LIC Annuity Plans in Kharadi, Pune
An annuity is one of the few financial decisions that is hard to undo. Once the lump sum is in and the option is chosen, it usually stays that way for life. So it's worth getting the details right. I walk retirees and pre-retirees in Kharadi through LIC's annuity options before they commit.
Annuity in one line
- You pay LIC a lump sum (the purchase price)…
- …and LIC pays you a regular income…
- …for life, or as per the option you choose.
How LIC Annuity Plans Work
The amount you invest is the purchase price. The income you receive is the annuity. The rate at which the purchase price converts into income is generally fixed when you buy, depending on your age, the option you choose and the rates applicable at that time. That's what gives an annuity its predictability.
Immediate annuity
The income starts soon after purchase, and you can usually choose monthly, quarterly, half-yearly or yearly payouts. This is typically used by people who have just retired and received their PF, gratuity or a policy maturity amount. LIC's immediate annuity plans have included Jeevan Akshay-VII and LIC's Smart Pension.
Deferred annuity
You invest now, and income starts after a deferment period you choose. This suits someone in their 50s who wants to fix a future pension in advance. New Jeevan Shanti has been LIC's single-premium deferred annuity plan.
LIC revises plans, rates and options from time to time, and plans can be withdrawn or replaced. We'll always look at the current brochure and an official illustration from LIC before you invest.
Common annuity options, explained simply
- Life annuity: income for as long as you live. Usually the highest income, but nothing is returned after death.
- Life annuity with return of purchase price: income for life, and the purchase price goes to the nominee after death. Income is lower than a pure life annuity.
- Joint life annuity: income continues to the spouse after the first person passes away, fully or partly as per the option.
- Increasing annuity: in some plans, income increases at a set rate each year, starting lower.
Which options are available, and their exact terms, depend on the specific plan.
Where an annuity fits in retirement
An annuity covers fixed monthly needs well – groceries, society maintenance, electricity, medicines. It's less suitable for money you might need suddenly. That's why I usually suggest putting only part of your retirement savings into an annuity. The broader picture is on the retirement planning page.
Immediate vs Deferred Annuity
A general comparison to help you think it through.
| Point | Immediate annuity | Deferred annuity |
|---|---|---|
| When income starts | Soon after purchase | After the deferment period you choose |
| Typically suits | People at or after retirement | People a few years away from retirement |
| How you pay | Usually a single lump sum | Single premium or as per plan |
| Main benefit | Income from day one | Future income fixed in advance |
| Main thing to check | Option chosen is usually permanent | Your money is committed for the deferment period |
Please note: LIC plan benefits, premiums, eligibility and applicable terms depend on the specific plan and prevailing LIC rules. Information here is for general guidance; please verify the latest details and policy terms before making a decision. Policy issuance and claim settlement are subject to LIC's rules and approval.
Official LIC website →LIC Annuity – FAQs
Clear answers before you put a lump sum into an annuity.
In everyday use they mean almost the same thing. An annuity is the product that pays you a regular income; the income itself is what most people call a pension.
In most LIC annuity options the annuity rate is fixed at the time of purchase, so your income stays the same. Some options offer an increasing annuity. Always check the exact terms of the option you choose.
It depends on the option. Options with return of purchase price pay the invested amount to the nominee after death. Surrender or loan facilities, if any, vary by plan and option, so check this before investing.
Yes, subject to the plan's entry age and other conditions. Parents are welcome to come to the office in Kharadi so the options can be explained to them directly.
Understand Your Annuity Options First
A short call can save you from picking the wrong option for life.