LIC Smart Pension Plan 2025: Features, Benefits, Eligibility & How to Buy it

Updated on: Apr 21st, 2025

10 min read

The Life Insurance Corporation of India (LIC) has launched a new pension plan on 18 February 2025 known as Smart Pension Plan. The Smart Pension Plan is designed to offer retirees a reliable and steady income after retirement.

Know all about the LIC Smart Pension Plan, its features, benefits and how to buy it.

LIC Smart Pension Plan Details

Here are the details of the LIC Smart Pension Plan:

Scheme Name	LIC Smart Pension Plan
Scheme Feature	Non-participating, non-linked, individual/ group, savings, immediate annuity plan
Minimum Purchase Price	Rs. 1 lakh
Mode of Premium Payment	Single premium
Annuity Type	Single-Life Annuity and Joint-Life Annuity
Annuity Payment	Yearly, half-yearly, quarterly or monthly
Withdrawal Option	Partial or full withdrawal, as per plan terms
Loan Facility	Available after 3 months from the policy completion date or after the expiry of the free look period, whichever is later for certain annuity options

What is Smart Pension LIC Scheme Plan?

The Smart Pension Plan is a retirement plan that offers policyholders a lifetime of financial security and a stress-free retirement life. Under this plan, the policyholders pay a lumpsum and receive a fixed and guaranteed pension for life.

This plan is a non-participating, non-linked, individual or group, savings, immediate annuity plan as explained below:

Non-Participating: Policyholders will not receive a share of LIC’s profits, such as bonuses or dividends. The returns under this plan are fixed and decided when purchasing the plan, and any discretionary benefits, such as bonuses or surplus shares, are not offered.
Non-Linked: The plan is not linked to the stock market; thus, its returns are stable and are not affected by market movement.
Individual or Group Savings: The plan can be purchased by an individual (single person) or group (jointly by self, spouse, parents or siblings).
Savings: This plan helps secure future income after retirement by investing a lump sum amount.
Immediate Annuity: Once the policyholders pay the premium, they receive a regular pension (annuity) based on the chosen option.

Under this plan, the annuity rates are guaranteed at the policy’s purchase and payable on death or survival as per the chosen annuity option. Thus, a fixed benefit is ensured for the policyholder or their family, making it an attractive option for those looking for a predictable and reliable income stream after retirement.

Smart Pension Plan features

Single premium and immediate annuity plan
Availability of a wide range of annuity options as per customers’ needs, such as:
- Advanced annuity option
- Liquidity option
- Annuity accumulation option
Flexibility to choose either single-life annuity or joint-life annuity options, making it versatile for families seeking to secure financial stability for their loved ones
Higher purchase price incentives, boosting benefits for larger investments
Incentive for existing policyholders and nominees or beneficiaries of the deceased policyholders through enhanced annuity rates
Availability of tax benefits under Section 80C of the Income Tax Act on buying the policy for self and spouse
Availability of various liquidity options such as partial or full withdrawal as per terms
Various options for annuity payments, such as:
- Yearly
- Half-yearly
- Quarterly
- Monthly
Minimum annuity payments are as follows:
- Rs. 1,000 per month
- Rs. 3,000 per quarter
- Rs. 6,000 per half-year
- Rs. 12,000 per year
Special feature to take immediate annuity by NPS (National Pension Scheme) subscribers
Availability of the option to purchase the plan for the benefit of a dependant person with a disability (Divyangjan) life
Availability of policy loan at any time after three months from the policy completion date (date of issuance of policy) or after the expiry of the free look period, whichever is later for specified annuity options

Smart Pension Plan eligibility

The minimum entry age of the person must be 18 years.
The maximum entry age ranges from 65 to 100 years, depending on the annuity option.
Joint-life annuities can be taken between two lineal descendants or ascendants of a family (grandparent, parent, children, grandchildren) or siblings or spouses or parents-in-law.
The minimum purchase amount is Rs. 1 lakh. However, the minimum purchase amount can be increased to meet the minimum annuity amount.
The minimum purchase amount is Rs. 50,000 if it is purchased for the benefit of a dependant person with a disability (Divyangjan) life.
For NPS subscribers exiting from NPS, the minimum purchase amount will be Rs. 50,000 onwards as per the PFRDA rules and regulations.
There is no maximum purchase amount. However, the maximum purchase price is subject to the company’s underwriting policy.

Smart Pension flexible annuity options

The LIC Smart Pension Plan provides the option of a single-life annuity or joint-life annuity. If the policyholder chooses a single-life annuity, the plan provides payments for the annuitant’s lifetime. In a joint-life annuity, payments continue for the primary and secondary annuitants.

Here are the single-life annuity options a policyholder can choose under the Smart Pension Plan:

Annuity Option	Particulars
Option A	Life annuity
Option B1	Annuity certain for 5 years and life thereafter
Option B2	Annuity certain for 10 years and life thereafter
Option B3	Annuity certain for 15 years and life thereafter
Option B4	Annuity certain for 20 years and life thereafter
Option C1	Life annuity increasing at a simple rate of 3% p.a.
Option C2	Life annuity increasing at a simple rate of 6% p.a.
Option D	Life annuity with a return of balance purchase price
Option E1	Life annuity with a 50% return of purchase price after attaining 75 years
Option E2	Life annuity with a 100% return of purchase price after attaining 75 years
Option E3	Life annuity with a 50% return of purchase price after attaining 80 years
Option E4	Life annuity with a 100% return of purchase price after attaining 80 years
Option E5	Life annuity with a 5% return of purchase price every year after attaining the age of 76 years to 95 years
Option F	Life annuity with a return of purchase price

Below are the joint-life annuity options to choose under the Smart Pension Plan:

Annuity Option	Particulars
Option G1	Joint life annuity with 50% of the annuity to the secondary annuitant upon death of the primary annuitant
Option G2	Joint life annuity with 100% of the annuity to the secondary annuitant upon death of the primary annuitant
Option H1	Joint life annuity increasing at a simple rate of 3% p.a. with 50% of the annuity to the secondary annuitant upon death of the primary annuitant
Option H2	Joint life annuity increasing at a simple rate of 6% p.a. with 50% of the annuity to the secondary annuitant upon death of the primary annuitant
Option I1	Joint life annuity increasing at a simple rate of 3% p.a. with 100% of the annuity to the secondary annuitant upon death of the primary annuitant
Option I2	Joint life annuity increasing at a simple rate of 6% p.a. with 100% of the annuity to the secondary annuitant upon death of the primary annuitant
Option J	Joint life annuity with 100% of the annuity payable till one of the annuitant survives and return of purchase price upon the death of the last survivor

However, once the policyholder selects the annuity option, it cannot be altered.

Smart Pension Plan benefits

The smart pension plan provides guaranteed income since there are no market-linked risks.
It provides diverse annuity choices, where policyholders can choose an annuity option that suits their financial needs.
It provides liquidity options as partial withdrawal is permitted in certain cases. Thus, policyholders can withdraw money in case of emergencies.
It provides special benefits and incentives for existing LIC policyholders.
It can be easily purchased online or offline.
It can be used for NPS retirement corpus annuitisation.

LIC Smart Pension Plan - survival of annuitant

The benefits provided under the LIC Smart Pension Plan for the annuitant's survival vary according to the chosen annuity option. They could be regular payouts for life or other specific benefits as per the plan’s terms.

The benefits payable on survival of the annuitant for different annuity options are as follows:

Annuity Option	Benefits
Option A, Option B1, Option B2, Option B3, Option B4, Option D, Option F	Annuity payments will be made in arrears till the annuitant is alive.
Option C1	Annuity payments will be made in arrears till the annuitant is alive. Additionally, annuity payments will increase at a simple rate of 3% p.a. for each completed policy year.
Option C2	Annuity payments will be made in arrears till the annuitant is alive. Additionally, annuity payments will increase at a simple rate of 6% p.a. for each completed policy year.
Option E1	Annuity payments will be made in arrears till the annuitant is alive. Additionally, an early return of 50% of the purchase price will be paid upon survival of the annuitant to policy anniversary or immediately upon completion of 75 years.
Option E2	Annuity payments will be made in arrears till the annuitant is alive. Additionally, an early return of 100% of the purchase price will be paid upon survival of the annuitant to policy anniversary or immediately upon completion of 75 years.
Option E3	Annuity payments will be made in arrears till the annuitant is alive. Additionally, an early return of 50% of the purchase price will be paid upon survival of the annuitant to policy anniversary or immediately upon completion of 80 years.
Option E4	Annuity payments will be made in arrears till the annuitant is alive. Additionally, an early return of 100% of the purchase price will be paid upon survival of the annuitant to policy anniversary or immediately upon completion of 80 years.
Option E5	Annuity payments will be made in arrears till the annuitant is alive. Additionally, an early return of 5% of the purchase price will be paid upon survival of the annuitant on every policy anniversary coinciding with or immediately upon completion of 75 years to 95 years.
Option G1	Annuity payments will be made in arrears till the primary annuitant is alive.
Option G2, Option I1, Option I2, Option J	Annuity payments will be made in arrears until the primary and secondary annuitant are alive.
Option H1	Annuity payments will be made in arrears until the primary annuitant is alive. The annuity payments will increase at a simple rate of 3% p.a. for each completed policy year.
Option H2	Annuity payments will be made in arrears until the primary annuitant is alive. The annuity payments will increase at a simple rate of 6% p.a. for each completed policy year.

LIC Smart Pension Plan - death of annuitant

The benefit after the annuitant's death is as per the annuity option chosen by the annuitant. The options selected for payment of death benefit may be lumpsum, annuitisation of death benefit, instalments, liquidity, advanced annuity or annuity accumulation option.

The benefits paid upon the death of the annuitant under different annuity options are as follows:

Annuity Option	Benefits
Option A, Option C1, Option C2	Nothing is paid, and the annuity payments will cease immediately.
Option B1	If the annuitant dies within 5 years from the date of commencement, the annuity will be paid to the nominee until the expiry of 5 years from the commencement date. After the expiry of 5 years, the annuity payments will immediately cease. If the annuitant dies after 5 years from the date of commencement, the annuity payments will cease immediately.
Option B2	If the annuitant dies within 10 years from the date of commencement, the annuity will be paid to the nominee until the expiry of 10 years from the commencement date. After the expiry of 10 years, the annuity payments will immediately cease. If the annuitant dies after 10 years from the commencement date, the annuity payments will cease immediately.
Option B3	If the annuitant dies within 15 years from the date of commencement, the annuity will be paid to the nominee until the expiry of 15 years from the commencement date. After the expiry of 15 years, the annuity payments will immediately cease. If the annuitant dies after 15 years from the commencement date, the annuity payments will cease immediately.
Option B4	If the annuitant dies within 20 years from the date of commencement, the annuity will be paid to the nominee until the expiry of 20 years from the commencement date. After the expiry of 20 years, the annuity payments will immediately cease. If the annuitant dies after 20 years from the date of commencement, the annuity payments will cease immediately.
Option D	The annuity payments will cease immediately upon the annuitant’s death. The death benefit equal to the purchase price balance, i.e. [purchase price Less (sum of all annuity payments made till the death date)] will be paid to the nominee. No benefit is paid on death if the sum of all annuity payments made till the death date exceeds the purchase price.
Option E1, Option E3	Annuity payments will cease immediately upon the annuitant’s death. The nominee will receive a death benefit equal to the purchase price less the early return of the purchase price paid until the date of death.
Option E2, Option E4, Option E5	The annuity payments will cease immediately upon the annuitant’s death. The nominee will receive a death benefit equal to the purchase price less the early return of the purchase price paid until the date of death. No benefit will be paid upon death if 100% of the purchase price has already been paid till the death date.
Option F	The annuity payments will cease immediately upon the annuitant’s death, and the death benefit equal to the purchase price will be payable to the nominee.
Option G1	Upon the primary annuitant’s death, 50% of the annuity amount will be paid to the surviving secondary annuitant until he/she is alive. The annuity payments will cease upon the death of the secondary annuitant. If the secondary annuitant dies before the primary annuitant, the annuity payments will continue to be paid to the primary annuitant and will cease upon his/her death.
Option G2	Annuity payments will cease immediately, and nothing will be paid upon the death of the last survivor.
Option H1, Option H2	Upon the death of the primary annuitant, 50% of the annuity amount payable to the primary annuitant, if he/she had been alive on the due dates of the annuity, will be paid to the surviving secondary annuitant at those respective due dates till he/she is alive. The annuity payments will cease upon the death of the secondary annuitant. If the secondary annuitant dies before the primary annuitant, the annuity payments will continue to be paid to the primary annuitant and will cease upon his/her death.
Option I1	Upon the death of the last survivor, the annuity payments will cease immediately, and nothing will be paid. The annuity payments will increase at a simple rate of 3% p.a. for each completed policy year until the primary or secondary annuitant is alive.
Option I2	Upon the death of the last survivor, the annuity payments will cease immediately, and nothing will be paid. The annuity payments will increase at a simple rate of 6% p.a. for each completed policy year until the primary or secondary annuitant is alive.
Option J	Annuity payments will cease immediately upon the death of the last survivor. The purchase price will be paid to the nominee.

How to buy LIC Smart Pension Plan?

The LIC Smart Pension Plan can be purchased online or offline.

Online Process:

Visit the LIC website.
Click on ‘Customer’.
Enter your mobile number, OTP and click ‘Login’.
Click on the ‘Buy Online’ button.
Click on the ‘Pension’ tab and tick ‘LIC's Smart Pension’ option.
Click the ‘Proceed’ button.
The list of required documents will be displayed on the screen. These include income/investment proof, self-cancelled cheque, communication address proof, birth certificate (for minors), and photographs. Ensure that you have these documents ready with you and click ‘Proceed’.
Enter the required details, upload the documents, pay the premium and submit to purchase the policy.

Offline Process:

You can purchase the plan offline through an agent or other intermediaries, such as Point of Sales Persons-Life Insurance (POSP-LI) or Common Public Service Centers (CPSC-SPV).

The LIC Smart Pension Plan is a new plan offering tailored retirement solutions for individuals seeking financial stability during their post-retirement years. It provides various annuity options to choose from as per the policyholder’s convenience. It ensures financial freedom post-retirement by providing a lifetime of steady income during stress-free golden years of an individual.

Related Articles:
LIC Policy List
LIC Policy Surrender

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Frequently Asked Questions

What are the minimum annuity amounts?

The minimum annuity amounts under the LIC Smart Pension Plan are Rs. 1,000 per month, Rs. 3,000 per quarter, Rs. 6,000 per half-year and Rs. 12,000 per year.

Is it possible to avail of a loan against this policy?

Yes, the LIC Smart Policy Plan provides a loan at any time after 3 months from the completion of the policy or after the expiry of the free-look period, whichever is later, under the annuity options E1, E2, E3, E4, E5, F, and J. The maximum loan amount that can be granted will be such that the effective annual interest amount payable on the loan does not exceed 50% of the annual annuity amount, subject to a maximum of 80% of the policy's surrender value.

Are there any special benefits for National Pension System subscribers?

Yes, an incentive of up to 3% is provided for buying the LIC Smart Pension Plan through the NPS-Exit website. Additionally, the minimum annuity and the minimum purchase price will be as per the PFRDA rules and regulations. However, the minimum purchase price cannot be less than Rs. 50,000.

How does this plan ensure financial security for dependents with disabilities?

The LIC Smart Pension Plan can be purchased to benefit a dependent person with a disability (Divyangjan) life as a nominee or annuitant in the following ways:

The proposer can purchase a single-life immediate annuity with a return of purchase price (Annuity option F) on own life. When the annuitant or proposer dies, the death benefit will compulsorily be utilised to purchase the immediate annuity on the life of the Divyangjan, who is the nominee.
The proposer can purchase a joint-life annuity option G2 or J with Divyangjan as the secondary annuitant, where Divyangjan will receive the annuity payments till he/she is alive.

About the Author

Mayashree Acharya

Senior Content Writer

I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more

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