LIC New Deferred Future Secure Pension Plan 260

The New Deferred Future Secure Pension Plan-260 from LIC is a unique single premium, non-linked, deferred annuity financial product. In this policy, the annuity payments are paid in arrears to the annuitant or survivor upon their survival after the deferment period completes.

The policyholder is provided with two annuity options at the contract's inception in this plan. Note that the deferment duration may range from three years to 10 years.

Option one:

Deferred annuity for single life with return of purchase price.

Option two:

Deferred annuity for a joint life with return of purchase price.

Benefits

Annuity benefits

In this section, we will discuss the annuity benefits, that is, the amount due on survival for different annuity options:

Option one

During Deferment - No payment is initiated during deferment. Moreover, in case of the unfortunate demise of the policyholder in this period, no annuity benefits will be paid as per the terms of the policy. However, the nominee will receive certain death benefits.

After Deferment - The annuity payments according to the policy will begin within the policy year after the conclusion of the deferment duration. It will be made in arrears till the policyholder is alive, and the payments will stop after his/her demise. The death benefits will be paid to the nominee.

Option two

During Deferment - No payment is initiated when the deferment duration is running. Therefore, no annuity benefits will be paid for this policy for the unfortunate demise of the policyholder and his/her spouse during the deferment duration. However, the nominee will receive certain death benefits.

After Deferment - The income payments according to the policy will begin within the policy year after the end of the deferment duration. Till the policyholder is alive he/she will get the annuity payments in arrears, and the total payments will be transferred to the living spouse on the annuitant’s demise. The payments will stop on the spouse's subsequent death, and death benefits will be paid to the nominee. 

An important thing to note in this case is that if the spouse dies before the policyholder, the allowance payments will continue till their demise. Death benefits will be paid to the nominee following that.

Beneficiary Benefits

Option 1

During Deferment- On the annuitant’s demise during deferment tenure, no annuity benefits will be paid as per the policy. Instead, the death benefit equivalent to the buying price of the policy along with 1% of the purchase price for every year of deferment till the year of demise will be paid to the nominee. After that, the policy will lapse.

After Deferment- On the annuitant’s demise after deferment tenure, the income payments will stop. Death benefit equivalent to 105% of the buying price for annuities with a five years deferment period will be paid to the nominee. The nominee will be paid with a death benefit less than and equal to 110% of the buying price for annuities with a deferment period of 5+ years. In both cases, the policy will lapse after the mentioned time.

Option 2

During Deferment- On the annuitant’s and spouse’s demise during deferment tenure, no annuity benefits will be paid according to the policy. However, the death benefit equivalent to the acquisition cost of the policy and 1% of the purchase price for every year of deferment till the year of demise of an annuitant or spouse (whichever is later) will be paid to the nominee. In addition, on the first death (annuitant or spouse), annuity payments following the deferment duration will be paid to either of the survivors.

After Deferment- On the annuitant’s demise after deferment tenure, the entire annuity amount will be transferred to the spouse as long as they're alive. The payments will stop right after the death of the spouse. If the spouse predeceases the named annuitant, the payments will continue and cease upon the named annuitant's death.

On the death of both spouses, the annuity payments will stop. Death benefit equivalent to 105% of the purchase price of the annuities with a deferment period of five years will be paid to the nominee. If the deferment period is more than five years, the benefit will be less than and equal to 110%. On the first death of either the named policyholder or spouse, annuity payments after the deferment duration will be paid to either survivor.

Return of purchase price

This benefit is available under both options.

Surrender benefit

Surrender benefits can be availed only under extreme circumstances such as loss of job before the annuitant's superannuation, children’s marriage, critical illness etc. 

The surrender benefit can be as well from the second policy year. The guaranteed surrender value is 95% of the purchase price. However, the company may pay an exceptional surrender value under certain circumstances, which might go up than the guaranteed surrender value.

During the policy deferment duration from the second year after the 10th policy year, the special surrender value will be 95% of the single premium year. It will increase by 1% each subsequent year of the deferment duration for five years or less. On the contrary, it will increase by 2.5% each following year for a deferment duration of more than five years. This increase in surrender value will stop when the deferment duration is completed. However, no charge to the surrender value will be levied after vesting.

Eligibility conditions

Additional Annuity Rate (For Higher Purchase Prices)

Serving Aspects

• Underwriting requirements

All underwriting aspects will follow the underwriting policy of the company.

• Insurance levy or tax

Insurance levies or other taxes, if any, will be charged according to the existing rules apart from the premium.

To learn more about the policy terms and conditions in detail, contact Policybazaar.

Why should you opt for LIC New Deferred Future Secure Pension Plan-260

• Flexible annuity payment modes like yearly, quarterly, half-yearly and monthly.
• Deferment duration from three years to 10 years.