LIC Jeevan Shanti Guaranteed Pension Plan – Should you opt?
LIC Jeevan Shanti Guaranteed Pension Plan Review
After long time LIC has launched a new pension plan, LIC Jeevan Shanti Guaranteed Pension Plan No.850. LIC Jeevan Shanti is a single premium annuity plan that came with various options. What is the eligibility to join LIC Jeevan Shanti Pension Plan? What are various annuity options available in this plan? Would you get guaranteed Pension plan as indicated by LIC? Should you opt for LIC Jeevan Shanti Guaranteed Pension Plan No. 850? Let’s review some of these common FAQs which most of us have.
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Overview of LIC Jeevan Shanti Guaranteed Pension Plan
LIC Jeevan Shanti is a single premium annuity plan. Its a one-time investment plan that comes in two options – immediate annuity or deferred annuity. There are multiple options available in immediate annuity plan and deferred annuity plan comes with two options.
What is Annuity?
If you are already aware of this, skip this section. First let us understand what an Annuity means. An annuity can be termed as pension in which you get regular income up to the specified period or condition. There are two types of annuity:
Immediate annuity – in this case, you invest a lump sum and your annuity starts immediately.
Deferred annuity – in this case, the annuity starts after a certain period.
Features of LIC Jeevan Shanti Guaranteed Pension Plan
Recently launched on 12th September, 2018, LIC Jeevan Shanti is a non- linked, non-participating single premium annuity plan.
The policy can be taken on own life or jointly with a grandparent, parent, spouse, sibling, grandchildren or children.
The annuity rates are guaranteed at the time of inception of policy for both immediate and deferred annuity and annuities are payable throughout the lifetime of annuitants.
The plan can be purchased online as well as off line.
Loan facility shall be available after the completion of 1 year of the policy. Policy loan is available under the option F and J of the immediate annuity plan and both the options of the deferred annuity plan.
Eligibility to join LIC Jeevan Shanti Guaranteed Pension Plan
There are certain eligibility criteria for LIC Jeevan Shanti Guaranteed Pension Plan.
1) The minimum age to enter the policy is 30 years.
2) The maximum age in immediate annuity is 85 years, except option F and 100 years in option F. In a deferred annuity, it is 79 years.
3) The minimum deferment period is 1 year, while the maximum is 20 4) years.
4) The minimum annuity is Rs 1,000 per month, Rs 3,000 quarterly, Rs. 6000 half-yearly Rs. 12,000 annually. There is no upper limit of the maximum annuity.
5) The minimum purchase price of the policy is Rs 150,000. There are certain exceptional cases where this limit is exempted. If the plan is purchased for handicapped dependent, then the minimum purchase price is Rs 50,000 and if the plan is purchased by NPS subscribers. There is no maximum upper limit to it.
LIC Jeevan Shanti Guaranteed Pension Plan – Annuity Options
In this plan, both the options of annuity are available – immediate annuity plan and deferred annuity plan. Please note that you are not allowed to change the option in at a later stage of the policy period, so choose the option very wisely at the buying the policy.
1) Immediate annuity for life
A) Immediate annuity with guaranteed period of 5 years and life thereafter.
B) Immediate annuity with guaranteed period of 10 years and life thereafter.
C) Immediate annuity with guaranteed period of 15 years and life thereafter.
D) Immediate annuity with guaranteed period of 20 years and life thereafter.
E) Immediate annuity for life with return of purchase price
F) Immediate annuity for life with increasing at a rate of 3% per year.
G) Joint life immediate annuity for life with a provision of 50% of the annuity to the secondary annuitant on death of the primary annuitant.
H) Joint life immediate annuity for life with a provision of 100% of the annuity payable as long as one of the annuitant survives.
I) Joint life immediate annuity for life with a provision of 100% of the annuity payable as long as one of the annuitant survives and return of the purchase price on death of last survivor.
2) In deferred annuity plan, there are two options-
A) Deferred annuity for single life.
B) Deferred annuity for joint life.
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Benefits available in LIC Jeevan Shanti Guaranteed Pension Plan
The benefits available under this plan vary a lot, according to the option chosen on survival or death during the tenure of the policy.
1) Benefits under the immediate annuity plan
2) Benefits under the deferred annuity plans
Are there any rebates available?
There are certain rebates available under this plan:
There is an increase in an annuity if your purchase price is more than Rs 5 lakh.
If the plan is purchased online, there is a discount of 2% by way of increasing the annuity.
How to surrender LIC Jeevan Shanti Guaranteed Pension Plan?
The policy can be surrendered after the completion of 3 months or expiry of the free-look period, whichever is later in the deferred annuity plan. However, in the immediate annuity plan, it is available under option F and J.
Comparison of LIC Jeevan Shanti pension plan vs. Jeevan Akshay vs. Jeevan Nidhi vs. Pradhan Mantri Vaya Vandana Yojana
The policy of LIC Jeevan Shanti came as a surprise as it comes with deferred annuity option along with the immediate annuity plan. The previous plan of LIC-Jeevan Akshay was for non-government pension seekers and it comes with a single option of immediate annuity. Before Jeevan Shanti, Jeevan Nidhi was the plan for deferred annuity which provides insurance cover also. Pradhan Mantri Vaya Vandana Yojana was another popular scheme of LIC which served only senior citizens.
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Should you opt for LIC Jeevan Shanti Guaranteed Pension Plan?
Jeevan Shanti Plan is a single premium plan which ensures you receive a fixed sum of money either immediately or after a certain period. However, investment in such products yields low returns (which is baked into the annuity). We all know that LIC products would provide anywhere between 5% to 6% returns only. The annuity increase is only 3% compared to normal inflation of over 5%, which is also a major negative factor in this pension plan. If you apply in online pension plan, you would get a 2 % discount. If you are a low risk taker, you can invest in such pension plans through online. Alternatively, you can look for monthly income plans which can provide better returns.
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LIC Jeevan Shanti Guaranteed Pension Plan – Should you opt
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I am 50 yrs age. I want to invest Rs 10 Lakh on LIC Jeevan Shanti.
What will be monthly pension amount and upto what age will I recieve te pension.
On my death will my nominee get back the 10 Lakh.
Jeevan Shanti plan is available only to people above the age of 60.
Monthly you will get 4500. Yearly 56100. You will get this amount till you are live. There is no age limit in the plan. Yes your nominee will get the entire amount back after your death.
At the outset I would like to thank You for giving valuable time and input in public domain…. you have given the be fitting answer with proper calculation to the LIC AND THEIR AGENT which is an eye opening info for the perspective investor …. I m the victim of this policy, even after investing 7.5 L I m getting just 3900 per month which is utter loss… If I would have made FD under senior citizen definitely I would have got nearly 5000 per month… The worst part is that now I cannot surrender it as there is no such option available under my scheme…..
Rups, Thank you for your valuable inputs. Your comment would help other readers to get an idea about this LIC pension plan