LIC Monthly Income & Pension Plans: Jeevan Umang, Smart Pension & More

Consult a licensed life insurance advisor or financial planner to evaluate which LIC monthly income or pension plan fits your goals, risk profile, and retirement timeline, or discuss your queries on LIC plans at +91‑7832933580.

In 2025, the Life Insurance Corporation of India (LIC) provides a comprehensive range of retirement and regular income solutions, blending traditional guaranteed plans with annuity products for lifelong payouts. Launched on February 18, 2025, LIC’s Smart Pension (Plan 879) adds a flexible immediate annuity to the portfolio, complementing established options like Jeevan Umang for survival benefits with protection, New Jeevan Shanti for deferred income, and New Pension Plus for accumulation. This guide compares their features, benefits, suitability, and considerations to assist in retirement planning. Exact features, options, and eligibility may differ by plan version and are governed by the latest LIC brochures and policy documents; this article is only an educational overview.

Creating Your Second Paycheck with LIC

LIC’s plans cater to different stages: building income over time, securing rates pre-retirement, or generating immediate flows post-retirement. Emphasizing guarantees, they suit conservative investors, though fixed payouts may not fully hedge inflation. Selection hinges on age, available corpus, risk appetite, and needs for protection versus pure income.

Whether you’re planning for retirement decades away or need income starting next year, understanding the structural differences between these plans is crucial. A 35-year-old building wealth needs something fundamentally different from a 60-year-old converting retirement savings into monthly pension.

1. LIC’s Jeevan Umang (Plan 945): Whole-Life Income with Protection

This participating, non-linked whole-life assurance plan offers lifelong coverage (up to age 100) alongside guaranteed annual survival benefits after the premium-paying term. It uniquely combines life cover, guaranteed survival benefits, and potential bonuses; all extending until age 100.

Key Features:

• Eligibility: Entry age 90 days–55 years
• Premium Terms: 15, 20, 25, or 30 years
• Sum Assured: Minimum ₹2 lakh, no upper limit (subject to underwriting)
• Survival Benefits: 8% of Basic Sum Assured annually after premium term, until maturity or death
• Maturity (Age 100): Sum Assured + simple reversionary bonuses + final additional bonus (if any)
• Death Benefit: Sum Assured on Death plus bonuses, subject to being at least 105% of total premiums paid, as defined in the policy terms

How It Works in Practice:

Let’s say you’re 35 years old and buy Jeevan Umang with a ₹25 lakh Sum Assured and 20-year premium payment term. You’ll pay premiums until age 55. Starting at age 56, you begin receiving ₹2 lakh annually (8% of ₹25 lakh) for life; whether that’s until age 70, 85, or 100. This payment is guaranteed and fixed as a rupee amount, independent of market fluctuations or investment returns.

Throughout the premium-paying years, the policy may also earn simple reversionary bonuses based on LIC’s surplus performance. While these bonuses aren’t guaranteed, they add to the eventual payout if you survive to age 100 or to the death benefit if something happens earlier.

Pros and Cons:

Pros:

• Predictable income from mid-life
• Whole-life protection for family security
• Liquidity via policy loans and surrender value
• Bonus potential adds to final benefits
• Legacy planning with death benefit throughout life

Cons:

• Many independent analyses show moderate IRRs in roughly the mid-single digits, depending on bonus experience and holding period (not guaranteed)
• Fixed 8% survival benefit vulnerable to inflation over decades
• Long commitment period before income begins

Who It Suits:

Individuals in their 30s–early 50s seeking disciplined savings, family cover, and legacy options. This plan is particularly attractive if you value predictable, guaranteed income amounts combined with whole-life coverage rather than term-limited policies. It works well for conservative investors who prioritize certainty and protection over maximum returns.

2. LIC’s Smart Pension (Plan 879): Flexible Immediate Annuity

A non-linked, non-participating, individual/group, savings immediate annuity plan launched on February 18, 2025, Smart Pension offers multiple single-premium immediate annuity options (single/joint life, with/without return of purchase price, and different modes such as monthly/quarterly/half-yearly/yearly), with guaranteed annuity rates locked at purchase.

Key Features:

• Premium: Single lump sum (minimum ₹1 lakh, subject to minimum annuity; no upper limit)
• Eligibility: Minimum entry age 18 years; maximum 65–100 years depending on option
• Annuity Options: Wide range including single-life and joint-life variants, with choices for escalating payments or other customizations
• Payout Modes: Monthly, quarterly, half-yearly or yearly, with minimum annuity amounts as specified in LIC’s Smart Pension brochure
• Liquidity: Certain Smart Pension options offer limited surrender/exit features after a minimum lock-in period, and some may permit loans against the policy as per LIC’s rules for that option. These facilities are not available across all variants, so policyholders should rely strictly on the official Smart Pension brochure for the exact options, conditions, and percentages
• Death Benefits: Vary by option; lump sum, annuitization, installments (5/10/15 years), or continued to survivor in joint cases

Incentives:

Enhanced annuity rates are available for larger purchase prices, NPS exit corpus, existing LIC policyholders/nominees and certain eligible disabled dependants, as per LIC’s published incentive slabs. This can meaningfully improve your monthly income compared to standard rates.

How It Works in Practice:

Imagine you’re 60 years old with ₹50 lakh in retirement savings. You pay this amount as a single premium to Smart Pension and begin receiving a fixed monthly annuity immediately; the exact amount determined by LIC’s annuity rates at the time you purchased the policy. This annuity continues for life, regardless of how long you live.

You can choose whether you want the ₹50 lakh purchase price returned to your nominees upon death (which reduces your monthly annuity amount) or maximize the monthly income by forfeiting the capital return. If you select “return of purchase price,” your nominees receive the full ₹50 lakh when you pass away, in addition to all the annuity payments you received during your lifetime.

Pros and Cons:

Pros:

• Immediate income starting within days of purchase
• Highly customizable options for different needs
• Some liquidity available on select options (unlike some traditional annuities)
• Enhanced rates for eligible categories
• Guaranteed rates locked at purchase

Cons:

• Largely irreversible commitment
• Fixed payouts erode with inflation unless escalating option chosen
• Lower annuity amounts if you opt for return of purchase price
• Surrender/loan features limited to specific variants only

Who It Suits:

Retirees or near-retirees (50+ years) with lump sums needing prompt, guaranteed flows. This is ideal for people who have just retired and need income to start right away, rather than planning for future retirement. The flexibility in options makes it suitable for various family structures and legacy preferences.

3. LIC’s New Jeevan Shanti (Plan 858): Deferred Annuity for Future Income

A single-premium deferred annuity plan allowing 1–12 year deferment for potentially higher annuity rates when income eventually begins.

Key Features:

• Premium: Single lump-sum payment
• Deferment Period: 1–12 years (you choose when annuity payments begin)
• Annuity Options: Single/joint life; with/without return of purchase price
• Payment Frequency: Monthly, quarterly, half-yearly, or yearly
• Annuity Rates: Fixed at purchase; incentives for higher premiums/online purchases
• Death During Deferment: Depending on the option, the purchase price (sometimes with additional benefits) is paid to the nominee as per plan conditions

How It Works in Practice:

If you’re 55 years old with ₹50 lakh in retirement savings but don’t need income for 5 years, you can pay this amount to New Jeevan Shanti and select a 5-year deferment period. At age 60, you begin receiving a fixed monthly annuity; typically higher than what immediate annuity would have paid at age 55, because LIC rewards the deferment period with better rates. This annuity continues for life once it starts.

Pros and Cons:

Pros:

• Locks in rates against potential future declines
• Higher annuity rates compared to immediate annuities (due to deferment)
• Suits forward planning for retirement
• Rate incentives for larger purchase amounts and online purchases

Cons:

• No income received during deferment period
• Commitment to fixed future payouts that cannot adapt
• Less flexibility compared to plans with ongoing liquidity

Who It Suits:

Pre-retirees in their 40s–60s with available corpus aiming to secure enhanced future pensions. This plan is particularly valuable when you have a lump sum now but won’t need regular income for several years. It’s ideal for locking in attractive rates if you expect interest rates or annuity rates to decline before your retirement.

4. Other Key Options

LIC’s Saral Pension (Plan 862): Standardized Immediate Annuity

A standardized immediate annuity product mandated by IRDAI for easy cross-insurer comparison, when available through LIC’s current product list. Offers simple options for straightforward pension needs without the complexity of multiple variants. This is perfect if you want transparent, easy-to-understand pension income without evaluating dozens of options. (Availability subject to LIC’s current product offerings.)

LIC’s New Pension Plus (Plan 867): Unit-Linked Accumulation

A unit-linked pension accumulation plan where you invest in market-linked funds over time, then use the accumulated corpus to buy annuity at vesting. Unlike the guaranteed plans above, this offers market-linked growth potential during accumulation years.

This suits risk-tolerant younger savers (typically 30s and 40s) who want equity exposure for growth before converting to guaranteed pension income at retirement. You can make regular or single premiums, switch between fund options based on market conditions, and then annuitize the final corpus at vesting age.

PMVVY (if extended)

Pradhan Mantri Vaya Vandana Yojana is a government scheme (administered via LIC) specifically for seniors aged 60+, offering guaranteed pension rates typically higher than market annuities. However, this is not a core LIC product and availability depends on whether the government extends the scheme beyond its scheduled closure dates.

Comparison Table: Key Plans at a Glance

Critical Considerations Before Committing

Taxation:

Annuity income is typically taxable as ‘income from other sources’ under the Income Tax Act. Maturity benefits from plans like Jeevan Umang may qualify for exemption under Section 10(10D) if conditions (e.g., premium-to-Sum Assured ratio limits) are met, subject to prevailing tax laws and individual circumstances. Consult a tax advisor for your specific situation, especially regarding old vs new tax regime implications.

Inflation Impact:

Fixed rupee amounts, whether Jeevan Umang’s ₹2 lakh annually or an annuity of ₹40,000 monthly, maintain their nominal value but lose purchasing power over decades. A ₹2 lakh annual income may feel comfortable today but could struggle to cover basic expenses 20-30 years from now. Consider escalating annuity variants where offered, or supplement with inflation-linked investments like equity mutual funds.

Irrevocability:

Most annuities (Smart Pension, New Jeevan Shanti, Saral Pension) generally cannot be reversed once purchased. While Smart Pension offers some surrender options on select variants, these come with conditions and lock-in periods. Jeevan Umang provides more exit flexibility through surrender value and policy loans, making it more adaptable if circumstances change.

Effective Yields:

Returns vary significantly by age at purchase, option selected, and prevailing rates. Many third-party calculators and independent analyses show mid-single to high-single digit IRRs in typical cases for traditional plans, but these are indicative and not guaranteed beyond the quoted annuity amounts for pension products. Always request personalized illustrations from LIC before committing.

Underwriting Requirements:

Medical and financial underwriting requirements (including possible medical tests) depend on your age, Sum Assured/purchase price, and plan type. LIC decides case-by-case per its underwriting policy. Larger Sum Assured amounts or older entry ages typically trigger more extensive health evaluations. Be prepared to provide financial documents, income proof, and undergo medical examinations where required.

Consider Alternatives for Diversification:

While LIC plans offer security and guarantees, don’t put all retirement eggs in one basket. Diversify with mutual funds for equity exposure, Public Provident Fund (PPF) for tax-free accumulation, Senior Citizens Savings Scheme (SCSS) if eligible, and schemes like PMVVY if available. This balanced approach provides both stability from guaranteed plans and growth potential from market-linked instruments.

Making Your Decision: Which Plan When?

If you’re in your 30s or 40s: Jeevan Umang or New Pension Plus make sense. Choose Jeevan Umang if you want guaranteed, conservative income building with life cover. Opt for New Pension Plus if you’re comfortable with market-linked growth and want to accumulate a larger corpus before retirement.

If you’re in your 50s with retirement 5-10 years away: New Jeevan Shanti lets you lock in annuity rates now while deferring income until you actually retire. This protects you from potential rate declines and rewards your deferment with higher eventual annuity amounts.

If you’ve just retired or are within a year of retirement: Smart Pension and other current LIC immediate annuity options provide immediate income. Smart Pension offers maximum flexibility and enhanced rate incentives for various eligible categories, with multiple customization options to match your family structure and legacy preferences.

If you want income during working years plus legacy protection: Jeevan Umang’s survival benefits starting in your 50s or 60s, combined with whole-life coverage extending to age 100, make it unique for this purpose. No other plan in LIC’s portfolio offers this specific combination.

Getting Independent Guidance

These are long-horizon, often irreversible decisions involving substantial capital; potentially lakhs or crores of rupees that will determine your financial security for decades. The right choice depends on intricate details: your current age, exact retirement timeline, existing corpus and other investments, additional income sources (rental income, spouse’s pension, etc.), family obligations, risk tolerance, health status, and tax situation.

Reading LIC brochures provides essential product details and policy terms, but translating those details into “which plan for my specific situation” requires expertise and holistic financial planning. An independent life insurance advisor or SEBI-registered financial planner can compare Jeevan Umang, Smart Pension, New Jeevan Shanti, New Pension Plus, and Saral Pension in the context of your complete financial picture.

They can help you understand:

• Optimal premium amounts and Sum Assured based on your income replacement needs
• Tax implications under your specific circumstances
• How these plans integrate with existing investments and insurance
• Whether single premium or regular premium suits your cash flow
• Trade-offs between immediate income, deferred income, and accumulation strategies
• Estate planning considerations and nominee structures

This guidance helps ensure your “second salary” from LIC actually delivers the security, income, and peace of mind you’re counting on; rather than discovering mismatches or inadequacies years after committing your capital.

LIC’s 2025 portfolio, enhanced by the newly launched Smart Pension, continues to focus on reliability and guaranteed income amid market volatility. Always verify the latest details via licindia.in, use LIC’s official calculators for personalized quotes, and consult licensed advisors for tailored advice.

Ready to find your ideal LIC monthly income or pension plan? Consult a licensed life insurance advisor or financial planner to evaluate which solution fits your goals, timeline, and retirement needs. Discuss your queries on LIC income plans at +91‑7832933580.

This article is for informational and educational purposes only and does not constitute financial advice. Policy features, eligibility criteria, and benefits are subject to change. Always consult with qualified professionals and refer to official LIC brochures before making insurance or investment decisions.