LIC New Pension Plus (Plan No 867) – Should you invest?

LIC has introduced new pension plan, LIC New Pension Plus 867. This is non participating, unit linked insurance plan that again comes with fancy word “guaranteed addition”. The plan indicates that LIC would provide guaranteed additions between 5% to 15% of yearly premium. What are the features of LIC Pension Plus? Who is eligible to take this plan?  Should you invest in LIC New Pension Plus 867 or avoid? We would review this pension plan in this post.

Also Read: Best Term Insurance Plans to purchase in 2022

LIC New Pension Plus Plan No 867 – Features in this plan

LIC has launched this plan from 5th September, 2022.

  • This is non participating, unit linked pension plan which aims for building corpus with systematic savings converting into regular income on retirement after taking the annuity plan.
  • One can take immediate or deferment pension option.
  • This pension plan can be taken with a single premium or regular premium option. Under regular premiums, one needs to invest for the entire term of the policy.
  • This pension plan provides an option to extend the accumulation period or deferment period within the same policy with same terms and conditions.
  • An investor can invest in 4 different funds available to them.
  • Investors have an option for 4 free switches between the funds in a policy year.
  • This plan offers guaranteed additions of 5% to 15.5% of yearly premium at specific intervals.
  • For the premiums paid, there would be a premium allocation charge. The balance would be used in purchasing the units in the fund chosen by the investor.
  • Partial withdrawal of the units (10% to 25%) is allowed for 3 times in a policy period.
  • Investors can purchase this plan through online or through offline mode from agents or by visiting any of the LIC branches.

LIC New Pension Plus 867 - Features, Eligibility, Positive and Negative Factors and Review and Analysis

LIC New Pension Plus 867 – Eligibilty to take this plan

Here are the eligibility criteria.

  • Minimum age of entry is 25 years and maximum age of entry is 75 years.
  • Minimum vesting age is 35 years and the maximum is 85 years. Means, one can get the pension income between 35 to 85 years of age.
  • Policy term is 10 years to 42 years.
  • Under single premium, minimum investment is Rs 1 Lacs.
  • Under the regular premium plan option, minimum premium is Rs 3,000 (monthly), Rs 9,000 (quarterly),  Rs 16,000 (half yearly) and Rs 30,000 (yearly).
  • Minimum and maximum sum assured would depend on the premium amount, mode of payment, tenure and age of the individual.

Also Read: How good is LIC Bachat Plus Insurance Plan?

LIC New Pension Plus – Various Funds available in this plan

Here are the 4 fund options available for investor.

1) Pension Bond Fund:

  • 60% to 100% in Government bonds and securities or corporate debt and
  • 0% to 40% in Money Market Instruments
  • Zero investment in equity

2) Pension Secured Fund:

  • 50% to 90% in Government bonds and securities or corporate debt and
  • 0% to 40% in Money Market Instruments
  • 10% to 50% in equity

3) Pension Balanced Fund:

  • 30% to 70% in Government bonds and securities or corporate debt and
  • 0% to 40% in Money Market Instruments
  • 30% to 70% in equity

4) Pension Growth Fund:

  • 0% to 60% in Government bonds and securities or corporate debt and
  • 0% to 40% in Money Market Instruments
  • 40% to 100% in equity

LIC New Pension Plus – What are guaranteed Additions?

LIC indicates that this pension plan comes with guaranteed additions. Guaranteed addition would depend on the premium mode.  Let us get into more info about this.

1) For Regular Premium mode plan

  • 6th Year – 5%
  • 10th Year – 10%
  • 11-15 years – 4% every year
  • 16-20 years – 5.5% every year
  • 21-25 years – 7% every year
  • 26-30 years – 8.75% every year
  • 31-35 years – 10.75% every year
  • 36-40 years – 13% every year
  • 41-42 years – 15.5% every year

As an illustration, if one takes Rs 1 Lac yearly premium plan with 42 years tenure, one would get Rs 2.91 lacs as a guaranteed addition to the total premiums of Rs 42 lacs (Rs 1 Lac x 42 years).

2) For Single Premium mode plan

  • 6th Year – 4%
  • 10th Year – 5%
  • 11-15 years – 1.25% every year
  • 16-20 years – 1.5% every year
  • 21-25 years – 2% every year
  • 26-30 years – 2.5% every year
  • 31-35 years – 3% every year
  • 36-40 years – 3.75% every year
  • 41-42 years – 4.5% every year

LIC New Pension Plus – Positive Factors

  • This pension plan is a unit linked plan. Surplus amount beyond premium allocation would be invested in government and corporate bonds and equity. This portion can provide higher returns compared to plain bank FDs.
  • One can do a partial withdrawal of units in case of any emergency.
  • One can extend or defer the policy period with same terms and conditions.
  • LIC is a trusted brand for decades.

LIC New Pension Plus – Negative Factors

  • There are various allocation charges like premium allocation charge, policy administration charges, fund management fees, partial withdrawal charges, discontinuance charges, and other charges. These premium allocation charges can eat away some of the investments and only balance would get invested.
  • Guaranteed additions indicated as 5% to 15.5% are very low when you see actual returns. As an example given earlier, investment of Rs 1 lac every year for 42 years tenure would give Rs 2.9 lacs compared to total investment of Rs 42 lacs.
  • LIC’s pension plans in general provide low returns.

How to compute premium in this plan?

You can use Lic new pension plus 867 calculator at LIC website to compute the premium amount based on various parameters.

Also Read: Best LIC Term Insurance Plans for 1 Crore

LIC New Pension Plus Plan No 867 Review – Should you invest?

Once you have gone through the above plan, you would have noticed that this plan is the replica of National Pension Scheme (NPS) where one can opt for investments in govt bonds, corporate bonds and equity.

Investments in corporate bonds and equity are risky. On the other side, investments in govt bonds provide low returns while there is no credit risk or default risk and safe investments.

LIC plans in general provide low returns. Guaranteed additions is the fancy word used by insurance companies to attract investors. However, the actual returns are low in this pension plan.

Investors who trust LIC brand and super excited with low returns can opt for such pension plans. Otherwise, one can avoid this LIC’s new pension plus plan.

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Suresh KP


  1. Please throw lights on taxation aspects of New pension plus plan ie Any tax rebate for investment or partial withdrawal or surrender or commutation or death claim. SMukhopadhyay. Kolkata. West Bengal

  2. Respected Sir

    I recently visited this website and felt the need of a search bar to facilitate easy searching for the articles by keywords.

    E.g. I may search for “LIC” then all the articles with the keyword LIC (in the title or in the body) should appear in the search result.

    Kindly provide this feature for your valid visitors

  3. Deaar Sir,

    I have gone through your review which is frank and perfect about the pros and cons of this new product.

    Thank you for that.

    However a layman cannot understand the 36 page document.

    There are many charges with varying rates mentioned.

    I want to know about monthly pension for a single premium of Rs 5 Lakhs for a period of 8 years. I am now 66 years old.

    Can you give me the reply.

    Thanking you

    Yours faithfully

    A Alfred Newman Bright

    Layman cannot understand the 36 page document.

    In simple

  4. Suresh,

    There is a typo in the last part.
    “LIC New Pension Plus – Positive Factors” is repeated twice where as the last paragraph should read as “Negative Factors”.

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