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LIC Jeevan Shanti Plan

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LIC offers yet another enhanced pension scheme to the citizens. LIC Jeevan Shanti helps by providing fixed payouts at regular intervals for the entire life. The plan has dual benefits of return options to choose from; they are an immediate or deferred annuity. This plan is suited to every need and circumstances of citizens as it offers different options.

These options are available to both immediate and deferred annuity. The pension rates under this plan are guaranteed at the inception of the policy for both annuities. The policy can be taken as self or joint with other members of the family, including grandparents or grandchildren.

What is LIC Jeevan Shanti Plan?

To understand this plan better, let us first get to know about an annuity. An annuity is regarded as a pension where the pensioner will receive regular income for a specified period. As we can see, this plan has two types of annuities.

Immediate Annuity

Here, the pensioner invests a lump sum amount and avails returns as pension or annuity immediately. Suppose an investor has a lump sum amount of 1 Crore, he can purchase an immediate annuity plan for this amount. The benefit is his pension starts immediately from the next month of his purchase made.

Deferred Annuity

The annuity here starts after a certain period. If an insurance seeker at 30 years wants a retirement investment at 60 years, he can buy a deferred annuity. He will pay his premiums up to the age of 60 years. After 60 years, the accumulated premiums are payable as annuity or pension.

Therefore, pensioners can choose to withdraw the returns immediately in an immediate annuity plan and delay the returns in a deferred annuity plan. The deferment period being one year to a maximum of 20 years.

This is a non-linked and non-participating plan with a single premium payment. Under the two annuities it provides, immediate and deferred, it offers numerous options. There are 10 options available in an immediate annuity, out of which two have life cover options. Deferred annuity plan has two options, both providing life cover.

All options are personalized to meet the requirements of the policyholder. Each option under both annuities has a unique set of features.

Here is the detailed list of options offered under this plan:

Immediate Annuity Plans

Options Available

Description

Option A

Receives annuity immediately

Lifetime return of the annuity

Payments received in monthly, annually, quarterly or biannually

Annuity stops after the demise of the pensioner

Option B

Guaranteed payment for five years.

In case of the death of the policyholder within the five years, the beneficiary can receive the sum assured.

If the policyholder survives, the returns can be benefited as a pension for a lifetime

Option C

Guaranteed payment for 10 years.

In case of the death of the policyholder during this period, the beneficiary can avail the sum assured.

On survival of the policyholder, lifetime payment is assured

Option D

Guaranteed payment for 15 years.

Upon the death of the policyholder during this period, the beneficiary receives the assured sum.

Upon survival of the policyholder, lifetime returns assured.

Option E

Guaranteed payment of 20 years

Upon the death of the policyholder during this period, the beneficiary receives the assured sum.

Upon survival of the policyholder, lifetime returns assured

Option F

The death benefit to the beneficiary.

Upon the death of the policyholder, the beneficiary is entitled to the sum insured with the returns as applicable

Option G

Immediate Annuity for life

Increase of 3% rate every year

Option H

Joint annuity plan

Upon the death of one of the policyholder, 50% of the amount payable to the other person as pension till survival

Option I

Joint annuity plan

Upon the death of one of the policyholders, 100% of the amount payable to the other person as pension

Option J

Joint annuity plan

Upon the death of one of the policyholders, 100% of the amount payable as pension to the other person with the return of purchase price on death of the last survivor. The amount is equivalent to the sum insured along with remaining returns if any.

Deferred Annuity - 4 Options

Option 1 & 2

Single life cover

Before deferred term- Death benefits to the beneficiary upon the death of the pensioner before the deferred period.

After deferred term-Guaranteed returns with an annuity. Death benefits to the beneficiary upon the death of the pensioner and annuity payment ceases

Option 3 & 4

Joint life covered

Before deferred term-If one of the policyholders dies during the deferred term, then the other gets the death benefits.

After deferred term-If one of the policyholders dies after the deferred term, the other survivor receives the death benefits. The annuity payment ceases

*The above information is subject to change as per the norms of insurance providers

Features and Benefits of LIC Jeevan Shanti Plan

LIC Jeevan Shanti Plan by Life Insurance Corporation of India (LIC of India) has some of the best salient features to offer to its buyer. Apart from the salient features LIC Jeevan Shanti also comes packed with handful benefits. Some of the key features and core benefits of LIC Jeevan Shanti Plan are as follows:

  • Lifetime income through a single investment
  • Dual annuities
  • The privilege of guaranteed additions during the period of deferment
  • Minimum investment of Rs. 1.5 Lakh
  • There is no limit on the maximum amount
  • Deferred annuity plan allows the policyholder to choose the term from one year to a maximum of 20 years
  • Guaranteed annuity rates from the initiation of the policy
  • Minimum age of entry 30 years completed and maximum age 80 years and above
  • Availability of loan after completion of one year of the policy. This facility is available under certain options in an immediate annuity plan. Loan facility is available in both options under deferred annuity
  • Surrender of the policy after completion of three months of the policy along with annuity and return of purchase price. This facility is available for both options under the deferred annuity. The surrender option is available only for two options under an immediate annuity plan
  • Cancellation of policy within 15 days period if not satisfied with the policy. Standard T&C Apply
  • The flexibility of payment of the annuity at monthly, quarterly, bi-annually, or annually
  • Tax benefits under Section 80CCC (*Tax benefit is subject to changes in tax laws)
  • Purchase through offline and online mode

Benefits of Immediate Annuity Option under LIC Jeevan Shanti Plan

The benefits of immediate annuity plan are:

  • The annuity payment will be made as per the frequency chosen by the policyholder. The frequency can be monthly, quarterly, semi-annually, or annually. The payment frequency cannot be changed by the nominee
  • There is no death benefit paid to the nominee under the immediate annuity plan, and the policy will end immediately on the death of the policyholder
  • If the person insured dies during the guaranteed period, then the beneficiary of the policy will get an annuity amount till the end of the aforementioned period
  • The immediate annuity payment will be paid in a mode as selected by the person insured
  • On the death of the policyholder after the end of the guaranteed period, the policy will end immediately, and no amount will be paid under the immediate annuity option
  • Under the immediate annuity option, if the policyholder dies, then the nominee will get the purchase price of the policy, and no other payments will be made
  • If the primary policyholder dies, then the secondary surviving person insured will get 50% of the annuity sum. If the secondary annuitant also dies then the annuity payments will stop, and the policy ceases
  • If the secondary policyholder dies and the primary annuitant is alive, then the primary annuitant will get the regular payments under the immediate annuity option
  • 100% of the annuity payment will be paid to the primary policyholder if both the annuitants of the plan are alive under the selected payment option
  • On the death of the last annuitant, all the payments will stop, and the purchase price of the plan will be paid to the policy beneficiary, i.e., the nominee

*The above information is subject to change as per the norms of insurance providers.

Benefits of Deferred Annuity Option

Some of the core benefits of deferred annuity option are as follows:

Death benefits made available only for two options under the deferred annuity. Death benefits are available for both options under the deferred annuity. The benefits will be higher of the purchase price plus accrued guaranteed additions minus total annuity payments made if any or 110% of the purchase price. The guaranteed additions are calculated as the purchase price annuity rate per annum payable monthly/12. The annuity rate will depend on the age of entry of the policyholder and the deferment period

Payouts under Deferred Annuity under LIC Jeevan Shanti Plan

Here is a rundown to the payouts under deferred annuity under LIC Jeevan Shanti Insurance Policy by LIC of India:

Deferred Annuity Plan

Let us decode the deferred annuity plan:

Option I - When the policy is in the deferment period

  • No sum will be paid to the person insured on their survival during the deferment period. On the death of the policyholder, the death benefit will be paid to the nominee.

Option II - After the deferment period is over

  • In this option, the annuity option will be paid according to the method and frequency as selected by the annuitant as long as they are alive
  • If the policyholder dies after the deferment period is over, then the nominee gets the death benefit, and the further annuity payments stop

Option III - When the policy is in the deferment period

  • On the survival of both the annuitants, i.e., primary and secondary, no survival benefit will be paid to the policyholder
  • In this option of both of the annuitant dies then a death benefit will be paid to the nominee

Option IV - After the deferment period is over

  • The annuity will be paid as long as both annuitants are alive according to the payment selected by the primary annuitant
  • If the primary annuitant dies, then 50% of the annuity sum will be paid to the secondary annuitant
  • If the secondary annuitant dies, then 100% of the annuity sum will be paid to the primary annuitant
  • On the death of both annuitants, annuity payments will cease immediately, and a death benefit shall be paid to the nominee

*The above information is subject to change as per the norms of insurance providers

Here is a concise view of the whole features of the plan

Factors

Particulars

Minimum Amount of Purchase

1.5 Lakh

Annuity Term

Lifetime

Investment Age

30 to 100 years

Annuity Options

10 options for Immediate Annuity

2 options for Deferred Annuity

Investment

One time

Returns

Immediate or Deferred

Life Cover

Individual or Joint

Surrender

After three months of purchase

Freelook Period

15 Days

Annuity Payment Modes

Monthly, quarterly, annually or semi-annually

Deferment Period

Immediate Annuity: Not Applicable

Deferred Annuity: 1-20 years

Vesting Age

Immediate Annuity: Not Applicable

Deferred Annuity: 31 to 80 years

Let us evaluate the options and features further under the immediate and deferred annuity plans. An annuity is purchased for a sum of Rs. 10 lakhs. The pensioner bought the plan at 42 years of age. Then the amount payable to the purchaser is as follows:

Under Immediate Annuity:

  • Option A: 74,300
  • Option B: 74, 200
  • Option C: 73,900
  • Option D: 73, 500
  • Option E: 72, 900
  • Option F: 65, 400
  • Option G: 56, 200
  • Option H: 71,100
  • Option I: 68,300
  • Option J: 64,900

Under Deferred Annuity:

  • Option 1: 2, 06, 600 (20 years period)
  • Option 2: 2, 27, 200 (20 years period) 

A 50-year-old pensioner purchases a deferred annuity option for a sum of Rs. 25 lakhs. The deferment period is 10 years. The annuity will be as follows:

  • Deposit Amount:  Rs. 25 Lakh
  • GST: 45,000
  • One Time Deposit: Rs. 25,45,000

On payment of Rs. 25,45,000, the pension starts from 60 years of age and will be active as long as the policyholder survives. The pension will be payable in the following modes:

  • Yearly: 32, 1625
  • Half-yearly: 15,7533
  • Quarterly: 77946
  • Monthly: 25,709

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply.

Inclusions of LIC Jeevan Shanti Plan

  • An added benefit for handicapped dependent - Provision for a reduction in the minimum amount of investment

If the plan is purchased online, an additional 2% added to the pension amount. A pensioner aged 60 years invests Rs. 10 lakhs under deferred annuity option A. the annual pension payable to him every year is Rs. 90,942. If the same policy is purchased offline, the policyholder receives 2% less. The annual pension he would receive would be Rs. 89, 158 every year.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply.

  • A provision of a small incentive on investment on larger amounts

Exclusions of LIC Jeevan Shanti Plan

Here are the exclusions of LIC Jeevan Shanti Plan

Immediate Annuity Regarding Option F and Option J

If death committed by suicide by any one of the policyholders, then the policy is invalid within the period of 12 months from the date of inception of the policy. Only the surrender value or 100% of the purchase price paid will be payable.

Deferred Annuity

If death committed by suicide by any one of the policyholders, then the policy is invalid within a period of 12 months from the date of inception of the policy.  Only the surrender value or 80% of the purchase price paid will be payable.

A medical exam is not required at the time of purchase of the plan.

*Disclaimer- This list is only indicative and not exhaustive. Insurance companies have various exclusions mentioned in the policy document.

Eligibility Criteria for LIC Jeevan Shanti Plan

Age

Immediate

Deferred

Minimum

30 years

30 years

Maximum

85 years except for Option F

100 years for Option F

79 years completed

Minimum Deferment Period

Not Applicable

1 year

Maximum Deferment Period

Not Applicable

20 years subject to maximum vesting age

Minimum Vesting Age

Not Applicable

31 years completed

Maximum Vesting Age

Not Applicable

80 years completed

 

  Period

 Criteria

 Minimum age at entry

30 years completed

Annuity Mode

 Minimum annuity

Monthly

1000 per month

Quarterly

3000 per quarterly

Half-yearly

6000 per half-year

Annual

12,000 per annum

Premiums

Terms

Details

Minimum Purchase Price

Rs. 1,50,000

Maximum Purchase Price

No limit

Note: Lower purchase price for handicapped dependents.

The Claim Process for LIC Jeevan Shanti

All the necessary documents required for the policy need to be submitted to the provider. This applies to both immediate and deferred annuity. After submission, a pre-fixed pension amount is directly transferred to the pensioner’s account by the provider.

In case of the death of the pensioner, additional documents will be requested by the provider. The claim process for the plan is made easier with support from authorized and expertized agents. They coordinate and follow up with LIC to get the claim processed quickly.

The death benefits can be claimed only if the option bought under the plan has death coverage.

Surrender of Policy - The policyholder can surrender the policy on completion of three months from the inception of the policy.

The policyholder can surrender the policy only if he is under the following options:

Immediate Annuity

  • Option F - Return of purchase price with immediate annuity for life
  • Option J - Joint life immediate annuity for life, 100% of the annuity payable if one of the policyholders survive, and return of purchase price on death of the last survivor

Deferred Annuity

  • Option A: Single life
  • Option B: Joint life

The policy cannot be surrendered for any other options under the plan.

Death claim details during deferment period-In the event of the death of the policyholders during the deferment period, the death claims are of a higher value of the following two values:

  • Purchase Price + Accumulated Guaranteed Additions OR
  • 110% of Purchase Price

(Guaranteed Additions Per month =Purchase Price Annuity Rate per annum payable monthly /12)

Death claim details after deferment period-In the event of the death of the policyholders after the deferment period, the death claim is of a higher value of the following two values:

  • Purchase Price + Accumulated Guaranteed Additions-Total Annuity payouts till the date of death OR
  • 110% of Purchase Price

Death claim is payable to the nominee. The nominee is given the option to take death claim as a lump sum amount or installments or in the form of an annuity. If nominee opts in the form of an annuity, it will be similar to buying a new policy against the death claim amount.

Documents Required to Claim under LIC Jeevan Shanti

The following documents can be submitted to claim the sum assured at the time of purchasing the plan:

  • Death certificate
  • Original policy bond
  • Identity proof
  • Nominee application
  • NEFT mandate. This is required from the claimant for direct credit of the claim amount to the bank account

The authorized agents should be intimated of the death of the policyholder within 90 days from the date of death.

For annuity to be received, an Existence Certificate of the policyholder needs to be submitted.

With regard to Option H, I, J, and Option B of Deferred Annuity- In case of death of the policyholder, an Existence Certificate of the surviving secondary policyholder needs to be submitted.

On surrender of the policy, the documents required are:

  • Discharge form
  • Original policy bond
  • Identity proof
  • NEFT mandate from the claimant

Why should one buy LIC Jeevan Shanti Plan?

Here are the key reasons to buy LIC Jeevan Shanti Insurance Policy by Life Insurance Corporation of India:

  • The policyholder is entitled to get tax benefits under Section 80CCC of the Income Tax Act, 1961 (*Tax benefits are subject to change under tax laws)
  • LIC Jeevan Shanti plan has two options in the main plan- first is the immediate annuity option, and the second is the deferred option. These two options are further divided into multiple sub-options to offer more flexibility to the person insured. There are 10 various options provided under the immediate annuity plan and 4 options under the deferred option. The policyholder can choose from any of the mentioned options
  • This policy can be bought offline as well as online
  • The policy provides guaranteed income options according to a frequency as decided by the policyholders. The policyholder can choose an option to either avail an income for their lifetime or can choose to pay a lump sum amount on their death or return of the purchase price on the death of the policyholders

*Disclaimer: PaisaWiki does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

How to Buy LIC Jeevan Shanti Plan?

The purchase of the plan is made easy, secure, and fast by logging into the official websites. Online purchase is the most preferred choice of purchase. After filling in details on the website, payments can be made through online transactions. Customers can avail of the online rebate for the plan. Policy details will be sent to the registered email.

Before choosing the plan, it is important to go through all the features of the plan. Customers can compare different options available to see, which is the most suited for them.

The plan can be purchased offline by visiting any of the authorized banks. All options under this plan can be discussed with expert agents and select the right option.

Required Documents to apply for LIC Jeevan Shanti Plan

Documents required at the time of purchase are as follows:

  • ID proof-PAN card, Aadhar card, Passport
  • Address proof

The Renewal Process of the LIC Jeevan Shanti Plan

Customers can log in to the official websites and renew the policy. They can also contact the authorized agents or banks for the renewal of the policy.

The policy gets lapsed on non-payment of premium. A lapsed policy can no longer provide annuity or benefits. The policy can be revived on the payment of overdue premiums.

Take-a-ways of LIC Jeevan Shanti Plan

Here are the key take-a-ways of LIC Jeevan Shanti Plan:

  • The minimum amount a policyholder needs to invest under the plan is about ₹1,50,000, and there is no maximum limit for investment in this plan
  • For applying to this plan, the minimum age of the policyholder must be 30 years, and the maximum can be from 79 years to 100 years which depends on the option chosen
  • The policyholder needs to make a lump sum payment option of a minimum amount for purchasing this policy
  • The policyholder can choose to take the maturity amount by making an annuity or deferred payment option. For the immediate annuity option, the policyholder can start getting the regular payouts immediately after the lump sum premium payment. For the deferred payment option, the annuity payment option can be started after a fixed period as chosen by the policyholder. The time period of receiving the payment can range from 1 to 20 years
  • One can avail a loan in the policy after 1 year of the commencement of the policy. For immediate annuity option, the loans can be availed only under Option F and Option J. For deferred payment; the loan can be taken under all four options
  • The policyholder can surrender the policy after 3 months from the date of commencement of the policy. The surrender option is available for Option F and Option J under the immediate annuity. Under the deferred option, one can surrender the policy in all four sub-options
  • The policy has a 15 day free look period within which the policy can be returned
  • For those policyholders having a dependant handicapped person, they can get a special privilege of reducing the minimum amount to be invested under this plan
  • The policyholder has an option to choose the frequency of the annuity payments as per their convenience, like monthly, quarterly, semi-annually and annually

Conclusion

Having bagged several awards such as Excellence Award and Innovative Product Award, LIC of India is the most trusted service. It can reach out to all segments of the population. The wide range of options allows diverse customers to join the policy for maximum financial stability.

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Written By: Paisawiki - Updated: 12 April 2021