LIC pension plans: Premiums, benefits to eligibility, complete guide to Life Insurance Corp's Jeevan Akshay VII, New Jeevan Shanti and Saral Pension policies

The Life Insurance Corporation (LIC) offers various insurance plans that provide support to the policyholder to take care of their financial retirements post requirement.  

Here are three annuity plans offered by LIC which can take care of your post retirement financial needs. LIC Jeevan Akshay VII (Plan No 857, UIN: 512N337V04), New Jeevan Shanti (Plan No. 858, UIN: 512N338V04) and Saral Pension (Plan No. 862, UIN: 512N342V03) are three such annuity plans you can consider if you are looking for a pension oriented LIC policy.

Jeevan Akshay VII

Jeevan Akshay VII is an immediate annuity whole-life plan that provides a pension until the demise of the policyholder. It offers ten different annuity choices for the policyholder to have a flexible option to pick any one that suits them best.

Under this plan the annuity rates are guaranteed at the inception of the policy and annuities are payable throughout the lifetime of the policyholder.

Jeevan Akshay VII annuity options

Option A: The Pensioner shall receive a pension for their entire life, whereas the policy will be terminated on the death of the policyholder.

Option B: The pensioner will receive the annuity regularly during his or her lifetime. The annuity will also be paid to the nominee for a period of 5 years if the policyholder dies during the guarantee period.

Option C: The policyholder will receive the pension till for the lifetime, but the nominee will be paid annuity for a period of 10 years if the pensioner dies within the guarantee period.

Option D: Unlike the previous options, the nominee will be paid an annuity for a period of 15 years.

Option E: The nominee will be paid pension for 20 years if the pensioner dies within the guarantee period.

Option F: In this annuity option, if the policyholder dies, the purchase price is returned to the nominee as the death benefit.

Option G: Under this option, the annuity is increased every year at a simple rate of 3 percent per year. However, the policy will be terminated upon the death of the policyholder.

Option H: It is a joint life immediate annuity for life, along with a provision for 50 percent of the annuity to be paid to the secondary beneficiary on the death of the primary beneficiary.

Option I: It is also a joint life immediate annuity for life, along with a provision for 100 percent of the annuity payable as long as one of the holders survives.

Option J: It is also a joint life immediate annuity for life with a provision of 100 percent of the annuity that is payable as long as any of the holders survives and a return of the purchase price on the death of the last who survives.

LIC Jeevan Akshay VII: Entry Age, Premium Payment, and Eligibility

Under this plan the minimum entry age is 25 years (completed), and the maximum entry age is 85 years (completed), except for the annuity option F, which has a maximum entry age of 100 years (completed).

As the plan offers a single premium for the policyholders, it accepts lump sums only. In which case, the minimum purchase is Rs 10,00,000 for people purchasing the plan between the ages of 25 and 29. While the minimum purchase price for people aged 30 and above is Rs 1,00,000.

However, there is no limit on the maximum purchase price in this plan.

LIC Jeevan Akshay VII: Benefits

The major benefits of Jeevan Akshay for senior citizens are:

It offers a death benefit in some annuity options, in which the nominee would be paid in a lump sum amount or would be paid regularly as instalments as selected by the policyholder.

The plan does not offer any maturity benefit as it pays until the demise of the policyholder.

The plan comes with loan options, through which the maximum loan amount can be 80 per cent of the surrender value.

LIC Jeevan Akshay VII vs LIC New Jeevan Shanti vs LIC Saral Pension

The New Jeevan Shanti plan offers the policyholder options to choose between a single-life or joint-life deferred annuity. The annuity rates are guaranteed at the inception of the policy, and annuities are payable after the deferment period throughout the life of the policyholder.

Unlike the Jeevan Akshay VII plan, in the New Jeevan Shanti, the minimum age of entry is 30 years, while the maximum age of entry is 79 years. One can purchase the policy at a minimum price of Rs 1,50,000, while the maximum purchase price has no limit.

There is a vesting time in the New Jeevan Shanti plan, which is 31 years as a minimum; however, the maximum is 80 years. Along with that, the minimum deferment period is 1 year, while the maximum deferment period is 12 years to the maximum vesting age.

LIC Saral Pension is a standard immediate annuity plan that offers the same terms and conditions across all the life insurers. The policyholder has options to choose in annuity. However, the annuity rates are guaranteed at the inception of the policy, and annuities are payable until the lifetime of the holder.

In one option of annuity, it offers to return 100 percent of the purchase price while the other one offers a joint life survivor annuity with a return of 100 percent of the purchase price on the death of the last survivors. Unlike LIC Jeevan Akshay VII, in this plan the minimum entry age is 40 years, while the maximum age is 80 years.