LIC Jeevan Akshay Plan

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LIC Jeevan Akshay Plan is a Pension Plan with immediate annuity taken by senior citizens of the country and is offered by one of the most prestigious insurance companies of India – Life Insurance Corporation (LIC). It is a highly recommended pension plus investment plan where a lump-sum amount is paid, and the policy remains valid for a regular interval of time after which payment is made to the policyholder as pension as per the convenience of his mode and type for which many options are available.

* LIC Jeevan Akshay VI Plan has been withdrawn by LIC.

What is LIC Jeevan Akshay Plan?

LIC Jeevan Akshay Plan offers lucrative options to the policyholder to receive pay-outs during the lifetime of the annuitant who has paid the premium as a lump-sum amount. The annuity can be paid in monthly/quarterly/bi-annually/annually and has 6 options to choose from. The chosen option of pay-out cannot be changed as the pension start immediately after the period specified.

Features of the LIC Jeevan Akshay Plan

Type of Plan	An Annuity Pension Plan
Premium	Has to be paid in lump-sum as a one-time payment
Annuity Payment	Monthly. Quarterly, bi-annually or annually
Medical Examination	Not Applicable
Special Incentives	Only if the plan is bought online. If the cost of purchases is more than Rs. 2.5 Lakh, then the policyholder will be eligible for incentives which will give the benefit of a higher amount of annuity.
Cost of Policy	A minimum one-time payment is Rs. 1 Lakh If a policy is purchased online, then a minimum amount of one-time payment is Rs. 1.5 Lakh Maximum Limit – No Upper Limit
Entry Age	30 years
Maximum Age	85 years
Free Look Period	15 days
Grace Period	Not Applicable
Loan Facility	Not Applicable
Surrender Value	Not Applicable
Additional Riders	Not Applicable
Paid-up Value	Not Applicable
Options regarding Annuity	There are seven options available under this category: Option 1 – Annuity for Life The pension amount is paid to the policyholder till he is alive. Option 2 – Annuity guaranteed for a certain period Under this option, it does not matter if the policyholder is alive or not, but the pension is payable for a specific period. Option 3 – Annuity with a return of purchase price on the individual’s death Pension is paid to the policyholder till the time he is alive. After his unfortunate death, the remaining amount is paid out to the beneficiary or nominee of the policyholder. Option 4 – Increasing Annuity Under this option, the pension amount is paid out to the insured at the rate of 3% per annum till the time he is alive. Option 5 - Joint Life Last Survivor Annuity Under this option, in case of the unfortunate death of the annuitant, 50% of the annuity that is payable is paid out to the spouse till the time he/she is alive. Option 6 - Joint Life Last Survivor Annuity In this case, 1000% of an annuity can be payable to the spouse in the same conditions as in option 5. Option 7 - Annuity for life This comes with a provision of pay-out of 100% annuity, which is payable to the policy holder's spouse during their entire life in case of the policy holder's death. In this case, the purchase price will also be returned and paid out when the last survivor dies.

Options regarding Annuity

Let us study the above 7 Annuity options with a given example:

Single-Premium Amount	Mode of Pension	The age of the policyholder
Rs 5 Lakh	Annual	60 years

Option 1 – Annuity for Life

Under this plan, as per the above example, Rs. 48, 750 will be payable to the insured as annual pension which remains constant and won't change once the policyholder fixes this option.

Option 2 – Annuity guaranteed for a certain period

Under this option, the policyholder will receive the annuity whether he is alive or not, and he has 4 options to choose from. Let us study the plans available under this category:

For 5 years – In this case, Rs. 48,300 will be paid as pension for 5 years whether the policyholder is alive or not. In case the annuitant survives, the same amount of pension will be paid out to him till the time he is alive.
For 10 years - In this case, Rs. 47,300 will be paid as pension for 5 years whether the policyholder is alive or not. In case the annuitant survives, the same amount of pension will be paid out to him till the time he is alive.
For 15 years - In this case, Rs. 45,950 will be paid as pension for 5 years whether the policyholder is alive or not. In case the annuitant survives, the same amount of pension will be paid out to him till the time he is alive.
For 20 years - In this case, Rs. 44,400 will be paid as pension for 5 years whether the policyholder is alive or not. In case the annuitant survives, the same amount of pension will be paid out to him till the time he is alive.

Option 3 – Annuity with a return of purchase price on the individual’s death

This option is more like a fixed deposit, in which the depositor gets the money back that was invested by him along with the benefit of pension plans. Under this option of annuity, the policyholder will get Rs. 37550 as an annual pension till the time he is alive. After the unfortunate death of the annuitant, an amount of Rs. 5 lakhs will be paid to the beneficiary of the policyholder and the policy is terminated.

Option 4 – Increasing Annuity

Under this option, the pension amount is paid to the insured at the rate of 3% per annum till the time he is alive. So, the amount of Pension paid out each year will be Rs. 39, 650 till the time the annuitant is alive. Every year, Rs. 1190 will be added, which is calculated at 3% of Rs. 39650.

Option 5 - Joint Life Last Survivor Annuity

Under this option, in case of the unfortunate death of the annuitant, 50% of the annuity that is payable is paid out to the spouse till the time he/she is alive. In this case, the policyholder gets Rs. 45200 as an annual pension till the time he is alive. After his death, his spouse will be eligible for a 50% of this pension amount, i.e. Rs. 22600.

Option 7 - Annuity for life

This comes with a provision of pay-out of 100% annuity, which is payable to the policyholder's spouse during their entire life in case of the policyholder's death. In this case, the purchase price will also be returned and paid when the last survivor dies. So, the policyholder will get Rs. 37050 as an annual pension till he or she is alive. After that, the nominee will also get Rs. 37050 as an annual pension. It is only after the death of the spouse, that a lump-sum amount of Rs. 5 lakhs is also paid out.

Benefits of LIC Jeevan Akshay Plan

Here is a rundown to the core benefits offered by LIC Jeevan Akshay Plan:

Maturity Benefits

Unlike other LIC Plans, there is no maturity benefit offered to the policyholder. The pay-out depends on a one-time payment, soon after which the pension for the policyholder starts. Some options are available to extend the benefits to the spouse even after the death of the insured at specific time gaps.

Death Benefits

Again, unlike other LIC Plans, there is no maturity benefit offered to the policyholder. The pay-out is made as a one-time payment, soon after which the pension for the policyholder starts. Some options are available to extend the benefits to the spouse even after the death of the insured at specific time gaps.

Profit Participation

There is a good chance to earn some profit which can benefit the insured during the policy term. This is made good only if the policy is in force and is active. The policy is applicable for a simple reversionary bonus which is further calculated based on the amount of premium paid.

Pension Rate

The rate of the amount of Pension depends upon the annuity plan chosen from the 7 available annuity options, by the policyholder as discussed above. But if the option is chosen, the insured cannot go back on the plan as the benefits of the pension immediately start after making a one-time payment towards the plan.

Annuity Benefit

The minimum amount of pension that can be paid out is Rs. 6000 and the maximum can go up to Rs. 60000 (approximately) as the amount varies depending on the payable taxes. The mode of the annuity is chosen from the 7 given benefits and pensions immediately starts as soon as the premium is paid up by the insured.

Tax Benefit

Just like the other LIC policies, LIC Jeevan Akshay is also applicable for tax deductions. The amount of premium paid towards the policy is exempted from tax under section 80C of the Indian Income Tax Act, 1961. The amount of pension received is also exempted from tax as per the terms and conditions. *Tax benefit is subject to changes in tax laws.

Inclusions of LIC Jeevan Akshay Plan

Eligibility conditions are as follows

Minimum Age Entry	30 years
Maximum Age Entry	65 years
Minimum Purchase Cost	Rs. 1 Lakh and for online mode it is Rs. 1.5 Lakh
Maximum Purchase Cost	Unlimited
Mode of Payment	Monthly, Quarterly, Half-yearly and Yearly

When does the Annuitant get the Pension?

Based on the plan of annuity chosen by the policyholder and the mode of payment selected by the annuitant, the policy is paid out as follows:

Monthly	Starts 1 month after the annuity is purchased
Quarterly	Starts 1 month after the annuity is purchased
Half- Yearly	Starts 1 month after the annuity is purchased
Yearly	Starts 1 month after the annuity is purchased

Details of Premium to be paid (standard rate is taken as Rs. 1 Lakh)

Age in years	Annuity Options
Age in years	1	2	3	4	5	6	7
30	Rs. 7190	Rs. 7160	Rs. 6890	Rs. 5250	Rs. 7080	Rs. 6970	Rs. 6860
40	Rs. 7510	Rs. 7440	Rs. 6930	Rs. 5610	Rs. 7310	Rs. 7120	Rs. 6890
50	Rs. 8140	Rs. 7950	Rs. 7000	Rs. 6280	Rs. 7760	Rs. 7420	Rs. 6930
60	Rs. 9350	Rs. 8790	Rs. 7110	Rs. 7530	Rs. 8640	Rs. 8030	Rs. 7010
70	Rs. 12080	Rs. 9830	Rs. 7260	Rs. 10220	Rs. 10560	Rs. 9370	Rs. 7130
80	Rs. 17880	Rs. 10440	Rs. 7480	Rs. 15890	Rs. 14600	Rs. 12340	Rs. 7290

Incentives for Higher Price of Purchase

If a policy is bought which has a purchase price of above Rs. 2.5 lakhs, then it is applicable for an incentive.

Also, if the policy is bought online, a rebate of 1% applies to the rate of the annuity.

Service Tax

The applicable service tax rate, which is applicable as per the service tax laws at a regular period of times, is paid along with the purchase price according to the prevailing rates. *Tax benefit is subject to changes in tax laws.

Surrender Value

The policyholder can surrender the policy only after it completes one year in case of two options – Annuity option and Annuity option with the return of purchase price.

The circumstances are as follows:

• Cancer of specified severity	• Cancer of specified severity	• Cancer of specified severity
• Myocardial infarction	• Myocardial infarction	• Myocardial infarction
• Open Chest CABG	• Open Chest CABG	• Open Chest CABG
• Open Heart Replacement or Repair of Heart Valves	• Open Heart Replacement or Repair of Heart Valves	• Open Heart Replacement or Repair of Heart Valves
• Kidney Failure requiring regular dialysis	• Kidney Failure requiring regular dialysis	• Kidney Failure requiring regular dialysis
• Stroke resulting in Permanent Symptoms	• Stroke resulting in Permanent Symptoms	• Stroke resulting in Permanent Symptoms
• Bone Marrow/Major Organ Transplant	• Bone Marrow/Major Organ Transplant	• Bone Marrow/Major Organ Transplant

Documents Required to buy LIC Jeevan Akshay Policy

Below is the list of documents that one needs to buy LIC Jeevan Akshay Policy:

Duly filled plan application form with the latest photograph of the applicant attached
Residence proof
Age Proof
Income Proof
Identity Proof

FAQs

Q1. What are the advantages of buying a LIC Pension Plan?
A1. There are many apparent and non-apparent advantages of buying a pension plan from LIC like:
- A regular income generated when the senior citizen is out of employment
- Hassle-free income, without knocking at doors and making much of an effort for it. The income is generated smoothly to the policyholder without any hassles
- Great opportunity for people in Private Jobs as in public organisations, the government takes care of factors like gratuity, pension, and retirement. But privately employed people have to plan for their retirement.
- Besides the amount of insurance, the return of these pension plans is much than the invested amount
- A guaranteed payout for the rest of the life of the annuitant is one of the many popular facilities offered by LIC Pension Plans.
Q2. What are the basic factors that one must consider for calculating his retirement corpus before purchasing LIC Jeevan Akshay or any Pension Plan?
A2. Some of the important factors that need to be considering for calculating the retirement corpus are as follows:
- Monthly expenditure of self, including necessitates and basic comforts
- Rate of Inflation as for retirement one needs to think many years ahead
- Age of retirement
- Expected number of years depending on the medical condition of the person that one expects to survive after retirement. Although there can be no certain number but based on the current condition, it can just be estimated.
Q3. Should I buy a LIC Pension Plan if I already have an operational PF account?

A3. Yes, Provident Fund is a lump-sum payment and can only be used for a few months or years, but it cannot suffice the entire period of retirement or no work period of the policyholder. A Pension Plan is a substitute for monthly or annual payment that the annuitant can take advantage of in the period of his retirement.
Q4. What is an annuity?

A4. An annuity is a regular income also popularly known as pension or allowance that is paid out by LIC to the policyholder after he retires.
Q5. Is it possible to surrender the LIC Jeevan Akshay Policy?
A5. Under most of the options available, there is no surrender value attached with LIC Pension plans which means that no lump-sum payment will be paid if the plan is surrendered. But with recent updates, many changes have been made within the policy and there is a surrender value attached with a few conditions only under the option "Return of Purchase Price". The conditions are:
- If the annuitant has shifted permanently to another country
- If the policyholder has been diagnosed with a critical illness
Q6. Is Annuity Income from LIC Jeevan Akshay Taxable?

A6. The annuity received by the policyholder by the corporation during his retirement is termed as income in the hands of the annuitant. The amount will be taxable as per the prescribed tax provisions and the tax bracket in which the policyholder falls into.

Q7.What is the advantages and disadvantages of Annuity?

A7.

Advantages of Annuity	Disadvantages of Annuity
The amount to be paid under annuity is guaranteed	The return rate is quite low as compared to the other insurance policies.
There is no maximum or upper limit of the invested amount	The amount derived from the reinvested annuity is taxable
Tax exemptions are available	The annuity plan cannot be changed once it is fixed at the beginning of the policy