What is LIC Jeevan Akshay VII Plan 857?
LIC Jeevan Akshay VII Plan is a single premium non linked immediate annuity plan offered by India’s most trusted insurance company Life Insurance Corporation of India. This pension plan has been reintroduced by the LICI w.e.f 25.08.2020.
Earlier this annuity cum pension plan was operating in the name LIC Jeevan Akshay 6 Plan and it was withdrawn in December 2017 after launching LIC Jeevan Shanti Plan.
Therefore, now the Life Insurance Corporation of India has reintroduced the old LIC Jeevan Akshay VI Plan in the name of LIC Jeevan Akshay VII Plan 857. It is an immediate annuity plan.
To eradicate confusion among the investors with similar plans, LICI has made the LIC Jeevan Shanti Plan a deferred annuity plan. It is not an immediate annuity plan anymore.
You invest a lump sum amount to this LIC Jeevan Akshay VII Plan 857 and in return, they pay you a stated fixed annuity amount for the rest of your life. This regular payment from this plan is known as a Pension payment.
An annuity is popularly known as a Pension plan. An Annuity can be defined as a contract between two parties such as an insurer and a policy-holder.
In that agreement, the insurer agrees to pay a predetermined amount for a specific period of time to the policy-holder in exchange of the money now being paid by the policy-holder or the annuitant.
This means the notion is like ” You pay Us now and We will pay you back immediately for the rest of the life “
There are two types of annuity Immediate Annuity and Deferred Annuity. If these terms are new to you, you can check the below link for getting a detailed idea on these two terms.
LIC Jeevan Akshay is a single payment immediate annuity plan where the pension amount starts just after one month from the purchase of the annuity. So, technically this LIC Jeevan Akshay Plan is best suited for senior citizens who want a guaranteed regular income after their retirement.
Features of LIC Jeevan Akshay VII Plan 857
The LIC Jeevan Akshay is one of the most popular annuity cum pension plans for its following salient features. The features are mentioned below.
- Immediate Annuity Plan: LIC Jeevan Akshay VII Plan is an immediate annuity plan. This means the annuitant starts receiving pension just after one month from the purchase of the annuity plan.
- Single Premium: It a single premium non linked annuity plan where one can enjoy the annuity income for life time.
- Different payout options: This Jeevan Akshay VII plan offers various payout option so that the annuitant(Investor) may choose the pension payout interval such as monthly, quarterly, half-yearly or annually.
- Guaranteed annuity payments: The most important feature of this plan is that the annuity rates are guaranteed till the death of the annuitant. The annuity rate is fixed at the inception of the policy.
- No Medical Check-up: As per the terms and conditions of this plan, no medical examination is required to purchase this annuity plan.
- Lump-sum payment: Since this is an immediate annuity plan, the annuitant has to pay a lump sum amount to buy this annuity plan.
- Purchase Price: For an online annuity purchaser, the minimum purchase price is Rs.1.50 Lakh and for the offline purchaser, the minimum amount is Rs.1.00 Lakh only.
- Maximum amount: There is no maximum purchase price specified by this plan. One can buy this annuity plan for an unlimited amount.
- Single Life /Joint Life: This annuity option is single life or joint life plan. This means it can be bought joint life annuity with any lineal descendant/ascendant of a family i.e. Grandparent, Parent, Children, Grandchildren or spouse or siblings.
- Loan facility: This annuity plan provides loan facility at a time after three months from the date of issuance of the policy or after the free lock-in period which one is later.
10 Options available under LIC Jeevan Akshay VII Plan
LIC Jeevan Akshay VII Plan 857 is available with 10 different options.
- Option A: The annuity is payable at a uniform rate for the whole life of the annuitant.
- Option B: The annuity is payable for 5 years first and thereafter payable for rest of the life of the annuitant.
- Option C: The annuity is payable for 10 years first and thereafter payable for rest of the life of the annuitant.
- Option D: The annuity is payable for 15 years first and thereafter payable for rest of the life of the annuitant.
- Option E:The annuity is payable for 20 years first and thereafter payable for rest of the life of the annuitant.
- Option F: Annuity for a lifetime period with the return of purchase price on death of the annuitant.
- Option G: The annuity is payable for a lifetime with increasing at a simple rate of 3% p.a.
- Option H: Annuity for a lifetime with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
- Option I: Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
- Option J: The annuity is payable for a lifetime with 100% annuity payable to spouse on the death of annuitant with ROC on the death of the Last Survivor.
|Annuity Option||Details of Annuity Plan with different payouts|
|A||Immediate Annuity for life.|
|B||Immediate Annuity with a guaranteed period of 5 years and life thereafter.|
|C||Immediate Annuity with a guaranteed period of 10 years and life thereafter.|
|D||Immediate Annuity with a guaranteed period of 15 years and life thereafter.|
|E||Immediate Annuity with a guaranteed period of 20 years and life thereafter.|
|F||Immediate Annuity for life with return of purchase price|
|G||Immediate Annuity for life increasing at a simple rate of 3% p.a.|
|H||Joint Life Immediate Annuity for life with a provision for 50% of the annuity to the Secondary Annuitant on the death of the Primary Annuitant.|
|I||Joint Life Immediate Annuity for life with a provision for 100% of the annuity payable as long as one of the Annuitant survives|
|J||Joint Life Immediate Annuity for life with a provision for 100% of the annuity payable as long as one of the Annuitant survives and return of Purchase Price on death of last survivor|
Eligibility Criteria for LIC Jeevan Akshay VII Plan 857 :
|Minimum Entry Age||30 Years|
|Maximum Entry Age||100 Years for Option F only|
|Maximum Entry Age||85 Years except for Plan F|
|Policy Term||Till the death of the Policy Holder|
|Purchase Option||Online & Offline|
Minimum Pension Amount for LIC Jeevan Akshay VII Plan 857 :
|Policy Term||Till the death of the Policy Holder|
|Policy Purchase Option||Online & Offline|
|Minimum Purchase Price||Rs.1,00,000/- (Single Premium)|
|Maximum Purchase Price||No Limit|
|Minimum Pension Amount||Monthly-Rs.1,000/- Quarterly-Rs.3,000/-, |
Half Yearly-Rs.6,000/– Annually-Rs.12,000/-
|Annuity Rates||It depends on the age of the annuitant and also the plan option he opts in|
|Applicable GST||1.80% on Purchase Price|
|Rebate||2% if the policy is bought online|
Surrender Value under LIC Jeevan Akshay VII Plan 857 :
Primarily, this policy is not meant for surrendering as it offers annuity payment for the life of the annuitant under 8 different payout options.
However, this policy can be surrendered after the expiry of the 3 months from the policy issuance date or the expiry of the free-look period, which one is later only for the following 2 options under this Jeevan Akshay VII plan.
Surrender of LIC Jeevan Akshay Plan VII is available under the following two annuity options only:
Option F: Immediate Annuity for life with return of Purchase Price. and
Option J: Joint Life Immediate Annuity for life with a provision for 100% of the annuity payable as long as one of the Annuitant survives and return of purchase price on the death of the last survivor.
If the chosen annuity option is other than those specified above, surrender of the policy shall not be allowed. On the payment of the surrender value, the policy shall terminate and all other benefits shall cease to be given.
The amount of immediate annuity payable under different LIC Jeevan Akshay VII Plan options for the purchase price of ₹10 Lakh annually is as under:
Is LIC Jeevan Akshay VII Plan for senior citizens?
Technically this pension plan is available for investors aged between 30 to 85 years. So, anyone belonging to this age group can buy this policy.
But this policy is best suited for senior citizens who seek regular income post-retirement. LIC Jeevan Akshay 7 Plan offers a guaranteed upfront return. Income from Fixed Deposits, Recurring Deposits, POMIS is decreasing substantially at a very fast pace.
It is becoming difficult indeed for the senior citizens who live on bank interests post-retirement for their daily livings. So, getting a pension plan which offer guaranteed income at a constant rate for the whole life is really worth it.
In this part, this policy is way ahead from other available pension plans in India. The annuity income is guaranteed till the death of the policy-holder and even after his death, his wife would continue to receive such annuity income till her lifetime.
Other pension plans lack this lifetime guaranteed pension feature. We have seen the reducing interest rates for Senior Citizen Savings Scheme(SCSS) and Pradhan Mantri Vaya Vandana Yojana(PMVVY), where the interest rates have decreased substantially.
You may check and compare below pension plans:
Therefore, a single premium lifetime guaranteed pension plan that offers income security till the death of the policy buyer is really appreciating and best-suited pension plan for the senior citizens at the current scenario.
So, this plan can be purchased by the senior citizens in addition to any other pension plans without being hesitant by payment of a lump sum amount to the LICI.
Is LIC Jeevan Akshay a good policy?
Undoubtedly this LIC Jeevan Akshay plan is a good policy. There are many reasons for this policy being ahead of the herd, especially for the retired persons.
As this policy provides guarantee of the income upfront at the time of buying the policy as per the chosen options. Jeevan Akshay ensures that the annuity payment is made at a constant rate from the first month of the policy till the death of the annuitant.
The annuity rate under this plan varies across 10 different payout options. But ideally, the annuity rate ranges from 5.5% to 6.75% annually.
But this plan is not suitable for investors who are below 55 years of age. Because for a long term investment horizon, guaranteed income plana can not create wealth for you.
If your investment tenure i.e. for the purpose you are investing is more than 5 years away, you can consider investing in different equity mutual funds depending upon your risk appetite.
I can say that this policy is an ideal one for those investors who opt for regular guaranteed income. Further, this is an immediate annuity plan. But not suitable for those who want to create long term wealth.
Is LIC Jeevan Akshay closed?
Yes LIC Jeevan Akshay VI plan has been closed from December 2017. But Life Insurance Corporation of India has reintroduced this annuity plan w.e.f 25.08.2020 in form of Is LIC Jeevan Akshay VII plan.
So, technically LIC Jeevan Akshay has not been closed only Jeevan Akshay VI plan has been withdrawn and Jeevan Akshay VII plan has just been reintroduced.
Can I surrender Jeevan Akshay policy?
Yes, you can surrender only the plans that offer a return of premium option. There is no surrender value for the plan that doesn’t have the return of purchase price option.
Option F Plan: Annuity for a lifetime period with the return of purchase price on death of the annuitant. This policy can be surrendered at the death of the policy buyer.
Option J Plan: The annuity is payable for a lifetime with 100% annuity payable to spouse on the death of annuitant with ROC on the death of the Last Survivor. This plan allows surrendering the policy with return of premium.