LIC's Jeevan Akshay - VII (Plan No. 857) is a single premium, non-linked, non-participating immediate annuity plan launched by the Life Insurance Corporation of India on February 28, 2023. This retirement-focused policy offers 10 different annuity options and provides guaranteed lifelong pension payments to policyholders starting immediately after purchase.
LIC's Jeevan Akshay Key Features
LIC's Jeevan Akshay VII plan offers several key features designed to provide financial security and flexibility for retirees. The table below summarizes the main features of this immediate annuity plan.
| Feature | Description |
|---|---|
| Annuity Options | 10 different options to choose from |
| Premium Payment | Single lump sum payment |
| Annuity Rates | Guaranteed at policy inception |
| Annuity Payments | Throughout the lifetime of the annuitant |
| Purchase Modes | Available both online and offline |
| Free Look Period | 15 days (30 days for online purchase) |
| Loan Facility | Available after 3 months from policy issuance |
| Surrender Option | Available under specific conditions |
| Higher Annuity | Rates For purchase price above Rs. 5 lakhs |
| Joint Life Coverage | Available for specified family members |
The plan is non-linked and non-participating, meaning it is not affected by market fluctuations and does not offer bonuses. Annuity payments are guaranteed for life, providing a stable income stream for retirees. The plan offers flexibility in terms of annuity payment modes, allowing policyholders to choose from yearly, half-yearly, quarterly, or monthly options.
One of the standout features is the availability of 10 different annuity options, catering to various financial needs and preferences of policyholders. These options include immediate annuity for life, annuity with return of purchase price, and joint life annuities, among others.
The plan also includes a loan facility, which becomes available three months after the policy issuance or after the expiry of the free-look period, whichever is later. This feature can provide financial flexibility to policyholders in times of need.
For those investing larger amounts, LIC offers an incentive in the form of higher annuity rates for purchase prices above Rs. 5 lakhs. This can be particularly attractive for individuals with substantial retirement savings.
The surrender option is another important feature, allowing policyholders to encash their policy under specific conditions. However, it's important to note that surrender values are typically lower than the purchase price and should be considered carefully.
Lastly, the plan offers joint life coverage options, allowing policyholders to include specified family members such as spouses, siblings, or lineal ascendants/descendants in the annuity plan. This can be particularly useful for ensuring financial security for dependents.
LIC's Jeevan Akshay Key Benefits
LIC's Jeevan Akshay VII plan offers several key benefits designed to provide financial security and flexibility for retirees:
- Immediate Income Stream: The plan starts providing regular annuity payments immediately after purchase, making it ideal for those seeking instant retirement income.
- Guaranteed Lifetime Income: Annuity payments are guaranteed for the entire lifetime of the annuitant(s), ensuring financial security throughout retirement.
- Fixed Annuity Rates: The annuity rates are guaranteed at the policy inception and remain fixed throughout the policy term, providing stability and predictability.
- Multiple Annuity Options: With 10 different annuity options available, policyholders can choose the one that best suits their financial needs and family situation.
- Joint Life Coverage: Options for joint life annuities allow policyholders to secure income for their spouse or other family members.
- Return of Purchase Price: Several options offer return of purchase price to nominees upon the annuitant's death, ensuring that the investment is not lost.
- Loan Facility: A loan facility is available after three months from the policy issuance, providing financial flexibility in times of need.
- Incentives for Higher Purchase Price: LIC offers higher annuity rates for purchase prices above Rs. 5 lakhs, rewarding larger investments.
- No Medical Examination: The plan does not require any medical examination for purchase, simplifying the application process.
- Inflation Protection: Some options offer increasing annuity payments to help combat the effects of inflation.
- Tax Benefits: The plan may offer tax benefits under the Income Tax Act, 1961, subject to changes in tax laws.
- Surrender Option: A surrender option is available under specific conditions, providing an exit strategy if needed.
- Online and Offline Purchase: The plan can be bought both online through LIC's website and offline through agents or LIC branches, offering convenience to policyholders.
- Free Look Period: A 15-day free look period (30 days for online purchase) allows policyholders to review and return the policy if unsatisfied.
These benefits make LIC's Jeevan Akshay VII an attractive option for individuals looking to secure a stable income stream during retirement while also providing flexibility and protection for their investment.
Annuity Option Choices
LIC's Jeevan Akshay VII plan offers 10 different annuity options to cater to various financial needs and preferences of policyholders. These options provide flexibility in choosing how the annuity payments are structured and what happens to the purchase price after the annuitant's death. The table below summarizes these options.
| Option | Description | Life Coverage | Death Benefit |
|---|---|---|---|
| A | Annuity for life | Single Life | None |
| B | Annuity guaranteed for 5/10/15/20 years and life thereafter | Single Life | Unpaid guaranteed annuities if death occurs within guaranteed period |
| C | Annuity for life with return of purchase price | Single Life | 100% of purchase price |
| D | Annuity for life increasing at simple rate of 3% p.a. | Single Life | None |
| E | Annuity for life with 50% of annuity to spouse on death of annuitant | Joint Life | 50% annuity to spouse |
| F | Annuity for life with 100% of annuity to spouse on death of annuitant | Joint Life | 100% annuity to spouse |
| G | Annuity for life with 100% of annuity to spouse on death of annuitant and return of purchase price on death of last survivor | Joint Life | 100% annuity to spouse; purchase price to nominees |
| H | Annuity for life with annual increase of 3% p.a. (compound) | Single Life | None |
| I | Annuity for life with return of balance purchase price | Single Life | Balance of purchase price |
| J | Joint life annuity with return of purchase price | Joint Life | Purchase price to nominees |
Option A provides a straightforward lifetime annuity without any death benefit. Options B, C, and I offer variations of return of purchase price or continued payments for a guaranteed period. Options D and H provide increasing annuities to help combat inflation.
For those concerned about spousal security, options E, F, and G offer joint life coverage with varying levels of spousal benefits. Option J combines joint life coverage with a return of purchase price benefit.
It's important to note that the annuity rates and exact terms may vary based on factors such as the annuitant's age, purchase price, and chosen payment frequency. Policyholders should carefully consider their financial goals and family situation when selecting an annuity option.
Annuity Options and Amounts
LIC's Jeevan Akshay VII plan offers different annuity amounts based on the chosen annuity option and the policyholder's age. The table below provides an illustration of the annuity amounts for various options, assuming a purchase price of Rs. 10 lakhs and the primary annuitant's age as 45 years.
| Annuity Option Annual | Annuity Amount |
|---|---|
| Option A | Rs. 74,200 |
| Option B | Rs. 74,100 |
| Option C | Rs. 73,800 |
| Option D | Rs. 73,300 |
| Option E | Rs. 72,800 |
| Option F | Rs. 64,800 |
| Option G | Rs. 56,400 |
| Option H | Rs. 70,700 |
| Option I | Rs. 67,500 |
| Option J | Rs. 63,900 |
The annuity amounts vary depending on the chosen option, with Option A (Immediate Annuity for life) offering the highest annual payout of Rs. 74,200. Options that include additional benefits like return of purchase price or joint life coverage typically offer lower annuity amounts. For instance, Option G, which provides 100% annuity to the spouse and return of purchase price, offers the lowest annual payout of Rs. 56,400.
It's important to note that these figures are illustrative and may vary based on factors such as the policyholder's exact age, purchase price, and prevailing annuity rates at the time of policy purchase. The annuity rates are guaranteed at the inception of the policy and remain fixed throughout the policy term .
LIC also offers incentives for higher purchase prices, which can increase the annuity amount. For purchase prices between Rs. 5 lakhs to Rs. 9.99 lakhs, an incentive of Rs. 1.25 per thousand of purchase price is added to the annuity amount for yearly mode of annuity payment. This incentive increases to Rs. 1.85 per thousand for purchase prices between Rs. 10 lakhs to Rs. 24.99 lakhs .
Policyholders should carefully consider their financial needs, life expectancy, and family situation when choosing an annuity option. While options with higher annuity amounts may seem attractive, those that offer additional benefits like return of purchase price or spousal coverage may provide better long-term financial security for some individuals.
Eligibility Criteria
LIC's Jeevan Akshay VII plan has specific eligibility criteria for potential policyholders. The table below outlines the key parameters for purchasing this annuity plan.
| Parameter | Criteria |
|---|---|
| Minimum Entry Age | 25 years (completed) |
| Maximum Entry Age | 85 years (completed) for most options; 100 years (completed) for Option F |
| Minimum Purchase Price | Rs. 1,00,000 for ages 30 and above; Rs. 10,00,000 for ages 25-29 years |
| Maximum Purchase Price | No limit |
| Minimum Annuity | Monthly: Rs. 1,000; Quarterly: Rs. 3,000; Half-yearly: Rs. 6,000; Annually: Rs. 12,000 |
The plan offers flexibility in terms of annuity modes, allowing policyholders to choose from yearly, half-yearly, quarterly, or monthly payment options. The annuity is payable in arrears, meaning the first payment will be made after the chosen interval from the policy commencement date .
For joint life annuities, the plan allows for coverage between any two lineal descendants/ascendants of a family (such as grandparents, parents, children, grandchildren), spouses, or siblings .
It's important to note that there are some exceptions to these criteria. For instance, if the plan is purchased for the benefit of a dependant person with disability (Divyangjan), the minimum purchase price is reduced to Rs. 50,000 without any restrictions on minimum annuity or minimum entry age for the Divyangjan life .
Additionally, for subscribers exiting the National Pension System (NPS) regulated by the Pension Fund Regulatory and Development Authority (PFRDA), the restrictions on minimum annuity and minimum purchase price are subject to PFRDA rules and regulations
Application Process
To apply for the LIC Jeevan Akshay VII plan, policyholders have two main options: online and offline application processes. Here's a detailed guide on how to apply:
Online Application:
- Visit the official LIC website (www.licindia.in).
- Navigate to the "Buy Online Policies" section.
- Select "Jeevan Akshay VII" from the list of available policies.
- Click on "Buy Online" under LIC's Jeevan Akshay VII.
- Fill out the required information, including personal details and COVID-related questions.
- Enter the OTP sent to your registered mobile number.
- Provide the necessary product details and click on "Calculate Premium".
- Review the calculated premium and policy details.
- Make the payment online to complete the purchase.
Offline Application:
- Visit your nearest LIC branch or contact an LIC agent.
- Request the proposal form for LIC Jeevan Akshay VII (Form No. 440).
- Fill out the proposal form with accurate personal and policy details.
- Attach the required documents (listed below).
- Submit the completed form and documents to the LIC branch or agent.
- Pay the premium amount as calculated by LIC.
Required Documents:
- Age Proof: Aadhaar card, passport, driving license, PAN card, or school certificate.
- Income Proof: Bank statement, income tax returns, salary slip, pension passbook, or Form 16.
- Address Proof: Passport, bank passbook, ration card, voter ID, utility bills (electricity, gas, water, telephone), credit card bill, rental agreement, or mobile postpaid bill.
- Photo ID Proof: Aadhaar card, PAN card, driving license, passport, voter ID, ration card, or bank passbook with photograph.
Additional Considerations:
- For joint life policies, ensure you have the necessary details and documents for both annuitants.
- If applying for the plan under special categories (e.g., for a person with disability), additional documentation may be required.
- The free look period allows you to review and return the policy within 15 days (30 days for online purchase) if you're not satisfied with the terms and conditions.
It's advisable to consult with a financial advisor or LIC representative before purchasing the policy to ensure it aligns with your retirement goals and financial situation. They can help you choose the most suitable annuity option and guide you through the application process.
Final Verdict
LIC's Jeevan Akshay VII plan offers a reliable option for retirees seeking guaranteed lifetime income, with its diverse annuity choices and immediate payout structure. However, it's important to consider the trade-offs between financial security and potential returns.
While the plan provides stability and peace of mind, the fixed annuity rates may not keep pace with inflation over time. Additionally, the lack of liquidity once the lump sum is invested can be a drawback for some. Prospective buyers should carefully evaluate their financial goals, risk tolerance, and overall retirement strategy before committing to this plan.
Consulting with a financial advisor can help ensure that Jeevan Akshay VII aligns with one's long-term financial objectives and complements other retirement investments.
