LIC Smart Pension 879 is a single-premium immediate annuity: you invest a lump sum (minimum ₹1 lakh) and choose from 21 pension options, single or joint life. LIC's brochure sample, which this calculator reproduces, shows ₹10 lakh at age 60 paying ₹85,000 a year under option A (life annuity), or ₹64,900 a year under option F, which returns the purchase price to your nominee. No GST applies.
Smart Pension 879 Pension Calculator
Your estimate
- Annuity rate (yearly)
- 8.16%
- Death benefitPension stops on death; nothing is payable to the nominee.
- ₹0
- Total pension in 20 years
- ₹16,32,000
- Purchase price₹10,00,00038%
- Pension in first 20 years₹16,32,00062%
Year-wise pension and amount payable to the nominee
| Year | Age | Yearly pension | Total pension so far | Paid to nominee on death |
|---|---|---|---|---|
| 1 | 60 | ₹81,600 | ₹81,600 | ₹0 |
| 2 | 61 | ₹81,600 | ₹1,63,200 | ₹0 |
| 3 | 62 | ₹81,600 | ₹2,44,800 | ₹0 |
| 4 | 63 | ₹81,600 | ₹3,26,400 | ₹0 |
| 5 | 64 | ₹81,600 | ₹4,08,000 | ₹0 |
| 10 | 69 | ₹81,600 | ₹8,16,000 | ₹0 |
| 15 | 74 | ₹81,600 | ₹12,24,000 | ₹0 |
| 20 | 79 | ₹81,600 | ₹16,32,000 | ₹0 |
| 25 | 84 | ₹81,600 | ₹20,40,000 | ₹0 |
| 30 | 89 | ₹81,600 | ₹24,48,000 | ₹0 |
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 Smart Pension Plan 879?
LIC Smart Pension (Plan 879) is a non-participating, non-linked, single-premium immediate annuity plan. You pay one lump sum, the purchase price, and LIC pays you a pension for life. The pension amount is fixed at the start (or rises at a fixed rate under the increasing options), so it does not move with interest rates or the stock market.
What makes Smart Pension different from LIC’s standard Saral Pension is choice. Instead of two options, you pick from a menu: a plain life pension, a pension with return of your capital, a pension that increases every year, a pension guaranteed for a fixed number of years, or joint life options that protect a second family member. The joint life can be a spouse, parent, grandparent, child, grandchild, sibling or parent-in-law. The calculator above lets you compare them side by side.
Smart Pension 879 at a glance
| Feature | Details |
|---|---|
| Plan number | 879 (UIN 512N386V01) |
| Plan type | Single premium, non-linked, non-participating immediate annuity |
| Entry age | 18 to 85 for most options; 18 to 65 for E1/E2, 18 to 70 for E3 to E5, 18 to 100 for F |
| Minimum purchase price | ₹1,00,000 (₹50,000 for a Divyangjan dependant) |
| Maximum purchase price | No limit |
| Options | 21 options, A to J, single life and joint life |
| Pension modes | Monthly, quarterly, half-yearly, yearly |
| Minimum pension | ₹1,000/month, ₹3,000/quarter, ₹6,000/half-year, ₹12,000/year |
| Loan | Available under options E1 to E5, F and J |
| Extra benefit | Higher rates for online (+2.5%) and NPS exit (+3%) purchases, existing LIC policyholders (+0.15%) and larger purchase prices |
| GST | Nil (exempt from 22 Sep 2025) |
Annuity options in the calculator
The calculator uses LIC’s own option codes:
| Option | How it pays | On death |
|---|---|---|
| A: Life annuity | Fixed pension for life | Pension stops |
| B1 / B2 / B3 / B4: Certain 5, 10, 15 or 20 years, then life | Fixed pension for life, guaranteed for the chosen period | Payments continue to the nominee until the period ends |
| C1 / C2: Increasing | Pension rises by 3% or 6% (simple) each year | Pension stops |
| D: Life + return of balance purchase price | Fixed pension for life | Purchase price less pension already paid |
| E1 / E2: Early return at 75 | Pension for life; 50% or 100% of the price paid back at age 75 | Purchase price less any early return |
| E3 / E4: Early return at 80 | Pension for life; 50% or 100% of the price paid back at age 80 | Purchase price less any early return |
| E5: Staggered return | Pension for life; 5% of the price paid back each year from age 76 to 95 | Purchase price less any early return |
| F: Life + return of purchase price | Fixed pension for life | Nominee gets the purchase price |
| G1 / G2: Joint life | Pension for life; 50% or 100% continues to the secondary annuitant | Continues to the survivor |
| H1 / H2: Joint life, 50%, increasing | Rises 3% or 6% (simple) a year; 50% to the survivor | Continues to the survivor |
| I1 / I2: Joint life, 100%, increasing | Rises 3% or 6% (simple) a year; 100% to the survivor | Continues to the survivor |
| J: Joint life + return of price | Fixed pension while either annuitant is alive | Purchase price after the second death |
Options are chosen once at the start and cannot be changed later.
How the Smart Pension amount is worked out
The pension is the purchase price multiplied by an annuity rate that depends on your age and the option. Older buyers get higher rates because LIC expects to pay for fewer years.
This calculator follows LIC’s published brochure figures. The brochure’s sample for a ₹10 lakh purchase price at age 60 (secondary annuitant 55), yearly mode, bought through an agent by a new customer, shows ₹85,000 a year under option A and ₹64,900 under option F. The calculator reproduces all 21 sample amounts at that point exactly. Other ages are estimated from these figures, so treat them as approximate. The calculator:
- finds the tabular rate for your age and option (joint life options also use the secondary annuitant’s age);
- adds 2.5% to the tabular rate for an online purchase, or 3% on NPS exit;
- adds the high purchase price incentive per ₹1,000 of price: ₹2.30, ₹3.10, ₹3.60 or ₹3.80 from ₹5 lakh, ₹10 lakh, ₹25 lakh and ₹1 crore (₹1.40, ₹1.80, ₹2.10 or ₹2.30 for C1, C2, H1, H2, I1 and I2);
- applies LIC’s mode factor: 1 for yearly, 0.98 half-yearly, 0.97 quarterly and 0.96 monthly;
- checks that each instalment meets the minimum.
Worked example: ₹10 lakh at age 60
| Option | Yearly pension (yearly mode) | Monthly pension (monthly mode) |
|---|---|---|
| A: Life annuity | ₹85,000 | ₹6,800 |
| F: Return of purchase price | ₹64,900 | ₹5,192 |
| G2: Joint life 100%, secondary annuitant aged 55 | ₹74,000 | ₹5,920 |
| C1: Increasing 3% | ₹66,200 in year 1, ₹84,074 by year 10 | — |
With option B2 (10 years certain), a monthly payout comes to about ₹6,656. Buying option A online instead of through an agent raises the yearly pension to about ₹87,048. A 45-year-old investing ₹20 lakh under option F would receive about ₹10,066 a month.
The premium chart below the calculator shows the yearly pension on ₹10 lakh for ages 30 to 80 across five options. Notice how the plain life annuity climbs steeply after 65 (about ₹99,196 at 70 and ₹1,27,588 at 80) while option F moves only from about ₹60,735 at 30 to ₹67,031 at 80.
Tip: if you already hold an in-force LIC policy (or one that matured within the last year, or you are the nominee of a policyholder who died within the last year), LIC adds 0.15% to the tabular rate. The calculator does not include this, so ask for it when you buy.
Death benefit
The death benefit depends entirely on the option you pick. Under F and J, your nominee receives the full purchase price (under J, after both annuitants have died). Under D, the nominee gets the purchase price less the pension already paid, which falls to nil once the pension paid exceeds the price. Under E1 to E5, it is the purchase price less any early return already made. Under B1 to B4, the remaining guaranteed instalments are paid. Under the joint life options, the pension continues to the secondary annuitant. Under the plain life annuity and the single life increasing options, nothing is payable after death. That is why those options pay more while you are alive.
Loan and liquidity
A loan is available only under options E1 to E5, F and J, with interest recovered from the pension. Options F and J also carry a liquidity option: after 5 policy years you can take part of the policy as a lump sum, up to three times, with total withdrawals capped at 60% of the purchase price; the pension and death benefit then reduce in the same proportion. Surrender is allowed only under D, E1 to E5, F and J. Immediate annuities are meant for life, so do not invest money you may need back as a lump sum. Keep an emergency fund separately.
Tax treatment
- The purchase price may be claimed within the Section 123 of the Income-tax Act, 2025 (earlier Section 80C)/80CCC limit (old tax regime).
- The pension is taxable as income every year.
- Amounts returned to the nominee under return-of-price options are generally not taxed as income.
- No GST on the purchase price from 22 September 2025. Earlier, 1.8% GST applied to single-premium annuities.
Who should consider Smart Pension?
- Retirees who want the highest safe income and have other assets for their heirs: the life annuity option.
- People who want to leave the capital behind: the return-of-price options.
- Those worried about inflation: the increasing options, which start lower but catch up over time.
- Couples and families: the joint life options, so the pension does not stop when one annuitant dies.
Avoid putting all your retirement savings into any single annuity. Many planners suggest annuitising only the part needed to cover regular expenses.
Smart Pension 879 vs Saral Pension 862
LIC Saral Pension 862 is the IRDAI standard plan with just two options, both returning the purchase price, and entry from age 40. At 60, it pays about ₹62,300 a year on ₹10 lakh. Smart Pension’s return-of-price option F pays a little more (₹64,900), and Smart Pension also lets you choose a higher pension without capital return. If you want a pension that starts after some years, look at LIC New Jeevan Shanti. You can also compare against LIC Jeevan Akshay VII, another immediate annuity plan with many options.
How to use this calculator
- Enter the purchase price.
- Enter your age.
- Pick an annuity option. For joint life options, enter the secondary annuitant’s age.
- Choose the pension mode and whether you are buying through an agent, online or on NPS exit.
- Read the pension per instalment, the yearly pension, the death benefit and the year-wise table, which also shows how increasing options grow.
At age 60 the results match LIC’s brochure sample; other ages are estimates built from it. LIC revises annuity rates from time to time, so get an exact quote before you pay.
Frequently asked questions
How much pension does LIC Smart Pension give on ₹10 lakh?
LIC's brochure sample at age 60, yearly mode, bought through an agent, is ₹85,000 a year under option A (life annuity). On monthly payout that becomes ₹6,800 a month. With return of purchase price (option F) it is ₹64,900 a year. The final amount depends on LIC's rate on the day you buy, so treat other ages as indicative.
What is the minimum investment in Smart Pension 879?
The minimum purchase price is ₹1 lakh. For a policy bought for a disabled (Divyangjan) dependant, the minimum is ₹50,000. There is no maximum. The pension must also meet the minimum instalment of ₹1,000 a month or ₹12,000 a year.
Which Smart Pension option pays the highest pension?
The plain life annuity (option A) pays the most, because nothing is returned on death. Options that return the purchase price, guarantee payments for a fixed period or continue to a second person all pay less. The increasing options (C1, C2, H1, H2, I1, I2) start lower but grow each year.
What happens to the money when the pensioner dies?
It depends on the option. Under A and C1/C2, the pension simply stops. Under F and J, the nominee receives the full purchase price; under D, the price less pension already paid; under E1 to E5, the price less any early return. B1 to B4 pay until the certain period ends, and joint life options continue to the secondary annuitant.
Can I choose monthly pension in Smart Pension?
Yes. You can take the pension monthly, quarterly, half-yearly or yearly. Yearly gives the highest total. LIC applies a conversion factor of 0.96 to monthly payouts, so a monthly pension adds up to about 4% less over a year than a single yearly payout.
Is Smart Pension income taxable?
Yes. The pension is taxed as income at your slab rate. The purchase price may qualify for deduction within the Section 123 (earlier 80C)/80CCC limit under the old tax regime. There is no GST on the purchase price from 22 September 2025.
Should I choose Smart Pension or Saral Pension?
Choose Saral Pension 862 if you want a simple plan that always returns the capital. Choose Smart Pension if you want more choice, such as a higher lifetime pension without capital return, an increasing pension or a guaranteed period.
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.