LIC Jeevan Akshay

LIC Jeevan Akshay

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LIC Jeevan Akshay Plan

Life Insurance Corporation of India (LIC) is owned by the Indian Government. LIC maintains top rank in the list of Indian Insurance Companies. The bill was passed in 1956 by the Parliament of India to form a Life Insurance Corporation under which more than 245 private companies were merged. It provides multitude of plans under different categories suitable for each individual. They have kept in mind every individual’s needs.

One of the plans is LIC Jeevan Akshay Plan. This policy plan is nothing but a pure pension plan for senior citizens. This product comes under Annuity type. Under annuity, people get a pension for a regular interval of time. The payment mode is to be decided by you. It’s a smart retirement investment plan.

How LIC Jeevan Akshay Plan Works

The policy premium term is single premium. At the beginning of the plan, you have to pay the premium of your choice. After deciding this you will be eligible for a regular pension. There is no life risk covered under this plan, as it’s a pure annuity plan and whatever you invest, you will get it as a pension. The ordinance for this has been passed by PM Narendra Modi and the cabinet in the month of January 2017. Due to this senior citizens will be benefitted. It is an immediate pension plan. So, if you pay the one shot premium of your choice, the annual payment will start from that moment. You don’t have to submit any medical certificate for this plan as it does not cover medic-claims or life risk.

This plan gives us 7 different Annuity Options as below:

Each option will be explained with a standard example.

Single premium: 5, 00, 000 INR

Pension mode: Annual

Annuitants Age: 60 years.

1. Annuity for Life:

Under this plan, Annuitant will receive pension till lifetime. After that, this plan will not be eligible. According to above example, the annuitant is liable to get 48, 750 INR annually as a pension.

2. Annuity Guaranteed for Certain Period:

Under this option, we have 4 sub choices. We can select the plan for 5,10,15 or 20 years. After selecting the plan the annuitant will get paid the annuity irrespective of if he is alive or not. The 4 options are as follows:

For 5 years: The annuitant or the nominee will get 48, 300 INR as pension for 5 years. If the annuitant survives, he will get the same amount for rest of his life.

b. For 10 years: The annuitant or the nominee will get 47, 300 INR as pension for 10 years. If the annuitant survives, he will get the same amount for rest of his life.

c. For 15 years The annuitant or the nominee will get 45, 950 INR as pension for 15 years. If the annuitant survives, he will get the same amount for rest of his life.

c. For 20 years The annuitant or the nominee will get 44, 400 INR as pension for 5 years. If the annuitant survives, he will get the same amount for rest of his life.

3. Annuity with return of purchase price on death:

Under this option, the annuitant gets the benefit till he/she is alive. On the death of the annuitant, the nominee gets the full refund of Single premium paid. So according to the above example, the annuitant will get 37, 550 INR as annual pension till he/she is alive. After the death of the annuitant, the nominee receives 5, 00, 000 INR.

This option is similar to fixed deposit as it is giving you the invested money back along with the pension benefit.

4. Increasing Annuity:

Under this option, the annuitant gets the benefit till he/ she is alive. The pension amount will increase every year by 3%. So according to the above example, the annuitant will get 39, 650 INR as annual pension till he/she is alive. Every year the pension will be increased by 1, 190 INR, which is 3% of 39, 650 INR.

5. Joint Life Last Survivor Annuity with 50% for spouse:

Under this option, the annuitant gets the benefit till he/ she is alive. On the death of the annuitant, the nominee gets the pension which is 50% of the annuity. So according to the above example, the annuitant will get 45, 200 INR as annual pension till he/she is alive. After the death of the annuitant, the nominee receives 22, 600INR every year.

6. Joint Life Last Survivor Annuity with 100% for spouse:

Under this option, the annuitant gets the benefit till he/ she is alive. On the death of the annuitant, the nominee gets the pension which is 100% of the annuity. So according to the above example, the annuitant will get 42, 150 INR as annual pension till he/she is alive. After the death of the annuitant, the nominee receives 42, 150 INR every year.

7. Joint Life Last Survivor with Return of Purchase Price:

Under this option, the annuitant gets the benefit till he/she is alive. On the death of the annuitant, the nominee gets the full pension every year. The actual amount is returned on the death of Annuitant and spouse. So according to the above example, the annuitant will get 37, 050 INR as annual pension till he/she is alive. After the death of the annuitant, the nominee receives 37, 050 INR. On the death of a spouse the actual amount of 5, 00,000 INR is returned.

The Perks You Get Out Of This Plan

Death Benefit:

Unlike other LIC plans, you don’t get any death benefit under this plan. Because once you pay the premium your money back starts in the form of pension. If you choose to get payments even after your death, your spouse will be benefited out of it. Your spouse gets the remaining pensions after you.

Maturity Benefit:

Unlike other LIC plans, you don’t get any maturity benefit under this plan. Because once you pay the premium your money back starts in the form of pension. If you choose to get payments even after your death, your spouse will be benefited out of it. Your spouse gets the remaining pensions after you.

The rate of Pension:

The rate depends on the type of annuity chosen by the policyholder or the annuitant. There are 7 active types of plans under annuity product. But once decided and the one time premium paid, you cannot change the plan as it is a one-time payment and the benefits starts immediately.

Profit of Participation:

The policy should be eligible and it should incur profit for the Corporation. Then the policy is entitled to Simple Reversionary Bonus. For this, the policy should be active and in force. The Reversionary bonus will be calculated based on the premium paid.

Rider Benefit

There is no riders benefit available under this plan, as it is a pure pension based annuity plan.

What is the Eligibility Criteria for LIC Jeevan Akshay Policy?

You can start the policy premium from the age of 30 till 85 years till as long as you want. It is a single premium term plan. There is no age of policy maturity. You will get the benefit as money back. The policy can be continued even after your death on your wish. Your spouse will be benefited out of it. The minimum premium is 1, 00, 000 INR and the maximum as per your wish.

Pension Benefit or Annuity Benefit

The pension starts immediately once you pay the premium. The payment mode for pension depends on you. What you select. You can select Yearly pension, half-yearly pension, quarterly pension or a monthly pension. The minimum amount of pension or annuity will be 6000 INR approximately and the maximum will go till 60,000 INR approx. The amount will vary depending on the taxes applicable.

Tax Benefit

Similar to other policy schemes, the LIC Jeevan Akshay Policy provides benefits in income tax. The premiums are tax exempted Under the Section 80 C of Income Tax Act. Only the pension you receive is taxable. So you need not pay any tax on your premium.

Loan Facility

Loan policy is not available for this product.

Policy surrender

You cannot surrender the policy under this plan. It is not allowed.

LIC Jeevan Akshay Plan with Example

Mr. Ashish purchases Jeevan Akshay Policy with the following details:

-Sum Assured – 5, 00,000 INR

-Policy purchase year – 2017

-Age: 60 years

-Pension Mode: yearly

-By using a premium calculator, you can calculate the benefit details.

The purchase details will be as follows:

-Purchase Price: 5, 00,000 INR.

-Service Tax: 15, 450 INR.

-Total premium to pay: 5, 15, 450 INR.

The purchase details will be as follows:

-Pension Type: Yearly

-The rate of interest: 9.38 percent

-Pension Amount: 46, 903 INR

So for the policy of 5, 00,000 INR the rate of interest per annum will be 9.38 percent. And based on this, the Policyholder or the Annuitant will receive 46, 903 INR per annum as a pension

This plan is among the best plan for investment as it gives you the benefits of pension even after your death. Also, it gives you the option to get your money back to your dear ones even after your death.

*Information provided on this webpage/website is only for the purpose of general information & understanding of the topic. PolicyX or any of its subsidiaries does not endorse any of the information provided herewith and are committed in providing correct and unbiased information to its customers helping them make an informed decision.