LIC Pension Plans
LIC Jeevan Nidhi Policy
LIC New Jeevan Nidhi Plan is a deferred annuity plan with bonus. This is a non unit-linked insurance pension plan. This plan is purchased to cover the risk of living too long and hence has multiple pension options to cover that risk. The corpus that is created to provide pension for old age is the Sum Assured + Accrued Guaranteed Additions + Simple Reversionary Bonus + Terminal Bonus. The age where pension is payable is called Vesting Age and the date when pension starts is called Vesting Date.
Key Features of Jeevan Nidhi plan :
- Deferred annuity plan with bonus facility
- Guaranteed Additions available for the first 5 years
- Offers Bonus from the 6th year onwards
- Optional cover of Accidental Death and Disability Benefit rider available
- Large sum assured rebate
Death benefits :
In case of death of the Life Insured before the vesting date, but
Within the first 5 years of the policy: provided all premiums have been paid, the nominee will be provided the Basic Sum Assured + accrued Guaranteed Additions which can be paid in a lumpsum or as annuity or a combination of the two.
After the first 5 years of the policy: provided all premiums have been paid, the nominee will be provided the Basic Sum Assured + accrued Guaranteed Additions + Simple Reversionary + Final Additional Bonus, if any, which can be paid in a lumpsum or as annuity or a combination of the two.
Vesting Benefit :
At the time of vesting, there are 3 choices
Withdraw 1/3rd of the entire corpus tax free and then purchase an Immediate Annuity Plan from the remaining amount at the prevailing annuity rates
Buy an Immediate Annuity Plan from the entire amount at the prevailing annuity rates
Buy a Single Premium Deferred Annuity Plan
Immediate Annuity Plan can be purchased only from LIC of India and the vesting option can be chosen from the available options at that time and it cannot be ascertained now.
Income Tax Benefits :
Premiums paid under life insurance policy are exempted from tax under Section 80 C and 1/3rd of the maturity proceeds are exempted from tax under Section 10(10A). Pension amount will be taxable.
LIC Jeevan Nidhi Pension Plan Table
|Eligibility Conditions & Restrictions|
|Minimum age||20 years (Completed)|
|Maximum age||58 years for Regular Premium payment
60 years for Single Premium payment
|Minimum Sum Assured||Rs.1,00,000 for Regular Premium payment
Rs.1,50,000 for Single Premium payment
|Maximum Sum Assured||No limit|
|Deferment term||7 years to 35 years for Regular Premium payment.
5 years to 35 years for Single Premium payment.
|Vesting Age||55 years to 65 years|
|Premium Mode||Yearly / Half yearly / Quarterly / Monthly (Thru Bank) / Single Premium|
|Loan||No Loan facility|
|Surrender||Eligible after 3 years (Should Surrender before maturity)|
|On Death||Sum Assured + Bonus is paid|
|On Maturity||Pension is payable
Option to commute 1/3rd of Maturity amount
|Income Tax Benefits||(i) Premiums paid are eligible for Tax rebate u/s 80c
(ii) Commutation is Tax free u/s 10(10a)
(iii) Pension is Taxable