Automatic opening of new policy.

Hi All,
My name is Praveen Gawande and new to this forum.
Well I like to get solution on wierd problem. My dad opened a LIC market plus policy and it got matured. Now My father went to LIC office to claim the money. LIC office said they will send cheque .
MY father waited for more than a month and did not get the cheque, So he went to LIC office to inquire the same. BUT to his surprice he came to know that since my father didnot claim the money ,that money has been invested in new policy PENSION plan.

I would like to know is this possible? There could be many people with same name.Right? how could new pension plan be opened without consent or signature ? PLease help me.

1- Did you inquired which policy LIC Office bought for your father?
2- Ask for a original or copy of the new policy from LIC Office?
3- Is it annuity policy?

For your info -
Market plus is a unit linked deferred pension plan from life insurance corporation available with or without risk cover. On your surviving to the date of vesting, the fund value of the units held in your unit account will compulsorily be utilized to provide a pension based on the then prevailing immediate annuity rates under the relevant annuity option. You may opt to commute up to one-third of the benefit to be paid as a lump sum. In other words you can withdraw upto one third of the total corpus tax-free. And with the balance amount you can choose to buy an annuity from LIC or any other insurer. But note that annuities are taxable.

Thank you Sir for your reply. I would like to know , Can we get full amount ? (no problem on tax side). Is there any surrender fees or something. ?

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Originally Posted by praveensg

Thank you Sir for your reply. I would like to know , Can we get full amount ? (no problem on tax side). Is there any surrender fees or something. ?

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You won't get full amount, at the max you can claim 1/3rd of the maturity amount. The remaining amount is paid to you in pension installment.

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Types of Annuity purchase options in India
a. Deferred annuity
Deferred annuity means annuity payment commence after a certain deferment period which may be a fixed term or after attaining a certain age. You pay a fixed sum over a pre determined period (3 to 25 years) and thus build a corpus. At the end of the payment the corpus continues to grow. Then at a pre-determined age, the annuity payment starts. This option is taken at a young age (around 30 years). The payout starts at a later age. Say at 60. The payout continues as per the payout option chosen by the insured. The premium (or part of it) is tax deductible. The tax advantage makes this very attractive. But the annuity payouts are taxable in your hand. But since the other income may be less, this may not matter too many.
b. Immediate annuity
In immediate annuity the annuity payment commence immediately (from 1st of next month) after sum deposited for the insurance.You pay out a lump sum and purchase the annuity.

Source - What is an Annuity?

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