LIC's unit-linked pension plan: invest in market-linked funds during
your working years, then convert the corpus to a lifetime annuity at retirement. Up to
60% of the vesting corpus is tax-free under §10(12A) — the rest goes
into an annuity.
Age 25–70Regular premiumTerm 10–42 yrsMarket-linked60% lump sum tax-free
Illustrative figures. Corpus at vesting depends on actual market returns.
Charges are based on illustrative CIS data — verify with LIC before purchasing.
Not investment advice.
yrs
25 yrs70 yrs
₹
₹10,000₹50,00,000
1042
Fund can be switched at any time (free of charge during the policy term).
Total premiums over 20 years₹12,00,000
Est. total charges (PAC + admin + FMC)₹3,48,972
Charges as % of total premiums29.1%
Conservative (4% gross)
₹14,83,330
2.0% p.a. XIRR
Moderate (8% gross)
₹23,44,719
6.0% p.a. XIRR
Optimistic (12% gross)
₹37,93,574
10.0% p.a. XIRR
Corpus at age 55 (vesting). 4% and 8% are IRDAI-mandated illustration
rates. 12% is illustrative only.
Vesting split (moderate scenario, age 55)
Lump sum (max 60%, tax-free u/s 10(12A))₹14,06,832
Mandatory annuity (min 40%)₹9,37,888
Estimated monthly annuity income from the 40%: ₹5,549/month(illustrative — at immediate annuity rate at age 55;
actual rate at vesting determined by the annuity insurer)
Illustrative corpus at vesting — representative scenarios (8% moderate, Balanced fund)
Assumes ₹60,000/year premium, Balanced Advantage fund (1.25% FMC), 8% gross return scenario.
Charges: PAC 5%/4%/3%/2%/1%/0%/0%, admin ₹540/year. Figures are illustrative — actual returns
depend on market performance. Last updated: 1 May 2026.
Entry age
Term
Vesting age
Total premiums
Corpus (8% scenario)
Lump sum (60%)
Annuity corpus (40%)
30 years
30 yrs
60 years
₹18,00,000
₹51,62,338
₹30,97,403
₹20,64,935
35 years
25 yrs
60 years
₹15,00,000
₹34,84,821
₹20,90,893
₹13,93,928
40 years
20 yrs
60 years
₹12,00,000
₹22,81,485
₹13,68,891
₹9,12,594
45 years
15 yrs
60 years
₹9,00,000
₹14,18,414
₹8,51,048
₹5,67,366
50 years
15 yrs
65 years
₹9,00,000
₹13,68,760
₹8,21,256
₹5,47,504
Returns are NOT guaranteed. The 60/40 split applies when corpus exceeds ₹5 lakh; if ≤ ₹5 lakh,
the entire amount can be taken as lump sum. Source: LIC CIS Plan 867 (licindia.in).
Our Take
New Pension Plus (Plan 867)
Editorial rating:
3.5/5
— Good for long accumulation horizons; charges and market risk need careful evaluation
New Pension Plus (Plan 867) is LIC's unit-linked pension plan — premiums are invested in market-linked funds (equity, balanced, bond, or secured) during the accumulation phase. At vesting you can take up to 60% as a tax-free lump sum (§10(12A)) and must use at least 40% to purchase an annuity. If the total corpus is ₹5 lakh or less, the entire amount can be taken as a lump sum. The returns are uncertain (market-linked) but historically equity funds have significantly outperformed guaranteed annuity accumulation over 15+ year horizons. Charges (PAC, FMC, admin) reduce the effective return — the calculator shows this explicitly.
Market-linked accumulation: equity/balanced/bond/secured fund choices
At vesting: up to 60% tax-free lump sum (§10(12A)), min 40% to annuity
Corpus ≤ ₹5 lakh: entire amount as tax-free lump sum — no mandatory annuity
Lock-in: 5 years (pension fund category)
PAC reduces in later years (5% → 0% by year 6); FMC varies by fund
Annuity at vesting purchased from any IRDAI-registered insurer — shop around
Fund switches are free and unlimited. FMC is charged daily (deducted from NAV).
Verify the exact fund composition from the LIC CIS at time of purchase.
Vesting Rules — The 40/60 Split
At vesting (the date when the policy matures), you have two options for the corpus:
Situation
Lump sum allowed
Annuity required
Corpus > ₹5,00,000
Up to 60% (tax-free under §10(12A))
Minimum 40% → annuity purchase from any IRDAI-registered insurer
Corpus ≤ ₹5,00,000
100% as lump sum (tax-free under §10(12A))
None required
Vesting during deferment
The policy can also be surrendered after the lock-in period. Surrender value = fund value.
You can purchase the mandatory annuity from any IRDAI-registered life
insurer — not just LIC. Shop around for the best annuity rate at your vesting age.
Charges
Premium Allocation Charge (PAC)
Year 1: 5% · Year 2: 4% · Year 3: 3% · Year 4: 2% · Year 5: 1% · Year 6+: 0%
Fund Management Charge (FMC)
0.50%–1.35% p.a. depending on fund (charged on NAV daily)
Policy Administration Charge
₹540/year (illustrative — verify from CIS)
Fund switch charge
Nil
Surrender charge
Nil after lock-in (5 years)
Charges above are illustrative, based on LIC CIS (Plan 867) downloaded 2026-04-26.
The actual charges depend on your age and premium amount — verify from the CIS before buying.
⚠ Tax Treatment
Premiums paid
Sec 80CCC deduction — up to ₹1.5L per year within the overall
Sec 80C ceiling.
Lump sum at vesting (up to 60%)
Tax-free under §10(12A) — this is the key tax advantage of pension ULIPs.
Annuity income (from the 40%)
Fully taxable as "income from other sources" at your marginal slab
rate. At the 30% slab: ₹1,00,000 gross annuity → ₹70,000 net.
Full surrender / partial withdrawal
After lock-in: fund value taxable as income from other sources.
Death benefit: typically exempt under §10(10D) but verify for pension plans.
How this compares to NPS: NPS allows 60% tax-free lump sum and 40%
mandatory annuity — the same as New Pension Plus. However, NPS has significantly
lower charges (0.09% FMC vs 1.25% here) and an additional tax deduction of ₹50,000
under §80CCD(1B). New Pension Plus offers life cover during accumulation, which NPS
does not.
IRDAI Unit Linked Insurance Products (ULIPs) Guidelines, 2019 — Schedule II
(Illustration Format: 4%, 8%, 12% return scenarios).
Fund charges are illustrative. The exact FMC and PAC are in the CIS at time of
purchase and may differ from the values used in this calculator.
This page is an independent analysis. Asymmetrica is not affiliated with or endorsed by
LIC of India. Returns in unit-linked pension plans are NOT guaranteed — past performance
does not indicate future results. Verify all charges and terms directly with LIC before
purchasing.