LIC Saral Pension 862 is the IRDAI standard immediate annuity: you pay one lump sum between age 40 and 80 and get a fixed pension for life, and the full purchase price goes to your nominee on death. LIC's brochure shows ₹62,300 a year for a 60-year-old investing ₹10 lakh on yearly payout; monthly payout works out to about ₹4,974 a month. No GST applies.
Saral Pension 862 Pension Calculator
Your estimate
- Annuity rate (yearly)
- 5.97%
- Death benefit100% of the purchase price returned to the nominee
- ₹10,00,000
- Years of pension to equal the price
- 16.8 years
- Purchase price₹10,00,00046%
- Pension in first 20 years₹11,93,66054%
Year-wise pension and amount payable to the nominee
| Year | Age | Yearly pension | Total pension so far | Paid to nominee on death |
|---|---|---|---|---|
| 1 | 60 | ₹59,683 | ₹59,683 | ₹10,00,000 |
| 2 | 61 | ₹59,683 | ₹1,19,366 | ₹10,00,000 |
| 3 | 62 | ₹59,683 | ₹1,79,049 | ₹10,00,000 |
| 4 | 63 | ₹59,683 | ₹2,38,732 | ₹10,00,000 |
| 5 | 64 | ₹59,683 | ₹2,98,415 | ₹10,00,000 |
| 10 | 69 | ₹59,683 | ₹5,96,830 | ₹10,00,000 |
| 15 | 74 | ₹59,683 | ₹8,95,245 | ₹10,00,000 |
| 20 | 79 | ₹59,683 | ₹11,93,660 | ₹10,00,000 |
| 25 | 84 | ₹59,683 | ₹14,92,075 | ₹10,00,000 |
| 30 | 89 | ₹59,683 | ₹17,90,490 | ₹10,00,000 |
Individual life insurance premiums are exempt from GST from 22 September 2025. Figures are estimates based on typical rates and may differ from LIC’s official quote.
What is LIC Saral Pension Plan 862?
LIC Saral Pension (Plan 862) is LIC’s version of the standard immediate annuity plan that IRDAI asked every life insurer to offer. “Standard” means the features are the same across insurers; only the annuity rates differ. You pay one lump sum, called the purchase price, and LIC starts paying you a pension straight away. The pension stays fixed for the rest of your life.
The plan has one clear promise that makes it popular with retirees: your capital is not lost. Under both annuity options, the full purchase price is returned to your nominee after death. You give up some pension for that safety, and the calculator above shows how much pension you get in return.
Saral Pension 862 at a glance
| Feature | Details |
|---|---|
| Plan number | 862 |
| Plan type | Single premium, non-linked, non-participating immediate annuity |
| Entry age | 40 to 80 years |
| Options | Single life or joint life (spouse only), both with 100% return of purchase price |
| Pension modes | Monthly, quarterly, half-yearly, yearly |
| Minimum pension | ₹1,000/month, ₹3,000/quarter, ₹6,000/half-year, ₹12,000/year |
| Maximum purchase price | No limit |
| Medical test | Not required |
| Loan | After 6 months |
| Surrender | After 6 months, only on specified critical illness (95% of purchase price) |
| GST | Nil (exempt from 22 Sep 2025) |
Eligibility
| Condition | Single life | Joint life |
|---|---|---|
| Minimum entry age | 40 years | 40 years (both) |
| Maximum entry age | 80 years | 80 years (both) |
| Who can be the second annuitant | — | Spouse only |
| Policy term | Whole life | Until the second death |
Choose the option carefully at the start. Once the policy is issued, you cannot switch from single to joint life or the other way round.
Single life vs joint life
Option 1: life annuity with return of 100% purchase price. You receive the pension as long as you live. When you die, your nominee gets back the full purchase price.
Option 2: joint life last survivor annuity with return of 100% purchase price. The pension is paid while either you or your spouse is alive, at the same amount. After the second death, the purchase price goes to the nominee. Because LIC may have to pay for two lifetimes, the pension is lower. LIC’s brochure shows ₹61,600 a year on ₹10 lakh for a 60-year-old with a 55-year-old spouse, against ₹62,300 for single life.
Tip: if your spouse has little or no income of their own, the joint life option usually makes more sense. The small drop in pension buys lifelong income for the survivor.
How the Saral Pension amount is calculated
LIC quotes an annuity rate, the yearly pension as a percentage of the purchase price. This calculator follows the figures in LIC’s published Saral Pension sales brochure: for a ₹10 lakh purchase price at age 60 on yearly payout, the brochure shows ₹62,300 a year under Option I and ₹61,600 under Option II (spouse aged 55), and the calculator reproduces both exactly. Pensions at other ages, joint-life age pairs and payout modes are estimated from that point, so treat them as approximate. The steps:
- It looks up the rate for your age (for joint life, the average age of the couple).
- It adds the higher purchase price incentive and 2% more if you buy online. LIC gives this incentive in slabs (₹5–10 lakh, ₹10–25 lakh, ₹25 lakh and above) but does not publish the amounts, so the calculator applies a 1% boost from ₹5 lakh.
- It adjusts for the payout mode. Monthly payouts add up to slightly less than one yearly payout because LIC pays you earlier.
- It checks that each instalment meets the plan minimum.
Worked example: a 60-year-old invests ₹10 lakh through an agent under single life.
| Payout mode | Pension per instalment | Pension per year |
|---|---|---|
| Yearly | ₹62,300 | ₹62,300 |
| Monthly | ₹4,974 | ₹59,683 |
Buying online raises the yearly pension to about ₹63,546. After about 16 years, the pension received equals the purchase price. From then on, every rupee is extra, and the purchase price still goes to the nominee.
The age-wise chart below the calculator shows the yearly pension on ₹10 lakh from age 40 to 80. Rates rise only gently with age in this plan, because the purchase price has to be returned whenever death occurs.
Death benefit
- Single life: the pension stops and the nominee receives 100% of the purchase price.
- Joint life: on the first death, the same pension continues to the survivor. On the second death, the nominee receives 100% of the purchase price.
Because the capital comes back, Saral Pension works well for people who want to leave their savings intact for their children.
Loan and surrender
- Loan: available after six months, sized so that the yearly interest does not exceed 50% of the annual pension. Interest is deducted from the pension, so your payout falls while the loan runs.
- Surrender: allowed after six months only if the annuitant, their spouse or their children are diagnosed with a listed critical illness. LIC pays 95% of the purchase price.
- No free exit otherwise: treat the money as locked in for life.
Tax treatment
- The purchase price may be claimed within the Section 123 of the Income-tax Act, 2025 (earlier Section 80C)/80CCC limit of ₹1.5 lakh under the old tax regime.
- The pension is taxable as income at your slab rate every year.
- The purchase price returned to the nominee is generally not taxed as income.
- No GST is charged on the purchase price from 22 September 2025. Before that date, single-premium annuities carried 1.8% GST.
Who should buy Saral Pension?
It suits you if you:
- are retired or close to retirement and want a guaranteed monthly income with no market risk;
- want your savings to pass to your children instead of being used up;
- prefer a simple product with only two choices and no medical test.
It is less suitable if you want the highest possible pension. A plain life annuity with no return of capital pays noticeably more. Compare it with LIC Smart Pension 879, which offers several annuity options, or LIC New Jeevan Shanti if you can wait a few years before the pension starts.
Saral Pension 862 vs Smart Pension 879
| Point | Saral Pension 862 | Smart Pension 879 |
|---|---|---|
| Design | IRDAI standard, same everywhere | LIC’s own plan |
| Options | 2 (both return purchase price) | Many (life, return of price, increasing, guaranteed period, joint) |
| Entry age | 40–80 | 18 upwards |
| Pension on ₹10 lakh at 60 (yearly) | ₹62,300 | about ₹64,900 with return of price, ₹85,000 without |
Saral Pension keeps things simple. Smart Pension gives more flexibility, a much higher pension if you do not need the capital returned, and at 60 even its return-of-price option pays a little more. For a broader comparison, try our LIC pension calculator.
How to use this calculator
- Type the purchase price or move the slider.
- Enter the annuitant’s age.
- Choose single life or joint life and, for joint life, the spouse’s age.
- Pick the payout mode.
- Choose agent or online, then read the pension per instalment, the yearly total, the annuity rate and the year-wise table.
The age-60, ₹10 lakh yearly figures match LIC’s brochure; everything else is an estimate built from them. LIC revises annuity rates from time to time, so confirm the exact quote with LIC or your agent before paying.
Frequently asked questions
How much pension will I get from LIC Saral Pension for ₹10 lakh?
LIC's brochure shows ₹62,300 a year for a 60-year-old buying offline on yearly payout; monthly payout works out to about ₹4,974 a month. The rate rises gently with age: by our estimate about ₹56,928 a year at 40 and ₹67,663 at 80. Check LIC's current quote before buying, because annuity rates are revised from time to time.
What is the minimum purchase price for Saral Pension 862?
There is no fixed rupee minimum. The minimum purchase price is whatever buys a pension of ₹1,000 a month, ₹3,000 a quarter, ₹6,000 a half-year or ₹12,000 a year. For monthly payout, this calculator needs about ₹2.1 lakh at age 60 and ₹2.3 lakh at age 40.
What does the nominee get under Saral Pension?
Both options return 100% of the purchase price. Under single life, the nominee receives it when the annuitant dies. Under joint life, the pension first continues to the surviving spouse, and the purchase price is paid after the second death.
Can I surrender LIC Saral Pension 862?
Only in limited cases. After six months, the policy can be surrendered if the annuitant, their spouse or their children are diagnosed with one of the listed critical illnesses. LIC then pays 95% of the purchase price. Ordinary surrender for any other reason is not allowed.
Is the pension from Saral Pension taxable?
Yes. The yearly pension is added to your income and taxed at your slab rate. The purchase price returned to the nominee is generally not taxed as income. The lump sum may be eligible for deduction within the Section 123 (earlier 80C)/80CCC limit under the old tax regime.
Is there GST on the Saral Pension purchase price?
No. From 22 September 2025, individual life insurance and annuity policies are exempt from GST, so the purchase price is all you pay. Earlier, a 1.8% GST was charged on single-premium annuities.
Can I take a loan against Saral Pension?
Yes. A loan is available after six months from the start of the policy. The loan is capped so that its yearly interest is at most 50% of your annual pension. Interest is recovered from your pension instalments, so your pension reduces while the loan is outstanding.
Disclaimer: LIC Premium Calculators is an independent website. We are not affiliated with, endorsed by or connected to Life Insurance Corporation of India. All figures are estimates for illustration; confirm exact premiums and benefits with LIC or a licensed agent before buying.