LIC Pension Plans

Jeevan Shanti

One of LIC’s most popular pension plan, Jeevan Shanti, is a single premium policy. It means that the policyholder makes one payment, and they get annuity (life-time income) as per the option chosen by them.

Annuity Rates are pre-decided and guaranteed from the inception of the policy.

LIC’s Jeevan Shanti plan offers 10 different annuity options to choose from to meet various financial needs. This policy can be availed individually or as a joint plan with a parent, child, spouse, sibling, grandparent, or grandchild.

The plan offers 10 annuity options under immediate annuity to choose from:

• Immediate Annuity for life

• Immediate Annuity with a guaranteed period of 5 years and life thereafter

• Immediate Annuity with a guaranteed period of 10 years and life thereafter

• Immediate Annuity with a guaranteed period of 15 years and life thereafter

• Immediate Annuity with a guaranteed period of 20 years and life thereafter.

• Immediate Annuity for life with return of Purchase Price

• Immediate Annuity for life increasing at a simple rate of 3% p.a.

• Joint Life Immediate Annuity for life with a provision for 50% of the annuity to the Secondary Annuitant on the death of the primary annuitant

• Joint Life Immediate Annuity for life with a requirement for 100% of the annuity payable as long as one of the annuitants survives.

• Joint Life Immediate Annuity for life with a requirement for 100% of the annuity payable as long as one of the annuitants survives and returns to Purchase Price on the death of the last survivor.

The options available under Deferred Annuity are:

A) Deferred annuity for Single life b) Deferred annuity for Joint life

LIC Jeevan Shanti policy allows the policyholder to avail of a loan facility after completing one year of the plan.

The Corporation offers 15 days of free look period. A policyholder is allowed to surrender the policy three months after its inception or after the expiry of the free-look period - whichever comes later. If the policyholder is not satisfied with the terms of the plan, the Corporation allows its return within 15 days.

Eligibility criteria for LIC Jeevan Shanti plan

• Minimum investment: Minimum premium of 1,50,000. There is no =limit on the maximum amount.
• Age criteria: Minimum Age - 30 years; Maximum Age - 79 years - 100 years
• Maturity terms: The Policyholder has the freedom to choose between an Immediate or Deferred Annuity.

In the case of an immediate annuity, returns begin after the payment of the premium. The deferred annuity starts after a certain period, as decided by the policyholder. The minimum period for a deferred annuity is one year, whereas the maximum period is 20 years. This plan allows an option to purchased for the benefit of handicapped dependent (Divyangjan) life.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

PMVVY is for the senior citizens - those above the age of 60. Under this policy, senior citizens will receive a guaranteed pension rate. The scheme will guarantee a pension at 7.40% p.a. during the plan’s first year. The last date to apply for PMVVY is 31st March 2023 as the government has extended the period of sale of this plan for 3 more years.

The investment limit under this plan is 15 lakhs.

Benefits under Pradhan Mantri Vaya Vandana Yojana

• Death benefit: On the death of the policyholder within the policy tenure of 10 years, the purchase price of the policy returns to the beneficiary.

• Maturity benefit: The policy returns the purchase price and the final pension installment in full after maturity.

• Surrender value: The policy allows premature exit under certain critical circumstances such as medical treatment of self or spouse for the treatment of any critical/terminal illness. The surrender value payable is 98% of the purchase price.

• Loan facility: Loan facility is available against the PMVVY after completion of 3 years of the policy term. The loan limit is 75% of the policy price. For all loans sanctioned till April 2021, the rate of interest is 9.5% p.a.

• Freelook period: If the policyholder is not happy and satisfied with the policy term, he/she can return the policy to the corporation within 15 days of the purchase date.

• Tax benefit: The deposit made under this scheme is exempt from tax under section 80C of the Income Tax Act, 1961. However, the interest earned is not exempt from income tax.

Eligibility criteria of Pradhan Mantri Vaya Vandana Yojana

• Entry age: The minimum age limit to enter into this scheme is 60 years. There is no maximum age limit.
• Policy term: The policy term is ten years.
• Mode of pension payment: The ways of pension payments are yearly, half-yearly, quarterly, or monthly.

Sample Pension rates per Rs.1000/-Purchase Price

The pension rates for Rs.1000/-Purchase Price for different modes of pension payments are as below:

• Yearly: Rs.76.60p.a.
• Half-yearly: Rs.75.20p.a.
• Quarterly: Rs.74.50p.a.
• Monthly: Rs.74.00p.a.

The pension installment shall be rounded off to the nearest rupee. These rates are age-independent.

Minimum and Maximum Purchase Price

The minimum and maximum Purchase Price under different modes of pension will be as under:

Minimum Purchase Price

• Yearly Rs. 1,56,658/-
• Half-yearly Rs. 1,59,574/-
• Quarterly Rs. 1,61,074/-
• Monthly Rs. 1,62,162/-
• Maximum Purchase Price
• Yearly Rs. 14,49,086/-
• Half-yearly Rs. 14,76,064/-
• Quarterly Rs. 14,89,933/-
• Monthly Rs. 15,00,000/-
• The Purchase Price to be charged shall be rounded-off to the nearest rupee.

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