On September 5, Life Insurance Corporation (LIC) launched New Pension Plus, a new non-participating, unit-linked individual pension plan. It enables the policyholder to save in a systematic and disciplined manner. When the period expires, it can be turned into monthly income via an annuity plan.
People can buy the plan as a single premium payment policy or as a recurring premium payment policy. The premium will be paid regularly during the policy's duration.
The policyholder can also select the amount of premium and the policy term based on the policy's minimum and maximum premium limits, policy term, and vesting age. He or she may also, subject to a few limitations, prolong the accumulating time under the same terms and conditions.
Guaranteed additions will be paid as a percentage of a one-year premium under an active policy. The guaranteed addition on regular premiums varies from 5.0-15.5 percent, with single premiums paying up to 5% at the end of a policy year. The number of guaranteed additions can be utilized to acquire units in the fund type of choice.
The policyholder's premiums can be invested in one of four types of funds. Each premium paid will be subject to a premium allocation charge. The balance amount, known as the allocation rate, is the portion of the premium that is used to acquire units of a fund selected by the policyholder. Policyholders will also be allowed to swap funds four times each year.
LIC made its initial public offering (IPO) in May of this year. It had a favorable reaction from bidders, as it was subscribed 2.95 times on the last day of bidding, with the portion earmarked for qualified institutional buyers (QIBs) completely booked.
The bids received totaled 47.83 crores, compared to the offered size of 16.21 crores. The price band for the LIC IPO was defined at Rs 902-949 per share, with the corporation offering a discount of Rs 60 per share for policyholders and Rs 45 per share for retail investors and LIC workers.
