu Rathore, aged 55 years, in the policy and opted for.
  2. Under Option II – Joint Life Last Survivor Annuity with Return of 100% of Purchase Price on death of the last survivor
    The Annuity amount would be INR 51,150

*The annuity amounts are indicative only and subject to change at any point of time.

Riders in LIC Saral Pension plan 
There are no riders available under the LIC Saral Pension scheme.

Documents required for LIC Saral pension plan
The following documents would be required :

  1. To purchase LIC Saral Pension Plan:
    1. Policyholder’s address proof like his Aadhar card/Passport/Driving License/Electricity Bill, etc
    2. Policyholder’s Age proof like his Aadhar card/Birth certificate.
    3. Policyholder’s Identity proof like his Voter ID/Aadhar card.
  2. To claim death benefits after the Annuitant’s demise:
    1. Claim form
    2. Death certificate
    3. NEFT Mandate
    4. Original Policy documents
    5. Proof of death
    6. Proof of title
    7. Proof of age
  3. To surrender LIC Saral Pension policy:
    1. Original Policy Documents
    2. Discharge form
    3. ID proof
    4. NEFT Mandate

Tax implication in LIC Saral Pension plan
An immediate annuity plan, the lump-sum amount paid towards the is eligible for a tax-exemption under Section 80CCC of the Income Tax Act, 1961. You can save up to INR 1.5 lakhs under this. 

The pension that you receive, as a taxpayer, you can claim a tax deduction up to INR 50,000 on it. 

Surrender value in LIC Saral Pension plan

  1. Surrender value
    The surrender value is an amount that is paid to the policyholder in case he purposely terminates the policy before maturity. Saral Pension Plan LIC can be surrendered after a period of six months after the date of commencement of the policy if the annuitant or the spouse or the annuitant’s child is diagnosed with a listed critical illness. The corporation will have to pass the request post which the policyholder shall receive 95% of the purchase price. 

Before you Buy
Saral Pension Plan LIC is an online policy that can be purchased via the company website. However, before you buy the plan, you can visit www.turtlemint.com to look at how the different variables will influence the policy premium and the annuity. Turtlemint, therefore, assists you in making a knowledgeable decision. 


LIC’s Saral Pension scheme is a newly launched annuity plan that comes with two different annuity options. This plan promises to secure the golden years of senior citizens by offering them guaranteed pension payments until death along with other benefits. Moreover, this Plan can now be bought online easily through LIC’s official page or through Turtlemint.


All the loans that are sanctioned between 1st May 2021 to 30th April 2022 shall have an interest rate of 8.44% per annum which will be effective for the entire term of the loan.

No, you can purchase the Joint Life Annuity only with your spouse.

Sadly, no. The annuity that you receive is classified as “Salary” and is taxable. It is, however, eligible for a deduction of INR 50,000 or the annuity amount (whichever is less)

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