LIC Jeevan Shanti is a new single premium guaranteed pension plan which is launching on 12th September 2018. It offers the guaranteed pension with options like an immediate pension or deferred pension.
You may be aware that LIC’s Jeevan Akshay VI also offers the guaranteed pension plan. However, LIC’s Jeevan Akshay is an immediate annuity plan. Maybe for this reason, LIC came with plan LIC Jeevan Shanti. This plan offers both immediate pension and deferred pension plan.
Before proceeding further, first, let us understand few terminologies used in retirement plans.
In simple term, you can say it as a Pension, where you will get regular income up to the specified period or conditions. There are two types of annuity.
1) Immediate Annuity-In this case, you invest a lump sum in a product and your pension or annuity starts immediately. Let us say you have around Rs.1 Cr and if you buy immediate annuity plans, then the pension will start immediately from next month.
2) Deferred Annuity-In this case your annuity starts after a certain period. Let us say your current age is 30 years and you are planning to retire at the age of 60 years. If you buy a deferred annuity plan, then you will invest up to your retirement age i.e. up to 60 years of age. After 60 years of retirement, your pension will start.
I tried to explain the same with below illustration as below.
Exceptional cases where Rs.1.5 lakh minimum purchase is exempted-
Under an immediate annuity plan, you will have options to choose as below.
Do remember that you are not eligible to alter the options at a later stage of the policy period. Hence, choose the options wisely while buying this plan.
Now let us look into the benefits payable on survival or on death for LIC Jeevan Shanti Plan.
Under deferred annuity plans, guaranteed additions will accrue at the end of each policy month, till the end of the deferment period.
The rate of the guaranteed additions during the deferment period will be as below.
Guaranteed Additions per month=(Purchase Price*Annuity Rate per annum payable monthly)/12
Here the annuity rate per annum payable monthly will depend on the age at entry and the deferment period opted.
In case of the death of annuitant during the deferment period, guaranteed additions for the policy year in which the death occurred will accrue till the completed policy month as on the date of death.
The policy can be surrendered after the completion of 3 months or expiry of the free-look period, whichever is later under the following annuity options.
Under Immediate Annuity Plan-
Option F
Option J
Deferred Annuity Plan-
Option 1
Option 2
Loan facility is available under this plan after the completion of 1 year. You can avail the loan if you have opted the below options.
Under Immediate Annuity Plan-
Option F
Option J
Deferred Annuity Plan-
Option 1
Option 2
I think this plan is launched mainly because to cater to the need of the deferred annuity plan seeker. Because LIC is already offering the immediate annuity plan (LIC’s Jeevan Akshay VI).
Annuity inflating yearly at 3% seems to be bit negative side. Our expenses yearly will not increase with meager 3%. At least the 5% to 6% increase is a must to match the expenses.
Even though there is something called GUARANTEED ADDITION attached with this plan, but I am unable to calculate the GA at this juncture as the tabular premium rates are not yet available with me.
By giving some concession to NPS subscribers, I think this plan is launched to garner the NPS subscribers mainly.
Also, LIC is providing this plan to purchase it online with 2% discount. Hence, it is best to go for online rather than going through agents.
I will update the remaining part of review once I will get the complete picture of this plan.
EPF Scheme 2026 explained fully: EPF withdrawal, EPS pension, and EDLI insurance changes with examples,…
Chasing financial freedom? Do health, time, relationships and contentment matter just as much? Sadly, we…
Your "safe" SIPs, SGBs, PPF, or Index Funds are secretly sabotaging your wealth. Peltzman Effect…
Thinking your retirement plan is foolproof? Why LUCK - not asset or fund selection or…
Nifty 50 Index Funds Vs Active Large Cap Funds — Can we really compare them…
Should you pick Nifty 500 Multicap 50:25:25, Nifty 500, or Nifty LargeMidcap 250 Index Fund?…
View Comments
Dear Everybody here ..
You guys may not understand, so let me try to hammer this inside your thick skull.
Basu here, knows everything and is a perfectly honest guy, but he will not explicitly take sides here in his own website.
The two points here are these ..
1. LIC spends crores and crores of money on advertising everywhere. But none of their ads spell out any of their "returns" in % points, unless they can effectively convince you. They will otherwise never fall back on their promise, they will pay you on time.
2. Their returns.. (remember the word "returns") .. are not really returns. The word "return" is normally applied to financial investment instruments. Like stocks, MFs, FDs, bonds .. etc. What LIC gives you is "insurance". It is already there in their name, just that you blind and unpadh guys cannot read it. And for that you pay a "premium". Ideally this premium is not an investment .. it is just a promise from the insurance company, to cover you from an unpredictable loss (of life, of property, of a job, of a car etc). If the loss is predictable ... remember.. no insurance company in the world will ever cover it .. because then they will quickly go out of business.
SO do not go to LIC for investing to earn a return.
Go to LIC to cover an accidental loss. And forget about LIC returning your premiums.
Dear SRR,
Thanks for sharing your unbiased views.
My father is 62 yrs old and my mom is 58 years old as of now. He is retired and now wants a regular income to deal with. We are stuck between LIC Jeevan Shanti & Tata AIA's Guaranteed return Income Plan to invest around 60 Lacs as a single premium. The LIC returns are taxable whereas is it tax-free with TATA AIA's GRIP under deferred annuity plan? Which should be better product offering out of both or you suggest some other one considering the IRR pre and post IT @ 30% slab. Thanks in advance.
Dear Kamini,
Annuity (whether immediate or deferred) is taxable. Please check properly. Instead, why not he use PMVVY, SCSS or RBI Floating Rate Bonds also?
Sir, is this policy good to take now for investing as bank fds are going down. I want to invest 10lakh
Dear Sreeja,
Don't compare FDs with this. This is pension plan and FDs are meant for a different purposes.
Hello Basu,
I heard like LIC Jeevan Shanti Plan is getting closed on 26th of August, 2019 . Is it True?
I have another doubt on tax like if Invest 20 Lakh in year 2022 whole amount 20 Lakh is Taxable ?
Please advice
Dear Dinkar,
Yes, it is true. They relaunch the same with lower rates. The whole amount is not taxable. But the annuity you receive is only taxable.
Deferred annuity Jeevan Shanti Plan with following details:-
Period of deferred 10 years
Joint policy under plan J
Both person expired in 11th years
Amount deposited 10 lakhs
Annuity rate 6.65%
How much nominee will get ?
Dear Devinder,
As I have already explained in J Option, the nominee will receive the purchase price.
Dear Tonagatti Jee
Please suffice your Personal Mail id mine is
rkmisra90@icloud.com
As need Consultance but not on public platform
Regards
Misra
Dear Misra,
You can reach me at tonhokrani@gmail.com
Sir,
Online purchase of 1000000 for deffered annuity how much we need pay including 2?discount.
Sir My daughter is a deaf and dum by birth and her age is 19 years. I would like to invest Rs 600000/- I need pension after 30 years of her age please inform how much I get pension per month
Dear Krishna,
Please calculate on your own by using the LIC website. Regarding the need, if you want the pension after 30 years, then why not invest somewhere else and then buy immediate annuity plans?
Dear Jairaj,
There is an online calculator and it depends on your age and other inputs. Hence, do the calculation online.
Sir,
1) Is annuity earned on PMVVY is subject to TDS?
2) Is the final payment after the term of 10 years (Purchase price+Annuity for last year) is taxable?
If yes, is the whole amount taxable?
If not then under which sec. of I.T. act it is exempt?
Dear Bikas,
1) NO. But do you feel avoiding TDS means avoiding tax?
2) They will not pay but convert into an annuity which is taxable.
Sir,
I am now 60. I want to purchase a joint life deferred (5years) Jeevan Shanti (Plan 850) annuity plan with my wife. My question is 1) if any one of the two dies in the period of deferment can the surviving one continue the plan or surrender it?
2) Can the policy be surrendered at any time after 3 months of purchase. If it is true then whether both the survivors have to sign the surrender form?
3) What is this "SURRENDER VALUE"? Is there any deduction from the original purchase price? OR there are some additions to it?
Dear Bikas,
1) First check JOINT life is possible or not. Because as per me, it is purchased by a single person JOINTLY you can't buy.
2) and 3) Regarding eligibility of surrender, please refer the above post.
Sir, Is the Jeevan santi lic plan has any benifit of IT rebate under 80cc
Dear Debasis,
YES. But pension is taxable income for you.