LIC Jeevan Shanti Pension Offers Lucrative Benefits After The Deferment Period

LIC Jeevan Shanti (858) was launched in October, last year offering a lucrative annuity plan. An annuity plan is commonly known as a pension plan; it will secure your future after the deferment period. The modes of annuity available are yearly, half-yearly, quarterly and monthly.

What is LIC Jeevan Shanti Plan?

LIC Jeevan Shanti is a single premium plan deferred, and the subscriber can select between Single life and Joint life deferred annuity plans. It is a deferred plan that means you will get the pension after a particular timeline as decided earlier; which is different from an immediate annuity plan that will start immediately after you start investing. Hence, under this pension plan, the annuity rate will be guaranteed at the inception of the policy and annuities are payable post deferment period throughout the lifetime of the annuitant(s). It is a non-linked plan that means the returns from this plan will not depend on the markets, and the performance will not depend on the performance of underlying assets.

Benefits – single life and joint life

During the deferment period, if the policyholder survives, nothing will be paid. On the death of the policyholder, the death benefit will be paid. On the other hand, after the deferment period, the annuity payments will be paid in arrears for as long as the policyholder will be alive. If the policyholder dies, the annuity payments will be ceased immediately, while the death benefit will be paid to the nominee(s). In the case of the joint-life option, during the deferment period, if the Primary Annuitant and/or Secondary Annuitant survives, nothing will be paid, but on the death of the last survivor, the death benefit will be paid to the nominee(s).

Purchase Price and eligibility

The minimum purchase price, under this pension plan, is Rs. 1,50,000, which is subject to the minimum annuity, while there is no limit on the maximum purchase price. For LIC Jeevan Shanti, the minimum entry age is 30 years, while the maximum entry age is 79 years. On the other hand, the minimum vesting age is 31 years, and the maximum vesting age is 80 years. The minimum deferment period for a policyholder will be 1 year, and the maximum deferment period will be 12 years, both are subject to the maximum vesting age. However, LIC informs that if the pension policy is purchased for a dependant person with a disability, the proposal shall be allowed without any restriction on minimum annuity and the minimum purchase price under such cases shall be Rs. 50,000.

Annuity calculation

Here is a calculation below to understand the annuity benefits (annuity amount payable - INR) of the planning, considering - the purchase price at Rs. 10 lakh (excluding taxes), age of annuity at 45 years, deferment period at 12 years, and age of the secondary annuitant at 35 years.

Annuity Option	Yearly	Half Yearly	Quarterly	Monthly
Deferred annuity for Single life	99400	48706	24105	7952
Deferred annuity for Joint life	94100	46109	22819	7528

LIC informs in a document that the policyholder(s) will have to select one of the following options for the payment of the death benefit to the nominee(s).

Death benefits

Death benefits will be higher of the purchase price plus accrued additional benefit on death minus total annuity amount payable till death - if any, or 105% of Purchase Price, in both single life and joint life options. In addition to that, the annuity rate PA will be paid monthly shall be equal to annuity rate per unit Purchase Price applicable for monthly mode, without applying any incentive and shall depend on the Option chosen, age at entry of the annuitant(s) and the deferment period opted for. In case the policyholder dies during the deferment period, an additional benefit on death for the policy year in which the death/surrender has occurred will accrue till the completed policy month, till death.