LIC Saral Pension (Plan No. 862, latest UIN 512N342V04/05) is a standard IRDAI‑mandated single‑premium immediate annuity plan that gives guaranteed lifelong pension against a one‑time lump sum.

Plan type and core structure

• Single‑premium immediate annuity: You pay a one‑time purchase price; pension starts immediately in the chosen mode (monthly/quarterly/half‑yearly/yearly).
• Standard product: Features and options are standardised by IRDAI; all insurers’ “Saral Pension” follow the same basic framework, with LIC branding it as LIC’s Saral Pension.
• Non‑linked, non‑participating: No market link and no bonuses; annuity rate is fixed at purchase and remains guaranteed for life.

Annuity options

LIC Saral Pension offers exactly two options, chosen at inception and cannot be changed later.

• Option I – Life Annuity with Return of 100% of Purchase Price (Single life)
  • Pension is paid to the annuitant for life.
  • On death, 100% of purchase price is paid to nominee; after that, pension stops.
• Option II – Joint Life Last‑Survivor Annuity with Return of 100% of Purchase Price
  • Pension is paid as long as at least one of the two lives (annuitant or spouse) is alive.
  • On first death, pension continues to the surviving spouse for life.
  • On death of the last survivor, 100% of purchase price is paid to nominee; then pension stops.

Annuity can be received yearly, half‑yearly, quarterly, or monthly; higher frequency means slightly lower per‑annum rate.

Eligibility and key parameters

Summarised from current public descriptions; exact latest grid is in LIC’s brochure/policy document for UIN 512N342V04/05.

• Entry age:
  • Minimum: 40 years.
  • Maximum: 80 years.
• Minimum annual annuity: ₹12,000 per year (so purchase price must be high enough to generate this).
• Minimum purchase price: commonly ₹5 lakh in examples; actual minimum is “as required to secure ₹12,000 p.a. annuity”, with slab‑wise incentives above ₹5 lakh.
• Maximum purchase price: No stated upper limit, subject to underwriting/AML guidelines.
• Annuitants:
  • Option I – single life only.
  • Option II – joint life only with spouse (must also meet age criteria).​

There are rebates on annuity rate for higher purchase‑price slabs and for less frequent annuity modes; additional 2% annuity rate hike is given for online purchase.

Death benefit, surrender and loan

• Death benefit (both options): Nominee receives 100% of purchase price on death (single life: on death of annuitant; joint life: on death of last survivor).
• Surrender: Allowed after 6 months from policy inception if annuitant, spouse or child is diagnosed with specified critical illness; on approval, 95% of purchase price is refunded after deducting any outstanding loan.​
• Loan: Available after 6 months from commencement. In joint‑life, spouse can avail loan after annuitant’s death.​
  • Interest must not exceed 50% of annual annuity and is recovered from annuity payouts.​

Example illustration

For a purchase price of ₹5,00,000, age 45 (single life), yearly annuity amounts in one illustration are around ₹30,000 p.a. (≈6% before tax), with full purchase price returned on death. Another example shows ₹10 lakh purchase at age 60 giving about ₹60,000 p.a. in joint‑life option, with return of purchase price on last death.

Additional points and current status

• Being a standard immediate annuity, LIC pitches it as a simple, no‑frills pension for conservative retirees who want guaranteed lifetime income plus return of capital to heirs.
• LIC’s withdrawn‑plans list for FY 2024‑25 shows “LIC’s Saral Pension, 862” as withdrawn, so new sales status may now be “closed” even though details remain on aggregators; always check LIC’s live‑plans page before pitching fresh cases.