LIC New Jeevan Nidhi

LIC New Jeevan Nidhi

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LIC New Jeevan Nidhi Plan

LIC New Jeevan Nidhi Plan is one of the most efficient deferred annuity plans with a bonus. The plan falls under non-unit-linked insurance pension plan category. The plan offers an option to an individual to have a regular income source post retirement. The plan offers multiple pension options that cover different types of risk time to time. A life cover is also included in this plan.

The plan basically works on a corpus basis. The corpus thus made is a combination of Sum Assured + Accrued Guaranteed Additions + Simple Reversionary Bonus + Terminal Bonus. The date when the pension system starts is known as ‘Vesting date’ and the age at which pension starts is known as ‘Vesting age’.

Key Features of LIC New Jeevan Nidhi Plan

It is a deferred annuity plan that also offers bonuses.

For the first 5 years, the plan offers guaranteed additions.

The Simple Reversionary Bonus and Final Addition Bonus starts from 6th year onwards till the end.

Large sum assured rebate available.

One can choose the optional cover for accidental death and also Disability Benefit rider.

Benefits offered under LIC New Jeevan Nidhi Plan

In terms of benefits, it is one of the best plans to consider for your post retirement needs. The plan offers a death benefit, Vesting benefit and Tax benefit to an individual. Here are all the details about the many benefits LIC New Jeevan Nidhi Plan offer:

Death Benefit:

The plan has some prescribed conditions to offer the death benefit plan. In the case of the death of any person covered under Life Insurance plan, the benefit is given depending upon the age of the policy. There are two different slabs:

Within the first year of the policy:

If an insured person dies within the first five years of the policy and provided all the premiums are paid, the nominee will be provided with the Basic Sum Assured + accrued Guaranteed Additions. This can be paid as a lump-sum amount or as an annuity or the combination of the two options.

After the first 5 years of the policy:

If the death happens after the first five years of the policy the nominee is provided with Basic Sum Assured + accrued Guaranteed Additions + Simple Reversionary + Final Additional Bonus. This can be paid as a lump-sum amount or as an annuity or the combination of the two options. The only pre-requisite is that all the premiums must be paid.

In case the insured person dies after the Vesting Date, the payment depends purely on the pension option chosen by the individual and is paid to the nominee.

Vesting Benefits:

Vesting benefits are offered as a choice of three options. The person can choose to:

  • One can withdraw the 1/3 amount of the entire corpus tax-free and with the remaining amount, can purchase some Immediate annuity plan at the prevailing annuity rates

  • Buy an Immediate annuity plan with the entire amount in the corpus

  • Buy a single premium deferred annuity plan with the entire corpus

The vesting options might depend on the prevailing conditions at the set time and thus cannot be ascertained now. However, they are limited to the purchase of immediate annuity plan from LIC only.

Income Tax Benefit

All the premiums paid under the LIC New Jeevan Nidhi Plan are subject to tax exemption under the Section 80 (C) of the Income-tax Act. Also, the 1/3 amount of the maturity proceeds is tax-free under the Section 10(10A) of Income tax act. However, the entire pension amount would be subject to income tax deduction as per the slabs defined under the Act.

Some other benefits:

  • Guaranteed additions @5% of sum assured is added to the corpus with the completion of each year till first five years.

  • The death benefit under the plan should be a minimum of 105% of the entire premium amount paid until death.

  • The plan offers a benefit to choosing the rider; Accidental Death and Disability Benefit rider. This offers more comprehensive coverage.

  • Rebate in premium for high sum insured ranges from 3 lakh and above.

LIC New Jeevan Nidhi Plan Specifications

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.

Maximum Minimum Particulars
Regular Pay:58 years
Single Pay: 60 years
20 yrs Entry Age
65 yrs 55 yrs Vesting Age
Single pay or equivalent to the policy term Premium Payment Term (PPT)
35 7 for Regular Premium
5 for Single Premium
Policy Term
Monthly/ quarterly/half-yearly / annually Premium Paying Frequency
As per the age, PPT & SA Yearly premium
No set limit Regular Pay:1 lakh
Single Pay: 1.5 lakh
Basic Sum Assured
Monthly/ quarterly/half-yearly / annually Premium Paying Frequency

Details of the Premium

Here is a sample illustration of the premium depending upon following criteria:

Currency: INR

Insured Person: Male

Sum Assured: Rs. 2 Lakh

Regular Pay Single Pay Age/ term
30 20 10 30 20 10
6550 - - 87610 - - 25
6960 10,720 - 91,230 122,400 - 35
- 11,430 23,050 - 126,560 170, 510 45

Additional policy details

The policy has some more terms related to it that an individual must understand clearly before buying the plan. Here are the key terms used:

Grace Period:

The policy offers a grace period to the insured person to deposit the premium for comfort. It is 15 days if the policy is purchased on monthly terms and 30 days for quarterly, half-yearly and annual terms. In case you fail to pay the premium within the grace period the policy lapses. However, such lapsed policy can be revived within 2 years from the date of first unpaid premium.

Policy Surrender & Termination:

The insured person is offered surrender policy. This, however, depends upon the payment plan availed. Here are the surrender terms:

  • Single Pay plan:If an insured person dies within the first five years of the policy and provided all the premiums are paid, the nominee will be provided with the Basic Sum Assured + accrued Guaranteed Additions. This can be paid as a lump-sum amount or as an annuity or the combination of the two options.

  • Regular Pay Plan:One can surrender the policy after paying the full premiums for 2- 3 years. The surrender value would be equal to Guaranteed Surrender Value or Special Surrender Value, whichever is higher. The guaranteed surrender value is represented as a percentage of premiums paid a percentage of vested bonuses and accrued guaranteed additions that depend upon the year of surrender.

  • Free Look Period:The policy also offers a free look period. If in case the coverage, terms, and conditions of the policy do not please you, you can cancel it within 15 days of the receipt of the policy document. The only condition is that you shouldn’t have made any claim.

  • Loan Facility:The plan does not offer any loan facility to the insured person.

Exclusions under the plan

In the case of suicide of the insured person:

  • Single Pay plan:If the person commits suicide within 12 months of the policy inception, only 90% of the premium paid is refunded.

  • Regular Pay Plan:If the person commits suicide within 12 months of the policy inception, only 80% of the premium paid is refunded. In case the suicide is committed within 12 months of revival, 80% of premium paid or the acquired Surrender Value, whichever is higher is paid.

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