MUMBAI: Life Insurance Corporation of India Limited (LIC) has introduced New Pension Plus effective 5 September. This is a non participating, unit Linked, individual pension plan that helps build a corpus by systematic and disciplined savings which can be converted into regular income by purchase of an annuity plan on completion of term.

Either a single premium payment policy or a regular premium payment can be purchased for the plan. The premium will be paid during the course of the policy under the regular payment option. Subject to the minimum and maximum limits of premium, policy duration, and vesting age, the policyholder should have the opportunity to select the amount of premium payable and the policy term. Subject to certain restrictions, there will also be a choice to extend the accumulation or deferment time within the same insurance under the same terms and circumstances as the initial policy.

The option to invest premiums in one of the four different types of funds is given to the policyholder. The policyholder will be charged a premium allocation charge for each premium they pay. The remaining sum, referred to as the allocation rate, is the portion of the premium used to buy units of a fund that the policyholder has chosen. There are four accessible free switches for changing funds within a policy year.

Under an active policy, guaranteed additions will be paid as a portion of the annual premium. The guaranteed increase to regular premiums is from 5.0 to 15.5%, and the guaranteed addition to single premiums is up to 5% at the end of a specific policy year. The guaranteed increases sum will be used to buy units as per the opted fund type.

Based on investment performance and fund management fees for each fund type, the NAV will be calculated daily.

The proceeds of the policy must be used by the life assured either upon vesting, or at the conclusion of the policy term, or upon surrender or discontinuance in accordance with the annuitization provision. Units may be partially withdrawn after five years.

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