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LIC Jeevan Akshay VII Plan: Top Benefits, Key Features & Riders

Introduction on LIC Jeevan Akshay VII

Retirement is a bigger phase of a person’s life and with it, a lot of things change. One of them is regular income that controls the day-to-day events of life and to keep it going post-retirement an annuity plan is the best. Life Insurance Corporation of India popularly known as LIC has been serving the nation for over 6 decades now. The company keeps on introducing new policies regularly to keep their clients happy.  LIC Jeevan Akshay 7 is a new, individual, non-linked immediate annuity plan that offers 10 annuity options to its clients to choose from.

LIC Jeevan Akshay VII plan offers guaranteed annuities that are paid lifetime to the annuitant. Here are the following options annuitants can choose from :

  • Option A: Immediate lifetime annuity
  • Option B: Annuity that is immediate and comes with a certain tenure of 5 years and then it continues as long as the annuitant is alive. 
  • Option C:  Annuity that is immediate and comes with a certain tenure of 10 years and then it continues as long as the annuitant is alive. 
  • Option D: Annuity that is immediate and comes with a certain tenure of 15 years and then it continues as long as the annuitant is alive. 
  • Option E: Annuity that is immediate and comes with a certain tenure of 20 years and then it continues as long as the annuitant is alive. 
  • Option F: Immediate lifetime annuity that offers policy purchase price return.
  • Option G: Immediate lifetime annuity with an incremental rate of 3% p.a.
  • Option H: Immediate annuity for joint life offering 50% of annuity transfer to the secondary annuitant in case of the primary annuitant’s death.
  • Option I: Immediate annuity for joint life offering 100% of annuity for lifetime Until the last annuitant survives
  • Option J: Immediate annuity for joint life offering 100% of annuity for lifetime until the last annuitant survives. Also includes the provision of return of policy purchase price after the death of the last survivor.

Eligibility criteria of LIC Jeevan Akshay VII plan

Entry AgeMinimum: 30 yearsMaximum: 85 years for all Options except Option F and 100 years for Option F
Policy purchase priceMinimum: INR 1 lakhMaximum: No limit
Minimum annuity amountMonthly: INR 1,000 per monthQuarterly: INR 3,000 per quarterSemi-annually: INR 6,000 per 6 monthsAnnually: INR 12,000 per year
Payment modes Annually, semi-annually, quarterly and monthly

Benefits of  LIC Jeevan Akshay VII

Following are the pension benefits offered under LIC Jeevan Akshay VII for the options selected:

Annuity OptionType of AnnuityBenefits
Option AImmediate Annuity for the single annuitantThe annuitant will receive an annuity as long as he is aliveThe annuity payment will automatically cease upon the death of the annuitant and nothing else shall be payable to the nominee.
Options B (5 years), Option C (10 years), Option D (15 years), Option E (20 years)Annuity Certain for 5, 10 15, or 20 years for the single annuitantThe annuitant will receive an annuity as long as he is alive with a minimum guaranteed tenure for the chosen period or 5, 10, 15, or 20 yearsHowever, if the annuitant happens to die before the certain chosen period is over, the nominee would receive the annuity on his behalfThe annuity payment will automatically cease upon the death of the annuitant after the guaranteed period and nothing else shall be payable.
Option FImmediate Annuity for single annuitant with return of purchase priceThe annuitant will receive an annuity as long as he is aliveAfter the death of the annuitant, the purchase price would be paid to the nominee as a death benefit and the policy would terminate.
Option GIncreasing Annuity @ 3% p.a.The annuitant will receive an annuity as long as he is alive. However, the annuity amount would increase by a rate of 3% per annum.The annuity payment will automatically cease upon the death of the annuitant and nothing else shall be payable.
Option HJoint Life Annuity with 50% annuity payment to the secondary annuitantThe primary annuitant will receive an annuity as long as he is aliveAfter the death of the primary annuitant, 50% of the annuity shall be continued to be paid to the surviving secondary annuitant.However, after both the primary and the secondary annuitant dies, the annuity payment would stop and nothing would be payable thereafter.In case the secondary annuitant passes away before the primary annuitant, the latter will keep on receiving regular annuity till the death of the annuitant and then the policy would terminate.
Option IJoint Life Annuity with 100% annuity payment to the secondary annuitantThe primary annuitant will receive an annuity as long as he is aliveAfter the death of the primary annuitant, 100% of the annuity shall be continued to be paid to the surviving secondary annuitant.However, after both the primary and the secondary annuitant dies, the annuity payment would stop and nothing would be payable thereafter.In case the secondary annuitant passes away before the primary annuitant, the latter will keep on receiving regular annuity till the death of the annuitant and then the policy would terminate.
Option JJoint Life Annuity with 100% annuity payment to secondary annuitant and Return of Purchase priceThe primary annuitant will receive an annuity as long as he is aliveAfter the death of the primary annuitant, 100% of the annuity shall be continued to be paid to the surviving secondary annuitant.However, after both the primary and the secondary annuitant dies, the annuity payment would stop and the purchase price would be paid to the nominee as Death Benefit and the policy would terminate.

Features of  LIC Jeevan Akshay VII

  • Multiple annuity options are offered to the policyholder, he can choose the plan option that best suits his requirements 
  • Under Annuity Options F and J, the death benefit can be received in any of the following ways:
    • Lumpsum
      The entire purchase price would be payable to the appointed nominee as a lump sum
    • Annuitisation
      The death benefit that is payable is utilized to buy an Immediate Annuity from LIC. Under this option, the benefit amount can be opted as a full or part payout, at the time of death. The payments depend on the age of the annuitant as well the option chosen.
  • An immediate annuity that can start as early as the following month
  • LIC Jeevan Akshay VII is a single premium plan
  • Individuals who are over 30 years and have completed 100 years can opt for this plan
  • Under a few annuity options, the policy can be surrendered anytime after 3 months
  • No medical tests are required to purchase this policy
  • Loan facility can be availed once 3 policy months are complete
  • Incentives can also be availed for a higher purchase price
  • Depending on your convenience, the plan can be purchased online or offline
  • Online discount can be availed up to 2% of the premium to be paid
  • There is no maturity benefit in this plan.

Policy details of  LIC Jeevan Akshay VII

LIC Jeevan Akshay VII plan is an immediate annuity plan. The plan offers to pay an annuity to the annuitant all through his life, based on the annuity option he has chosen. Being a single-premium individual immediate annuity scheme, the lump sum amount that you pay towards the policy is then paid out to you in instalments for as long as you may live according to the annuity option chosen.

As mentioned above, there are 10 annuity options that the individual can choose from. Right at the beginning of the policy, the annuity rates are explained to the annuitant. 

Provide a section on the working of LIC Jeevan Akshay VII Plan:

Let us understand the working of the  LIC Jeevan Akshay VII plan with the help of this illustration. 

Ravikant Sharma is a 60-year-old man. He purchases LIC Jeevan Akshay 7 plan with the purchase price of INR 2 lakhs.

  • Mode: Single Premium
  • Basic Premium: INR 2,00,000
  • GST at 1.8%: INR 3,600
  • Total Premium: INR 2,03,600

Let us take a look at the Pension Options that Ravikant can opt for:

Pension OptionPension 
Option AINR 15,520
Option BINR 15,400
Option CINR 15,100
Option DINR 14,700
Option EINR 14,180
Option FINR 10,420
Option GINR 12,180
Option HINR 14,500
Option IINR 13,600
Option JINR 10,360

* These premiums are indicative only and subject to change at any point of time.

Riders in LIC Jeevan Akshay VII plan

There are no riders available under the LIC Jeevan Akshay 7 plan.

Documents required for LIC Jeevan Akshay VII plan

  • For Making a Purchase
    The purchase of the policy can be done both online or offline. There is minimal documentation required at the time of policy purchase. Apart from your ID proof, only your salary statement may be required. 
  • For Making a ClaimOn the sudden demise of the annuitant, the assigned nominee will have to inform the company about the same in a period of 90 days from the death. The following documents will be required in the process:
    • Policy documents
    • Claim form
    • Death certificate
    • NEFT Mandate
    • Proof of age
    • Proof of death

Tax implications in  LIC Jeevan Akshay VII plan

  • On the premium paid
    When you purchase the LIC Jeevan Akshay VII plan, the premium that is paid is eligible as a deduction under Section 80CCC of the Income Tax Act, 1961. This deduction can be availed up to INR 1.5 lakhs.
  • On the annuity received
    Period payments such as a pension, under an annuity plan, are taxable and are not exempted under standard deductions. The tax you need to pay, therefore, will depend on the tax slab you fall in and the tax regime you select.

Surrender LIC Jeevan Akshay 7 plan

The surrender value is the amount that is paid to the policyholder if he decides to surrender the policy. Under the LIC’s Jeevan Akshay plan, after a period of 3 months, you will be allowed to surrender the policy. However, you can surrender your policy, only in the case of the following options. Apart from these 2 options, surrendering the policy is not allowed:

Option F: Immediate Annuity for life with return of Purchase Price

Option J: Immediate annuity for joint life offering 100% of annuity for lifetime until the annuitant survives.

There are two ways to estimate the surrender value. It would be the lower of 

  1. 95% of the purchase price OR
  2. F1 X Equivalent amount of annuity that is payable in the yearly mode + F2 X the Purchase Price) – Annuity installments that are paid under the policy which pertains to the surrender policy year up to the date of surrenderF1= Annuity Factor on the date of surrender and
    F2= Pure Term Assurance Factor on the date of surrender.

Before you Buy

LIC’s Jeevan Akshay plan is a plan worth considering. However, before you buy the policy, you can visit www.turtlemint.com to understand the plan further. Turtlemint, thus, helps you in making a well-informed decision. 

Conclusion

For all Indians when it comes to an insurance policy, LIC’s name pops out anonymously and this is the amount of trust this company has gained over years. With over 2,000 branches and 14 lakh agents, LIC takes care of around 250 million lives in the country. 

LIC’s Jeevan Akshay plan is a new addition to the pension plans offered by LIC. This plan comes with numerous annuity options for the annuitant to choose from according to his requirements and also offers various benefits including a free look period, rebates, and annuity settlement options. LIC Jeevan Akshay 7 is an affordable annuity plan and can be very beneficial for all elderly people who plan to secure their lives post their retirement.

FAQ’s

The policy can be surrendered anytime after the policy has completed a three-month period from its date of commencement or after the free-look period for the policy is over.

A free look period of 15 days is offered to the individual who had purchased the policy offline. While a 30 day free look period is offered to the individuals who had bought the policy through online mode.

The interest offered by LIC’s Jeevan Akshay Plan is 3% per annum.

You get a discount in the form of a higher pension if you opt for purchasing the policy online.

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