LIC to offer up to six per cent annual return on Pension Plus

Life Insurance Corporation of India is ready to offer 6% annual return on its unit-linked pension product “Pension Plus”.

The unit-linked pension product-‘Pension Plus’ is thus far the only regular premium unit-linked pension plan based on IRDA guidelines prescribing to a minimum guaranteed return of 4.5%.

This move arrives at a time when the IRDA has been pushed to draw back the disputable 4.5% guaranteed return section following opposition from private life insuring companies, who indicated that such returns were not viable.

Furthermore, LIC is likely to continue with the existing scheme, even if the pension rules are revised in the coming months. The product ‘Pension Plus’ was launched in September 2010, and collected a premium of approximately Rs. 400 crore.

IRDA is now planning to drop the ‘guaranteed return clause’ in pension product norms, as private life insuring companies are refusing to launch any pension products.