LIC Jeevan Akshay VII Pension Plan No 857 – Features, Benefits and Negative Factors
LIC Jeevan Akshay VII Pension Plan No 857 Review
Currently LIC has Jeevan Shanti pension plan which is being phased out shortly. In place of this pension scheme, LIC is planning to launch Jeevan Akshay VII Pension plan no. 857 which is the immediate annuity plan. This is an enhancement to LIC Jeevan Shanti Pension plan with few changes. LIC is a trusted brand and many would opt insurance and pension products as these are lifetime commitments. What is immediate annuity and how does it work? What are the features of this LIC Jeevan Akshay Plan VII No 857? Should you consider Jeevan Akshay Pension scheme at all? In this article we would do LIC Jeevan Akshay Pension Plan review.
Also Read: Best LIC Policy for 1 Crore
What is Annuity Pension Plan and how does it work?
You can skip this section if you are already aware how immediate annuity works.
Since LIC Jeevan Akshay VII pension plan provides immediate annuity, one would get doubt as to how does this work exactly. Let me show you a video to get complete idea on how annuity pension plan works. Credit: Myinsuranceclub.com
In simple terms:
1) One needs to purchase this pension plan in a lump sum.
2) LIC would pay the pension amount based on the option chosen.
3) The pension starts immediately after the purchase of such pension plan.
4) Pension amount would depend on the terms of the pension plan.
Features of LIC Jeevan Akshay VII Pension Plan No 857
This plan is launched on 25 August, 2020.
It is single premium, non linked, non participating and immediate annuity pension plan where one can get immediate pension income after purchase.
The annuity rates are fixed at the time of taking the pension plan.
The minimum purchase price is Rs 1 Lakh.
There is no Maximum purchase price limit.
Minimum age of entry is 30 years.
Maximum age of entry is 85 years. For variant F it is 100 years.
The annuity is payable either monthly, quarterly, half yearly or yearly.
One can consider joint life cover in this pension plan.
It provides 10 immediate annuity options. One can choose based on their requirement.
One of the good feature in this pension plan is that the death benefit payable to the nominee of the pension holder can opt in installments ranging period from 5 years, 10 years or 15 years.
One can surrender the pension plan after 3 months if they have opted for Option F and J.
NPS subscribers can opt this plan where one can get an immediate annuity plan.
For Government employees default options are Option J and F.
What are various immediate annuity options available in LIC Jeevan Akshay 7?
LIC Jeevan Akshay offers 10 annuity options. One can consider the option suitable to them.
What is LIC Jeevan Akshay annuity calculator?
The annuity pension calculator would help you to know how much pension you can get based on the investment and respective option chosen by you. LIC is yet to publish a chart / link for Jeevan Akshay calculator. We would update this section once we get complete info.
What is LIC Jeevan Akshay rate of interest?
Some one was asking what is the interest rate on this pension plan. LIC does not pay interest on their policies. One can expect returns between 5% to 6% from endowment / money back / pension policies.
What is minimum annuity under this scheme?
Here are the details of minimum annuity under this scheme.
1) Annuity Monthly – Rs 1,000 per month
2) Annuity Quarterly – Rs 3,000 per quarter
3) Annuity Half yearly – Rs 6,000 every 6 months
4) Annuity Yearly – Rs 12,000 per annum.
How to buy this pension plan?
You can purchase this LIC pension plan either online or offline. Once this product is launched, the link would be available on LIC online portal. For offline purchase, you need to approach LIC agent or LIC branch.
Taxation of Annuity Pension Plan
Here are the taxation rules
1) Amount invested in purchasing this annuity plan is exempted from income tax u/s 80c upto Rs 1.5 Lakhs.
2) Any pension income received is taxable as per the income tax slab applicable to pension holder.
Are there any rebates in this pension plan?
Here are the high sum rebates / discounts applicable on this plan.
1) If the individual buy this pension scheme online, they would get a 2% rebate.
2) If the individual buy this pension plan offline, they can get rebate (discount) between 1% to 2.25%. The reason is there is LIC agent in between where the commission would go to them.
Where can we get Jeevan Akshay premium calculator?
This is not a life insurance where one can calculate premiums. This is a pension plan. Hence, one need to purchase an annuity and get the pension income based on the option chosen. One can choose an annuity calculator here.
LIC Jeevan Akshay Pension plan VII benefits
Here are the benefits of this pension plan from LIC.
1) Pension benefit: As per the pension plan chosen among 10 options, one would get pension amount.
2) Maturity benefit: There is no maturity benefit available in this pension plan.
3) Surrender Benefit: Pension holders are eligible to surrender this pension plan after 3 months under Options F and J. Others cannot surrender pension plan.
Are there any negative factors in this pension plan?
Here are some negative factors in this plan.
1) Pension plans in general come with low returns. LIC Pension plans come with low returns of 5% to 6%.
2) If you are opting for high value annuity purchase and going with LIC Branch / LIC agent, you would get low rebate. Instead one can go for online option where you can get 2% rebate / discount.
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Should you invest in LIC Jeevan Akshay VII Pension Plan 857?
Any new product by LIC would attract investors for various reasons. For retirement planning, Annuity plans are considered as safe investment option as there is no change in interest or returns in between once you purchase. Below are our comments:
1) If you trust only LIC brand to purchase an annuity, you can go ahead with such annuity plans. LIC Pension plans come with low returns and offer 5% to 6% returns. Post tax + inflation, the returns would be very low. If you are okay with such low returns, you can consider such pension plans.
2) If you have received your retirement benefits through various ways (EPF, PPF, accumulated corpus through various sources, etc.,) or NPS subscriber, you can consider this pension plan and park some of your funds in LIC Jeevan Akshay VII pension plan. Balance can be invested in other retirement options like Senior Citizens Saving Scheme, Pradhan Mantri Vaya Vandhana Yojana Scheme, debt mutual funds, balanced mutual fund schemes, etc.,
5) If you are young or in middle age (still not reached retirement stage yet), you can avoid such immediate annuity pension plans and invest in high return mutual funds suitable for high risk investors and balanced mutual funds for moderate risk investors.
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SBI Life also offers annuities. Between LIC and SBI Life, which is safer and more profitable?
The returns would depend on the age and option chosen. Hence it is not apple to applee comparison. Most of the pension plans offer 4.5% to 6% returns
If applied and paid online, how to get policy bond
You would get it through courier to the address indicated.
HOW TO APPLY ONLINE
Arjun, pls visit licindia website. The link should be available soon.
Can you provide some Long Term Bonds, Dividend Paying Stocks and REIT Funds names too
Nanmith, We would cover these in next few weeks.
I think this is 5 to 6% or 6 to 7% (depending upon your age – for a person of +60 years of age, the so called return is 6 to 7%) without getting your principal money back. It means that the total return would be 6 to 7% and just forget the principal money which you paid while buying the policy.
It is horrendously meagre return. Even RBI bond gives you higher return – though for a tenure of 10 years only.
Yes, agree with your views Kamalji