Life Insurance Corporation of India (LIC) has launched a new unit linked pension product the New Pension Plus plan that allows young people to set aside money for their retirement.

This unit-linked, non-participating individual pension plan helps build corpus through systematic and disciplined saving, which can then be converted into regular income by purchasing an annuity plan upon term completion.

New Pension Plus policy can be purchased offline through brokers or other intermediaries and directly online through www.licindia.in website.

"This plan can be purchased either as Single Premium or Regular Premium payment frequency. Under a Regular Premium policy, the Premium shall be payable over the term of the policy," stated the LIC press release.

The policyholder has the option to invest premiums in one of the four available types of funds.

According to the LIC press release, "Each premium paid by the policyholder shall be subject to Premium Allocation Charge. The balance amount known as allocation rate constitutes that part of premium which is utilized to purchase the units of the fund chosen by the Policyholder in the policy. Four free switches for change of funds in a policy year are available".

Under an active policy, guaranteed additions will be paid as a portion of the annual premium. "The guaranteed addition on regular premiums ranges from 5% to 15.5%, and on Single Premiums, up to 5% is payable at the end of a specific policy year. To purchase units in accordance with the selected fund type, the amount of Guaranteed Additions will be used," LIC said in a press release.

The NAV will be calculated daily and will be based on investment performance as well as the Fund Management Charge of each fund type.

"The Life Assured shall utilize the proceeds of the Policy on Vesting (i.e. at the end of the Policy Term)/on Surrender/ on Discontinuance as per the Annuitisation provision. Partial withdrawal of units allowed after 5 years," stated LIC.