Preparing for retirement is crucial at this moment, rather than merely a luxury. As life expectancy increases and healthcare costs climb, having a solid financial plan for your golden years is essential. The Life Insurance Corporation of India (LIC) stands as one of the most esteemed names in the realm of financial planning within India. For decades, LIC has provided a variety of retirement plans, giving peace of mind and steady income for countless retirees.
In this article, we at Money Moksh present the top 5 LIC plans for retirement planning in 2025. These plans have been selected based on returns, benefits, flexibility, and popularity.
Why Choose LIC for Retirement Planning?
The Life Insurance Corporation holds a significant position in India’s insurance industry, with a remarkable market share that surpasses 65%. With government support and clear policies, LIC offers a level of trust and reliability that is hard to match. In 2025, the focus is on financial security in old age, and LIC is adapting its plans to meet this need.
Top 5 LIC Plans For Retirement Planning In 2025
1. LIC Jeevan Akshay VII (Plan 857) – Immediate Annuity Plan
Best for: Immediate income after retirement. Key Features :
– One-time premium payment
– Lifetime annuity with multiple payout options (monthly, quarterly, half-yearly, annually)
– Return of purchase price option for the nominee upon death
– Available online and offline
Why it stands out in 2025 : With the rise in inflation and healthcare costs, retirees want guaranteed monthly income. Jeevan Akshay VII provides competitive annuity rates along with an easy claim process.
2. LIC New Jeevan Shanti (Plan 858) – Deferred Annuity Plan
Ideal for: People who are looking to retire in the coming years. Key Features :
– Deferred annuity with single premium
– Guaranteed income starts after the selected deferment period
– Joint life option available
– Loan and surrender benefits
2025 Update : With recent changes in annuity rates and the option for joint life cover, this plan has become a favorite among mid-career professionals in India.
3. LIC Saral Pension (Plan 862)
Best for: Simplicity and standard benefits. Key Features :
– Immediate annuity plan under IRDAI guidelines
– Fixed annuity for life
– Joint annuity available
– Refund of purchase price upon death
Market Trend : Introduced to standardize pension products under the IRDAI mandate, LIC Saral Pension is gaining popularity in 2025 due to its clear structure and simplicity, making it ideal for those who prefer straightforward investments.
4. LIC Jeevan Umang (Plan 945) – Whole Life Plan with Survival Benefits
Best for: Long-term wealth creation and insurance cover. Key Features :
– Coverage for life, lasting up to 100 years
– Yearly survival benefits following the premium payment period
– Lump sum maturity amount
– Ideal for passing wealth to the next generation
In 2025 : Jeevan Umang has become popular among millennials looking to retire early. With guaranteed annual returns and life cover, it attracts both investors and those wanting family security.
5. LIC New Endowment Plan (Plan 914) – Savings and Life Cover
Perfect for: Prudent investors aiming to establish a retirement savings plan. Key Features :
– Combination of savings and protection
– Lump sum at maturity or death
– Bonuses increase the maturity amount
– Loan facility available after three years of premium payment
Why It’s Trending : With the government phasing out several tax-free retirement options, more investors are turning to LIC policies like the New Endowment Plan for dual benefits.
2025 Retirement Trends: What the Numbers Say
India is seeing a significant shift in retirement planning habits. A recent Financial Literacy Survey conducted by SEBI and NISM (2025) indicates that :
– More than 48% of Indians begin planning for retirement before they turn 35.
– Nearly 62% of salaried individuals still prefer LIC plans
– The demand for guaranteed income after retirement rose by 18% year-on-year
A Mint report (April 2025) indicated that LIC experienced a 25% increase in new annuity business in FY 2024-25, driven mainly by greater awareness of retirement benefits in Tier 2 and Tier 3 cities. This shift shows a growing awareness of financial independence after retirement, along with a rising demand for pension plans that provide both income and protection.
How to Choose the Right LIC Retirement Plan?
Selecting the right plan depends on:
– Your Age : Early starters may benefit from endowment and deferred annuity plans. Those planning later may favor immediate annuity plans like Jeevan Akshay VII.
– Risk Appetite : Most LIC retirement plans have low risk with guaranteed returns.
– Income Goals : Decide whether you want a lump sum at retirement or regular pension payments.
– Health Condition : Some plans require medical checks; others do not.
– Life Stage : Consider joint life options if you have a dependent spouse.
Tax Benefits of LIC Retirement Plans
Most LIC retirement plans offer tax deductions under Section 80C and Section 10(10D) of the Income Tax Act. For example:
– Premiums paid can be deducted up to ₹1.5 lakh each year
– Maturity and death benefits are usually tax-exempt
– Annuity payments may be taxable depending on the plan and your income bracket
Always speak with a tax advisor before investing to see how your LIC retirement plan fits into your tax-saving strategy.
Real-Life Example : Mr. Anil Sharma, a 45-year-old IT professional from Pune, bought the LIC New Jeevan Shanti Plan in 2023 with a 10-year deferment period. In 2025, as annuity rates increased and the plan offered bonuses, his expected monthly pension improved by 12%. This made it a more appealing choice than mutual funds or NPS at that time.
Why LIC Still Leads Retirement Planning In 2025
In a time of market fluctuations, LIC retirement plans provide security that mutual funds and stock-based pensions often lack. Supported by the Indian government and over 60 years of experience, the Life Insurance Corporation of India is still the standard for retirement planning.
Whether you’re 30 or 55, there’s an LIC plan for every stage of life. From immediate annuities to whole life policies with payouts, these plans continue to dominate the market in 2025 because of their stability, clarity, and evolving features.
Conclusion
Retirement isn’t just about stopping work; it’s about living well and freely. Planning now is essential. With the right LIC plan, you can ensure your golden years are stress-free and financially secure. At Money Moksh, we suggest reviewing your financial goals every year and selecting a retirement plan that meets your changing lifestyle needs.
So, take the first step now. Whether it’s Jeevan Akshay VII for immediate returns or Jeevan Shanti for deferred income, let the Life Insurance Corporation help you create a retirement you can truly enjoy.
Also If you are looking for reliable life insurance as well? Click here to explore trusted life insurance plans and secure your family’s future today.