Jeevan Akshay VI – Pension plan from LIC – A reference guide
Jeevan Akshay VI is the flag ship pension product of LIC of India. Before going deep into the features of the plan it is better to getting familiar with some terms which we are going to use in this article. On the other hand if you are familiar with the Jeevan Aksahy VI plan, you can open premium and benefit calculator of Jeevan Akshay plan.
What is an Annuity?
An annuity is a series of equal payments at regular intervals. The interval can vary depending on the scheme namely Yearly, Half Yearly, Monthly etc. So Annuity, in simple terms, means Pension.
Types of Annuities
Generally we come across two types of annuities.
a) Immediate Annuity – Annuity starts immediately after the premium payment.
b) Deferred annuity – Annuity will start only after a deferment period
Immediate Annuity Vs Deferred AnnuityJeevan Akshay VI – A brief introduction
Jeevan Akshay VI is an immediate annuity plan where premium is paid as a single lump sum payment and Annuity or the pension will start immediately after the completion of one annuity mode period. For example, if monthly annuity mode is selected the pension will start from next month on wards and in case of yearly mode pension will start from next year.
The greatest advantage of Jeevan Akshay VI is that, the annuity rate at which pension starts will be protected through out your life. The fluctuations in the interest rates, likely to see in the market will not affect your future pension amount.
Jeevan Akshay VI – Premium and Benefit calculator(Online)
You can use the premium and benefit calculator for Jeevan Akshay plan to get a clear idea on the premium and benefit details of Jeevan Akshay plan. This calculator can give you all details including the pension amount available for various pension options.
Open Jeevan Akshay VI – Premium and Benefit calculator
Who can buy Jeevan Akshay VI ?
Anybody whose age is between 30 years and 85 years can purchase this policy, irrespective of the health conditions. No Medical Examination is required for this plan.
How much you should pay for Jeevan Akshay VI ?
Minimum sum assured of Jeevan Akshay VI is one lakh where there is no higher limit for the premium. If you purchase 2.5 lakh or more you will receive higher annuity. There is no higher ceiling for this plan.
How will you get pension from Jeevan Akshay VI ?
Pension can be obtained as Yearly, Half yearly, Quarterly, or monthly instalments. The rate of pension varies depending on the instalment mode. Naturally the rate is higher for yearly mode as the payment is done only on completion of the mode period.
Annuity options available for Jeevan Akshay VI
Several Annuity options are available in Jeevan Akshay VI and the suitable option has to be selected at the time of purchase. Change in pension option later is not allowed.
- Annuity payable for life at a uniform rate.
- Annuity payable for 5, 10, 15 or 20 years certain and thereafter as long as the annuitant is alive.
- Annuity for life with return of purchase price on death of the annuitant.
- Annuity payable for life increasing at a simple rate of 3% p.a.
- Annuity for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
- Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
- Annuity for life with a provision of 100% of the annuity payable to spouse during his/ her life time on death of annuitant. The purchase price will be returned on the death of last survivor.
How to decide on the annuity option for Jeevan Akshay VI
Hover the mouse above the chart shown above to get the pension values.
The general tendency in selecting the annuity option is to go for Annuity for life with return of purchase price. But you can consider other options as well, depending on your requirements. If you are not having any dependants for whom death proceedings has to be transferred, Annuity for life is the better option, as you will receive highest pension rate. Just go through the illustration given above to get a clear idea on the pension rates available for different options.
How to purchase Jeevan Akshay VI
Jeevan Akshay VI can be purchased from any branch office or through online mode. For online mode of purchase an additional 1% increase in returns will be available.
Surrender facility of Jeevan Akshay VI
Surrender facility has been introduced in the plan recently. If the annuitant is diagnosed as suffering from any of the following critical illnesses, surrender of the plan is allowed. Surrender is allowed only in Pension for life with return of purchase price option.
- Cancer of specified severity
- Myocardial infraction
- Open Chest CABG
- Open Heart Replacement or Repair of Heart Valves
- Kidney Failure requiring regular dialysis
- Stroke resulting in Permanent Symptoms
- Major Organ/Bone Marrow Transplant
- Permanent Paralysis of Limbs
- Motor Neuron Disease with Permanent Symptoms
- Multiple Sclerosis with Persisting Symptoms
- Angioplasty
- Benign Brain Tumour
- Blindness
- Deafness
- End stage Lung failure
- End stage liver failure
- Loss of speech
- Loss of Limbs
- Major Head Trauma
- Primary(Idiopathic)Pulmonary Hypertension
- Third Degree Burns
Tax implications of Jeevan Akshay VI
Premium paid under the policy is eligible for tax rebate under section 80 C while the pension received from the policy is taxable.
Read more on the income tax and how to calculate your tax.
We recommend you to read an article on Income Tax return e-filing to understand the complete process in a simple way.
Why you should consider Jeevan Akshay VI
The greatest advantage of Jeevan Akshay VI is that this plan can protect you from the trend of dwindling interest rates. The recent changes in national and global economic scenarios reiterates that this trend is likely to continue in the future also. So, even if you feels that the interest rate offered by the scheme is not attractive, your guaranteed rates of pension may become attractive once the interest rates go down.
Negative factors of Jeevan Akshay VI to be considered
One Negative factor to be considered while purchasing this plan is that, the pension you receive is taxable. So if you are now in the tax bracket, the effective interest you receive will get reduced depending on your income slab.
Read more on National Pension System (NPS) if you are looking for a pension scheme sponsored by Govt of India.
Anish L J is a ‘Financial Planner’ and member of Chartered Insurance Institute(CII), London and Insurance Institute of India. He is also a finance, insurance and software consultant. He thoroughly follows the developments in finance, insurance, and other related sectors.
For 1 lakhs investment for annuity option 7, done online ,how much is the interest rate (or how much do one get as monthly pension)
Annuity rates will change depending on the age of the person purchasing annuity. Higher the age annuity rate will be more. In order to calculate pension rate please furnish the age also.
Thank you.
what is the difference between guaranteed for 5 years and for life? pension is lower for “for t years” than “for life”
Dear Krishna,
Pension guaranteed for 5 years means, even if the death of the life assured occurs before five years, pension is guaranteed for 5 years and shall be paid to the nominee. If he/she is opting for pension for life he will get pension only up to his death. Pension guaranteed for 5 years actually means ‘pension guaranteed for five years and life there after’. So pension is available for his life even if he lives beyond 5 years.
Naturally pension guaranteed for a period is lower.
Anish thank you so much for your quick response. Actually annuity is guaranteed until death in all cases, right.
So for an assurance to pay to nominee just for 5 years only, should annuity amount be lower than other cases.
In other words expectation of people dying within 5 years of buying an annuity is pretty high for LIC?
If i invest 100000 RS in jivan Akshay VI in one or two year for any medical reason i want to withdraw from the plan how much money I can get it back.
You can withdraw from Jeevan Akshay plan, only if you have taken the annuity option with the return of purchase price. Further, the disease should be one among the listed critical illnesses. On satisfying these conditions you will be returned the enitre purchase price less the GST or service tax paid at the time of purchase of the plan.