What is pension plan?
Pension plan offers the dual benefits of insurance and investment. In this plan, the policyholder regularly pays premium to the insurance company to build up corpus over the time. On maturity, this corpus is repaid to the policyholder in the form of regular income. However, in case the insured dies within the policy tenure, the nominee will be entitled to get the sum assured along with bonus.
What is the accumulation phase?
Accumulation phase is the time during which you can regularly pay premiums of your LIC to get income post retirement in the form of pension.
How is LICs pension plan different from term insurance plans?
Although both pension plan and term insurance offer financial protection, there is a basic difference between both of them. A pension plan gives financial security to the policyholder after retirement. In case of a sudden demise of the insured, the nominee will be entitled to get benefits. However, a term insurance pays only after the policyholders death. In case the insured survives the tenure, nothing is paid.
What happens if I fail to pay the premium of LIC pension plan on time?
Usually you get a grace period of 15-30 days during which you can pay your premiums once it is overdue. However, if you do not pay premium within this duration and as long as your policy has cash value, LIC will automatically pay your overdue premium by taking a loan against the policy.
Why should I buy LICs pension plan when I already have a provident fund (PF) account?
Yes you should buy LICs pension plan even though you have a provident fund account. The rising inflation will make your PF amount relatively insufficient. As you grow old, you become more vulnerable to different ailments and it means an increase in your medical expenses. It is not a great idea to rely only on provident fund account to meet your rising lifestyle needs.