LIC New Jeevan Shanti Plan: Features, Minimum age, tax benefits, deferment period and more

Life Insurance Corporation of India (LIC) is known for offering a wide range of insurance policies, tailored to meet insurance needs and savings requirements for a wide range of investors.  LIC has many insurance plans designed to cater to specific needs. One such plan is LIC's 'New Jeevan Shanti' policy (Plan no. 858).

Introduced after withdrawing its former version, the New Jeevan Shanti plan is basically a single premium investment option where the policyholder can choose between a Single life and Joint life deferred annuity. It’s a pension plan designed to meet the needs of people after retirement.

These two options offered to policyholders come with a different set of benefits.  

LIC New Jeevan Shanti plan: Eligibility, minimum investment and deferment period

- Minimum purchase price - Rs 1,50,000

- Maximum purchase price - No Limit

- Minimum entry age - 30 years

- Maximum entry age - 79 years

- Minimum deferment period: 1 year

- Maximum deferment period: 12 years (subject to Maximum Vesting Age)

Mode of annuity payment

The available modes of annuity are yearly, half-yearly, quarterly, and monthly. This means that the annuity will be payable in arrears which shall be paid after one year, six months, three months and one month from the minimum vesting age. (the age when policyholders start to receive pension).

LIC New Jeevan Shanti plan: Features

1. Investors get flexible options when choosing an annuity.

2. Incentives are available by way of an increase in the annuity rate with a higher purchase price.

3. One can purchase the LIC plan easily, both on its official website and through an insurance agent.

4. Policyholders can avail loans on their LIC New Jeevan Shanti plan after the completion of one policy year.

5. The LIC Jeevan Shanti plan also comes with a free look period of 15 days. A policyholder can cancel their purchase if not satisfied with the plan.

LIC New Jeevan Shanti plan: Benefits

1. Death Benefits:

a. During the deferment period, nothing is paid on the survival of the annuitant. In case of the annuitant's demise, the death benefit is paid to the nominee. After the deferment period, the life insured receives the pension as per the annuity options chosen during his lifetime. On death of the policyholder, death benefit will be paid to the nominee.  

b. In case of a joint annuity plan, during the deferment period no death benefit is paid to the primary or secondary annuitant. After the deferment period both the policy holders will receive annuity as per the chosen mode. On death of the last surviving annuitant, death benefits will be paid to the nominee.

c. Nominees can also opt to receive the death benefit in installments over 5, 10, or 15 years.

d. On death of the policy holder, the higher of purchase price plus accrued bonus minus total annuity amount payable till date of death or 105 per cent of purchase price is paid.

LIC New Jeevan Shanti plan: Tax benefits

The New Jeevan Shanti plan comes with the following tax benefits:

1. The premiums paid toward the policy are tax exempted under Section 80CCC of the Income Tax Act, 1961.

2. Under certain options, the death benefits remain tax-free for the nominee.

3. At the end of the deferment, the annuitant can withdraw 1/3rd of the corpus, which is tax-free under section 10(10A).