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LIC’s newest Pension Plan

by | Sep 9, 2018 | Finance, Retirement

Recently, a friend of mine sent over two messages that he had received from an LIC agent regarding a wonderful new Pension Plan that LIC has launched.

Personally, I am against Pension Plans per se. They are terrible investments. I analysed this one. I am assuming that what was sent to my friend is correct. I could not cross check it myself.

Here are the messages:

This one gives a teaser of how great the scheme is. Though it says the returns are tax free, I didn’t get a confirmation anywhere on the net about this. Usually, all pensions are taxable.

Let us assume a case where a person at 50 years of age, invests Rs.10 lacs in this pension plan and opts for a 10 year deferment. This means that he will start getting his pension from the 61st year of his life till he dies. Assuming he dies at 80, the table looks like this. LIC will invest this 10 lacs and should make at least an average return of 10% per year. For the first 10 years, it does not pay out anything. After that, it pays out 12.83% (of the original 10 lac investment). LIC still has the remaining amount which it con keep on investing.

Click this link for the full working of this plan:

Jeevan Santhi plan LIC working

At a reasonable investment return of 10% LIC makes over 82 lacs on this scheme. This was always my contention. It is much better to invest in a decent Mutual Fund – all the money remains yours! 

I would like to know if my calculations are wrong in any way. Please do respond.

If you want the Excel sheet associated with this calculations, do email me at

In the meanwhile, keep away from Pension Funds!


Niranjan Bangera



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Written By: niranjan

Financially Stupid Niranjan


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