LIC New Pension Plus Plan (867) Calculator

LIC New Pension Plus Plan (867) Calculator

What this calculator does

LIC's New Pension Plus (Plan 867) is a unit-linked, non-participating pension plan. Instead of a fixed sum assured, your premiums (net of charges) buy units in a fund you choose, and that fund grows (or shrinks) with market-linked returns until your vesting age - the age at which you retire from the plan and start drawing a pension.

At vesting, you can take up to 60% of the accumulated fund as a tax-free lump sum (commutation), and the remainder must be used to purchase an annuity - a regular pension paid for life (or a chosen payout term).

This calculator gives you an indicative estimate of:

• the fund value you'd accumulate by your chosen vesting age
• the guaranteed additions credited along the way
• the lump sum you could commute at vesting
• the annuity purchase price and the estimated pension it would buy

based on your current age, vesting age, annual premium, and chosen fund option.

Formula Used

Each policy year, your premium is reduced by an allocation charge before it buys units, the fund then grows at your chosen fund option's assumed net annual return, and a policy administration charge is deducted:

$$NetPremium_{year} = AnnualPremium \times (1 - AllocationCharge_{year})$$ $$Fund_{year} = \left(Fund_{year-1} + NetPremium_{year}\right) \times (1 + NetReturn) - AdminCharge_{year}$$

Allocation charges taper from 6% in year 1, to 4% in years 2-5, to 2% from year 6 onward. The administration charge starts at ₹500 in year 1 and escalates 3% every year.

Guaranteed Additions (a loyalty credit) are added as a percentage of one annualized premium: 3% at the end of policy year 6, then 5% at the end of every 5th year starting from year 10.

At vesting, the accumulated fund is split into a commuted lump sum and an annuity purchase price:

$$LumpSum = FundValue_{vesting} \times \frac{Commutation\%}{100}$$ $$AnnuityPurchasePrice = FundValue_{vesting} - LumpSum$$

The purchase price converts to a yearly pension using an illustrative annuity conversion rate that rises with your vesting age (older vesting ages get a higher payout rate per rupee of purchase price, since the expected payout period is shorter):

$$AnnualPension = AnnuityPurchasePrice \times AnnuityRate(VestingAge)$$

These rates (net fund returns, charges, guaranteed-addition schedule, and annuity conversion rates) are illustrative assumptions for estimation purposes, not LIC's official rate tables - always check the current benefit illustration from LIC for exact figures.

How to use it

1. Enter your current age (18-65 years).
2. Enter the age at which you want your pension to start (vesting age, 45-80 years).
3. Enter the annual premium you plan to pay.
4. Choose a fund option - Bond Fund (conservative), Secured Fund, Balanced Fund, or Growth Fund (aggressive) - each with a different assumed rate of return.
5. Choose what percentage of the fund you'd like to commute as a lump sum at vesting (0-60%).
6. Submit to see your estimated fund value at vesting, guaranteed additions, lump sum, annuity purchase price, and estimated annual/monthly pension, plus a year-wise fund growth snapshot.

Example

Age 30, vesting at 60 (30-year term), ₹50,000 annual premium, Balanced Fund (9% assumed return), 60% commutation:

• Total premiums paid over 30 years: ₹15,00,000
• Total guaranteed additions credited: ₹14,000
• Estimated fund value at vesting: ₹71,67,579
• Lump sum commuted (60%): ₹43,00,547
• Annuity purchase price: ₹28,67,031
• Estimated annual pension: ₹1,86,357 (about ₹15,530/month)