Planning for retirement means ensuring steady income when your working years end. With increasing life expectancy and inflation eroding purchasing power, a dependable lifelong pension is essential, and LIC’s annuity plans convert your retirement savings, such as EPF, PPF, gratuity, NPS exit proceeds, or other lump sums, into guaranteed lifetime income.
Understanding LIC Annuity Plans (Pension Plans)
LIC’s annuity plans work on a simple principle: you invest a lump sum once, and LIC pays you a fixed pension at regular intervals for the rest of your life, as per the option you choose. These are non-linked, non-participating products, so they do not invest in equity markets, offer no bonuses, and do not fluctuate with NAV or stock prices; the annuity rate is locked at purchase based on age, option, and purchase amount.
LIC is a majority government-owned life insurer regulated by IRDAI, which offers strong comfort on long-term claim-paying ability, though these remain insurance contracts, not direct government schemes or bonds.
Important note: Features, eligibility, and annuity rates are governed by LIC’s latest policy documents and may change. Always obtain an official quote/illustration from licindia.in or an LIC branch/agent before investing.
Key Benefits: Why Choose LIC Annuity Plans for Lifelong Pension?
- Lifetime pension guarantee – Annuity payments continue for the lifetime of the primary annuitant and, in many joint options, for the spouse as well, reducing the risk of outliving your income.
- Capital protection (ROPP) options – Many variants offer “return of purchase price” (ROPP), where your nominee receives back the full lump sum on death (or on second death in joint-life last-survivor options), helping you balance regular income with legacy goals.
- Stability and predictability – Your gross pension amount is fixed at the outset for the chosen annuity option and mode, shielding you from stock market crashes or NAV volatility.
- Tax treatment – Annuity income is taxable as “Income from Other Sources” at your slab rate. In some cases (for example, certain retirement proceeds or NPS exits), the purchase may be eligible for tax deductions under sections such as 80CCC or 80CCD, subject to prevailing law and individual eligibility – always confirm with a tax advisor.
- Flexible design and payout modes – You can choose monthly, quarterly, half-yearly, or yearly payouts and select among single-life, joint-life, increasing annuity, and guaranteed-period options, allowing you to customise cash flows to your retirement plan.
Main LIC Annuity Plans for Lifetime Income (2026)
LIC’s Jeevan Akshay-VII (Plan 857) – Immediate Pension from Day One
Jeevan Akshay-VII is LIC’s flagship single-premium immediate annuity plan, suitable when you want pension to start right away (within the next payment mode period, such as the following month).
Core features (as of 2026):
- Single-premium, non-linked, non-participating immediate annuity.Minimum purchase price: â‚ą1,00,000 (subject to minimum annuity such as â‚ą1,000 per month or equivalent for other modes).Entry age: generally from 30 years; maximum 85 years for many options and up to 100 years for select return-of-purchase-price (ROPP) options (check current LIC brochure).Ten annuity options, including:
- Life-only annuity (pension for life, no return of capital).Life annuity with guaranteed periods of 5/10/15/20 years and life thereafter.Life annuity with ROPP (full purchase price back on death).Life annuity with 3% simple annual increase.Joint-life options with 50% or 100% of annuity continuing to the surviving spouse, with or without ROPP.
Savings protection angle:
- ROPP variants let you enjoy lifetime pension while ensuring your original investment is returned to your heirs, helping preserve legacy.
- Joint-life options help secure your spouse’s income even after your death, reducing longevity and survivor-income risk.
LIC’s New Jeevan Shanti (Plan 758) – Deferred Annuity for Future Retirement
New Jeevan Shanti (Plan 758) is a single-premium deferred annuity plan, ideal if you are still working but wish to lock in future pension rates today and start receiving income after a chosen deferment period.
Core features:
- Single-premium, non-linked, non-participating deferred annuity.Entry age: 30–79 years (last birthday); maximum vesting age 80 years (depending on deferment and option; refer to current LIC brochure).Deferment period: from 1 year up to a maximum of 5 years, subject to maximum vesting age, always confirm via official illustration for your profile.Options: single-life and joint-life (last-survivor) annuity.Annuity rate is guaranteed at inception and paid throughout life after the deferment period.Death benefit during deferment: higher of purchase price plus specified additions or 105% of purchase price, payable as lump sum, instalments, or for purchasing annuity, depending on the option chosen.Loan and surrender: allowed in select cases and options, subject to policy conditions and minimum periods.
Savings protection angle:
LIC’s Smart Pension (Plan 879) – Flexible Immediate Annuity with Broad Appeal
LIC’s Smart Pension (Plan 879) is a modern, single-premium immediate annuity plan with a wide age band, flexible options, and special incentives for certain customer segments such as NPS exiters and existing LIC customers.
Core features:
- Single-premium, non-linked, non-participating immediate annuity; pension begins immediately based on the mode selected.Age eligibility: broad range (from 18 to 85 years for most options; up to 100 years for some, subject to current LIC rules).Multiple annuity variants: single-life and joint-life options, with or without ROPP, level annuity and increasing annuity options (e.g., 3% or 6% annual simple increase where offered).Special incentives: enhanced annuity rates or benefits may apply for NPS subscribers at exit (up to around 3%), existing LIC policyholders (around 0.15%), online purchases, higher purchase price slabs, or certain special categories (such as Divyangjan), as per LIC’s scheme rules at the time of purchase.Loan and, in some cases, partial withdrawal facilities available under eligible options, subject to conditions.
Wide age eligibility makes it suitable both for early retirement planners and older retirees wanting immediate income.
ROPP and joint-life options allow you to combine lifelong income with capital protection and spouse security, tailored to your family’s needs.
LIC’s Saral Pension (Plan 862) – Standardized and Simple Immediate Annuity
Saral Pension (Plan 862) is LIC’s IRDAI-standardised immediate annuity plan with just two straightforward options, designed for easy comparison across insurers and maximum simplicity.
Core features:
- Single-premium, non-linked, non-participating immediate annuity.Age eligibility: typically 40–80 years (check latest LIC brochure for exact limits).Only two IRDAI-standard options:
- Life annuity with 100% return of purchase price on death of the annuitant.Joint-life last-survivor annuity with 100% annuity to the surviving spouse and 100% return of purchase price on second death.
Both options return 100% of purchase price, making it highly suitable for retirees focused on leaving capital behind while still receiving a guaranteed pension.
IRDAI standardisation ensures similar core features across companies, so you mainly compare annuity rates and service comfort.
Step-by-Step: How to Get Lifelong Pension from LIC Annuity Plans
Step 1: Assess Your Retirement Needs
- Decide whether you need income now (immediate annuity like Jeevan Akshay-VII, Smart Pension, Saral Pension) or later (deferred annuity like New Jeevan Shanti).
- Evaluate whether your spouse or dependants rely on your income and if a joint-life option with 50% or 100% continuation is appropriate.
- Consider whether you prefer level payments, increasing payments (to partially hedge inflation), or guaranteed minimum periods (to ensure income for a fixed term even if you die early).
Step 2: Get Official LIC Annuity Quotes
- Use LIC’s official website calculators or visit a branch/authorised agent to generate personalised annuity illustrations showing the exact pension amounts for each plan and option.
- Compare multiple plans – Jeevan Akshay-VII, New Jeevan Shanti, Smart Pension, Saral Pension – by looking at pension amount, ROPP availability, spouse coverage, and flexibility.
Step 3: Select the Right LIC Annuity Plan
- If you are already retiring or need immediate pension: Consider Jeevan Akshay-VII, Smart Pension, or Saral Pension based on desired complexity, online incentives, and need for multiple variants versus simplicity.
- If retirement is several years away: New Jeevan Shanti may be suitable to lock annuity rates now and start pension later, particularly when retirement is 1–5 years away (subject to vesting age limits).
- If you value simplicity and full capital return: Saral Pension’s two standard ROPP options are often ideal for legacy-focused and conservative retirees.
Step 4: Complete the Purchase Process
- Submit KYC documents (age proof, identity proof, address proof), PAN, and bank account details where pension will be credited.
- Pay the single premium (purchase price) online or offline; in some plans, online purchase or higher purchase slabs can fetch slightly higher annuity rates.
- Review your policy bond, understand free-look rights, and carefully note conditions for loan and surrender for the chosen plan and option.
Step 5: Start and Track Your Lifetime Pension
- Your pension begins as per the plan: immediately for immediate annuities or after the selected deferment period for New Jeevan Shanti.
- Choose and confirm your payout mode (monthly, quarterly, half-yearly, or yearly) and track credits in your bank account.
- Use LIC’s online portal and service channels to update personal/bank details and, where allowed, request loans or exercise surrender options.
Practical Tips to Maximise Benefits and Protect Your Retirement Corpus
- Compare and lock rates carefully – Since annuity rates are locked permanently once you buy, compare quotes not only across LIC plans but also across insurers before committing a large lump sum.
- Use online purchase where it helps – Where available, consider buying annuities online to benefit from potential annuity-rate incentives and transparent, on-screen illustrations.
- Prioritise joint-life if your spouse depends on you – For couples with a single primary earner, joint-life options with 50% or 100% continuation can be more suitable than single-life annuity.
- Weigh increasing and guaranteed-period options – Increasing annuity and guaranteed-period features can hedge inflation and early-death risk respectively, but they usually start with a lower initial pension – evaluate the trade-off using official quotes.
- Avoid over-allocating to annuities – While annuities provide security, they are illiquid; keep adequate liquidity and emergency funds outside annuity to handle unexpected needs.
- Plan NPS exits and large corpus decisions with professionals – For NPS exits (where a portion is compulsorily annuitised) or large retirement corpus deployment, consult a tax professional/financial planner to align annuity choice with tax efficiency and your overall retirement strategy.
Get Personalised Help Choosing the Right LIC Pension Plan
Selecting the right mix of immediate or deferred annuity, single-life or joint-life, and ROPP or non-ROPP can be complex, especially when you factor in tax rules, NPS exits, and family responsibilities. A knowledgeable LIC advisor can help you compare official quotations across Jeevan Akshay-VII, New Jeevan Shanti, Smart Pension, and Saral Pension and match them to your retirement cash-flow needs.
lifeinsuranceadvisor.in helps in guiding and getting the right LIC plans as per your need. Shagun Verma is an LIC Insurance Advisor who can advise on plan selection, provide official LIC illustrations, and assist with documentation. For personalised support, contact Shagun Verma at +91-76510-32666 to discuss which LIC annuity plan fits your long-term retirement and legacy objectives.
LIC annuity plans provide reliable lifelong pension with government-backed stability. Visit licindia.in for the latest brochures, calculators, and quotes, or reach out for guidance. Secure your retirement – start planning today.
