LIC Jeevan Akshay VII (857): Immediate Pension Plan policy

There are various annuity plans prevailing in the market which provide risk free fixed pension schemes for the whole life.

LIC has also started a new plan which is LIC Jeevan Akshay VII (857) for the fixed pension to the single / joint policy holders.

It is an immediate (pension / annuity) plan i.e. you will be paid pension on the inception of the policy.

What are the features of LIC Jeevan Akshay VII (857)?

LIC Jeevan Akshay VII (857): Immediate Pension Plan policy - review

LIC Jeevan Akshay 7 (857) is an immediate annuity plan. It means that you have to pay a premium only once and the payment of pension will start immediately as per the period you choose i.e. monthly, quarterly, half yearly or annually throughout the life.

Here are the following characteristics of Jeevan Akshay VII (857) and the eligibility criteria of the plan:

Single payment plan
Entry age limit

Minimum= 30 years (completed)
Maximum= 85 years (completed) & (100 years for option F)

Purchase price of policy

Minimum= rupees 1 Lac
Maximum= no limit

You can opt for any pension payment option i.e. a monthly, quarterly, half yearly or annually.
Purchase price is decided keeping in view the minimum annuity requirement i.e. rupees 1000 per month (if taken for monthly annuity), rupees 3000 per quarter (for quarter), rupees 6000 for half year (for half yearly) and rupees 12000 per annum (for yearly).
You can buy a single life plan or joint life plan. In the Joint life plan the second annuitant could be spouse, grandparents, parents, children's, grandchildren’s.
Nominees can be appointed for the death benefits.

This annuity plan gives you various option plan i.e. Option A to Option J (discuss in the following paragraphs).

What are the options available in LIC Jeevan Akshay 7 (857)?

There are 10 options available that is Option A to Option J in LIC Jeevan Akshay VII (857), which are as follow:

Option A: Immediate annuity for life

In this option pension payment will be received throughout the life but after the death of the policy holder pension will stop and there are no death benefits will be paid to the nominee i.e. normally will not get a claim after the death of policy holder.

Option B: Immediate annuity plan for 5 years

Immediate annuity plan with guaranteed period of 5 years and life thereafter of annuitant

Pension payment will be received throughout the life.
If a policyholder dies after the guarantee period of 5 years then no pension will be received to the nominee after the death of the policy holder.
If the policyholder dies within the guarantee period of 5 years then pension will continue to receive till the end of the guarantee period and after that it stops.

Option C: Immediate annuity plan for 10 years

Immediate annuity plan with guarantee period of 10 years and life thereafter of annuitant

In this option pension payment will be received throughout the life of the policy holder.
If the policy holder dies after the guarantee period of 10 years then no pension will be received to the nominee after the death of the policyholder
If the policyholder dies within the guarantee period 10 years then pension will continue to receive till the end of the guarantee period and after that it stops.

Option D: Immediate annuity plan for 15 years

Immediate annuity plan with guarantee period of 15 years and life thereafter of annuitant

Pension payment will be received throughout the life.
If the policy holder dies after the guarantee period of 15 years then no pension will be received to the nominee after the death of the policyholder.
If the policyholder dies within the guarantee period 15 years then pension will continue to receive till the end of the guarantee period and after that it stops.

Option E: Immediate annuity plan for 20 years

Immediate annuity plan with guarantee period of 20 years and life thereafter of annuitant

In this option pension payment will be received throughout the life.
If the policy holder dies after the guarantee period of 20 years then no pension will be received to the nominee after the death of the policyholder.
If the policyholder dies within the guarantee period of 20 years then pension will continue to receive till the end of the guarantee period and after that it stops.

Option F: Immediate annuity plan with return of investment price

In this option pension payment will be received throughout the life of the policy holder

If the policyholder dies then no pension payment will stop.
Purchase price / investment price will return to the nominee (except the GST charges at the time of purchase).

Option G: Immediate annuity plan with increasing 3% annually

Immediate annuity plan with increasing at a simple rate of 3% per annum

In this option pension payment will be received throughout the life with an increase of 3% per annum at each completed year of policy.
If the policy holder dies then nothing will be returned and the pension also gets stopped.

Option H: Immediate annuity plan for Joint life with 50% pension to second policy holder after primary annuitant

Immediate annuity plan for Joint life with provision of 50% of the pension to secondary annuitant on the death of primary/ main annuitant

In this option pension payment will be received throughout the life.
If in Joint life policy, the primary annuitant dies then the second applicant will continue to receive pension but it is 50% of the original pension. If after then the second annuitant will also die then no amount will be paid to the nominee.
If the secondary annuitant dies earlier than the primary annuitant will continue to receive full pension payment throughout the life.

Option I: Immediate annuity plan for Joint life with provision of 100% pension to any survival policy holder

Immediate annuity plan for Joint life with a provision of 100% of the pension payable till any of the annuitant survives.

In this option pension payment will continue to receive in full i.e. 100% till any of the annuitant survives. Means even if the primary annuitant died then 100% of the pension will continue to be received by the second annuitant.
But if both annuitants die then no payment will be paid to the Nominee.

Option J: Option I + Return of Investment Price

Immediate annuity plan for Joint life with the provision of 100% of the pension payable till any of the annuitants survive with return of purchase price.

This option is the same as “option I” and the only difference is that in addition to this the nominee will receive the purchase price / investment price after the death of both the annuitants.

Additional information related to LIC Jeevan Akshay Vii (857):

Tax benefits

Tax benefit will be allowed under section 80ccc in the overall limit of section 80c of rupees 1.5 lacs.
Annuity premium payment is taxable at normal slab rates.

Loan

Loan facilities will be allowed in Option F and Option J.

Surrender value

Only in option F and option J, surrender of policy is allowed and not in any other policy.

Conclusion

LIC Jeevan Akshay VII (857) immediate pension plan is beneficial for those who want risk free fixed pension. As in the scheme interest rate is fixed at the inception of the agreement.

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LIC Jeevan Akshay VII (857): Immediate Pension Plan policy - review