Life Insurance Corporation of India (LIC) is one of the most trusted insurance companies in the country. Crores of people have invested in this company's policy. People also have this trust because it is run by the government. In such a situation, people do not worry that their hard earned and thick earnings will not drown.
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Often, employed people worry about how the pension will be arranged after the job. At the same time, this concern is most in the minds of those who have reached the brink of retirement. Keeping these concerns in mind, LIC has designed a pension policy Jeevan Shanti which is quite popular among Youth and Senior Citizen due to its unique features. By investing in it, customers can avail instant pension, while they can also enjoy the benefits of pension later. This is the biggest feature of this policy. You can get a regular amount (pension) at fixed intervals of lifetime by paying a single premium. While investing, customers have two options to choose the pension. In which the first is intermediate and the second is deferred annuity. The intermediate means the pension immediately after the investment, while the deferred annuity means payment of pension after some time (1 year to 20 years).
While taking this policy, the policy holder has two options regarding pension. First intermediate second deferred annuity. This is a good way to get a certain amount at the time of retirement. Both plans have different features and benefits.
Immediate means that you start taking pension soon after taking the policy. At the same time, deferred annuity means that you start taking pension for some time (5, 10, 15, 20 years) after taking the policy. In the intermediate policy, you get 7 types of options. At the same time, two options are available in Defford. With this policy, customers also get the facility of loan. Also, you can surrender it anytime after 3 months.
You can get pension every month for a lifetime by giving a single installment in LIC's Jeevan Shanti Policy. Under different pension plans at intervals of 5 to 20 years, Jeevan Shanti Plan has the option of pension on your deposit at 8.79 to 21.6 percent annually.
It will be necessary to invest at least 1.5 lakh rupees under the Jeevan Shanti Plan. There is no limit on the maximum amount. You can deposit 5 lakhs or 10 lakhs or even more as per your convenience.
You must be at least 30 years old to take the policy. At the same time, if the pension is required immediately, then the maximum age should be 85 years. The maximum age for the deferment plan should be 79 years.
In this plan of LIC, you have to invest only once and your guaranteed income will continue throughout your life. You can also take the policy jointly with your parents or siblings. Apart from this, customers can select annuity options according to their needs and circumstances. This is a single premium plan, where once you invest, you will start getting pension, which will get lifetime.
In this policy you get many options for investing. If you want, you can start taking pension immediately or you can also take it after some time. If you join the policy in 30 years, you can get pension immediately or you can take it for 5, 10, 15 or 20 years.
Suppose a 50-year-old person chooses option 'A' i.e. pension option per month. With this, he chooses the 10 lakh even assured option. So he will have to pay a premium of 10 lakh 18 thousand rupees. After this investment, they will get a pension of Rs 5,617 per month. This pension will be received as long as the policy holder remains alive. At the same time, this pension will stop coming after death.
You can take this policy both online or offline. For offline you will get this policy through an agent, while if you choose the option of online, then you can take this policy yourself by going to the Life Insurance Corporation website.
LIC’s Jeevan Shanti Plan is a non-linked, non-participating, single premium annuity plan wherein the Policyholder has an option to choose an Immediate Annuity or Deferred Annuity. This plan shall be allowed to all lives including third gender. The annuity rates are guaranteed at the inception of the policy for both Immediate and Deferred Annuity. Various annuity options and mode of annuity payment are available under the Plan. The option once selected cannot be changed. This plan can be purchased offline as well as online.
| # | Age at Entry | Purchase Price | Mode of Premium |
|---|---|---|---|
| 1 | 30 years last birthday for both immediate and deferred | Rs. 1,50,000/- | Single Premium Only |
| 2 | Under immediate Annuity Option I & J, if the secondary annuitant is a handicapped dependant, the annuity rates for combination of ages where secondary annuitant is in the range of 0-29 years are available. |
Rs. 50,000/- | Single Premium Only |
| 3 | Immediate annuity :- 100 years LBD for annuity option F 85 years LBD for all annuity options A to J other than annuity option F. |
Rs. 1,50,000/- | Single Premium Only |
| 4 | 2) Deferred Annuity:- 79 years LBD |
Rs. 1,50,000/- | Single Premium Only |
a. If the plan has been purchased for the benefit of handicapped dependant (Divyangjan) life as mentioned below, the proposal shall be allowed without any restriction on minimum annuity and the minimum Purchase Price under such cases shall be Rs. 50,000/-. In such cases the annuity rates given under this plan shall be applicable without any Reduction
b. If the plan has been purchased by the subscribers of the National Pension System regulated by the Pension Fund Regulatory and Development Authority (PFRDA) as mentioned below, there shall not be any restriction on minimum annuity and the minimum Purchase Price under such cases shall be Rs. 50,000/-. In such cases the annuity rates given under this plan shall be applicable with Reduction Factor as specified below.
c. For all the policies under existing Individual Deferred Annuity / Pension plans and Group Superannuation Schemes as mentioned below, there shall not be any restriction on minimum annuity and the minimum Purchase Price:
• The nominee has to compulsorily purchase an immediate annuity on death of the life assured/member of the scheme.
• Annuitisation is compulsory in case of surrender of the policy by the life assured.
• On vesting of Group Superannuation Schemes and Individual Deferred Annuity / Pension policies where annuity rates are not guaranteed.
No medical examination is required under the plan.
Standard age proof only will be accepted under this plan.
Chief Manager, Manager (Administration), Sr. Branch Manager/Branch Manager/ Administrative Officer in a Branch Office/ Satellite Office can underwrite all proposals to the full extent. However, proposals under Deferred Annuity, if referred to Divisional Office for any reference may be underwritten at Divisional Office.
KYC/ AML norms are to be strictly followed, as per KYC/AML policy.
NEFT mandate from the proposer for direct credit of the annuity amount to the bank account shall be compulsorily obtained for both online and offline sales at proposal stage.
Following underwriting rules will be applicable for proposals under Deferred Annuity option in addition to the above stated underwriting rules.
a) Proposals under Single Life Deferred Annuity Option:
Deferment period should be restricted to maximum 10 years or immediate annuity may be offered if desired by proponent, in following cases:
i) If the answer to the question 7 (II) of the proposal form for Annuitant/ Primary Annuitant includes any of the disease listed in the Annexure A to this circular,
ii) If the Annuitant/ Primary Annuitant/ is physically handicapped, having deformity other than PH Group I or II as per point 11 and 12 of Circular Ref: CO/NB&R/184/2018 dated 11th May, 2018.
iii) BMI of Annuitant/ Primary Annuitant is 45 and above.
b) Proposals under Joint Life Deferred Annuity Option:
The restriction of maximum deferment of 10 years or Immediate Annuity option, if desired by proponent, will be applicable only if both the lives under joint life annuity option come under any of the three conditions stated in point 6 a).
Annexure A :- List of Diseases
1. Open and closed Heart surgery including CABG.
2. Cardiac
The Immediate Annuity Option under the plan is allowed to NRIs residing in any of the groups without charging any residence extra. The Deferred Annuity Option under the plan is allowed to NRIs residing in Residence Group V only.
The plan is not available to Foreign Nationals of Indian Origin. However, the proposals from FNIOs having valid Overseas Citizens of India (OCI) card, may be referred to Central Office (NB&R) Dept., for consideration of immediate annuity on the life of proponent, on case to case basis. Such proposals may be submitted along with copy of valid Passport, copy of valid OCI card, MHR by Senior DM in letter format recommending the proposal, NRI Questionnaire, KYC and AML requirements, and other relevant documents. Mail order business will not be considered under these proposals.
| Annuity Options Available | Annuity Description |
|---|---|
| Option A | Immediate Annuity for life |
| Option B | Immediate Annuity with guaranteed period of 5 years and life thereafter |
| Option C | Immediate Annuity with guaranteed period of 10 years and life thereafter |
| Option D | Immediate Annuity with guaranteed period of 15 years and life thereafter |
| Option E | Immediate Annuity with guaranteed period of 20 years and life thereafter |
| Option F | Immediate Annuity for life with return of Purchase Price |
| Option G | Immediate Annuity for life increasing at a simple rate of 3% p.a. |
| Option H | Joint Life Immediate Annuity for life with a provision for 50% of the annuity to the Secondary Annuitant on death of the Primary Annuitant. |
| Option I | Joint Life Immediate Annuity for life with a provision for 100% of the annuity payable as long as one of the Annuitant survives. |
| 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 death of last survivor |
| Annuity Options | Annuity Description |
|---|---|
| Option 1 | Deferred annuity for Single life |
| Option 2 | Deferred annuity for Joint life |
Joint Life: The joint life annuity can be taken between any lineal descendant/ascendant of a family (i.e. Grandparent, Parent, Children, Grandchildren) or spouse or siblings.
Mode of annuity payments allowable under Immediate and Deferred annuity is yearly, half-yearly, quarterly or monthly installments. The Annuity shall be payable in arrears i.e. the annuity payment shall be after 1 year, 6 months, 3 months and 1 month from the date of commencement of policy for Immediate Annuity options or date of vesting for Deferred Annuity options depending on whether the mode of annuity payment is Yearly, Half yearly, Quarterly and Monthly respectively.
Under Deferred Annuity, change in mode of annuity payments during the deferment period is allowed. Any change in mode of annuity payment will have to be intimated to the Corporation at least 3 months before the end of deferment period. Once the annuity payments starts, under both Immediate and Deferred Annuity, any change in mode of annuity payment shall not be allowed.
Under Deferred annuity option, if user has selected any mode of payment of annuity other than single, then from basic per annum annuity rate, the reduction by way of decrease in annuity rate shall be applicable. The reduction is as under:
| Mode | Reduction in annuity rate |
|---|---|
| Half-yearly | 2% |
| Quarterly | 3% |
| Monthly | 4% |
Guaranteed Additions per month = (Purchase Price * Annuity rate p.a. payable monthly) / 12 Where Annuity rate p.a. payable monthlyshall be equal to monthly tabular annuity rate (i.e. 96% * Tabular annuity rate p.a. payable yearly/1000) and shall depend on the age at entry of the annuitant(s) and the deferment period opted for.
Data for example:
Policy No:- .............., Date of commencement :- 1/10/2018, plan and term :- 850/20, single premium - 25,00,000, purchasee price will be 25 lakh, Age at entry for single life - 30 years LBD, Annuity option :- Deferred annuity for single life , mode of annuity - Yearly, Date of death :- 15/9/2038
First calculate annuity instalment for yearly mode of annuity.
The annuity factor for age at entry 30 years for deferment period 20 years will be 213.90 per 1000 purchase price. since mode of annuity payment is yearly, there will no reduction factor to be applied to annuity rate. Add incentive for higher purchase price i.e 2.45 for 25 lakh. The net annuity factor will be Rs. 213.90 + 2.45 = 216.35. multiply this annuity rate with thousands in purchase price. i.e 216.35 x 2500 = Rs. 540875
Now, calculate guaranteed addition per month
First calculate annuity rate p.a. payable monthly for age at entry 30 years and term 20 years.The yearly annuity rate is Rs. 213.90. Multiply reduction factor 4% to this annual rate. i.e 213.90 x 0.96 = 205.344. Monthly guaranteed addition for 25 lakh purchase price will be 205.344 x 25,00,000 / 1000 = Rs. 513360/12 = Rs. 42780
Completed duration of the policy as on date of death is ( 15/9/2038 - 1/10/2018) = 14 days 11 months and 19 years i.e 239 months. Hence accrued guaranteed addition for 239 months will be Rs. 42780 x 239 months = Rs.1,02,24,420.
| Annuity Option | Single/ Joint Life | Benefit payable on Survival |
|---|---|---|
| A | Single Life | Annuity payments will be made in arrears for as long as Annuitant is alive, as per the chosen mode of annuity payment. |
| B | Single Life | Annuity payments will be made in arrears for as long as Annuitant is alive, as per the chosen mode of annuity payment. |
| C | Single Life | Annuity payments will be made in arrears for as long as Annuitant is alive, as per the chosen mode of annuity payment. |
| D | Single Life | Annuity payments will be made in arrears for as long as Annuitant is alive, as per the chosen mode of annuity payment. |
| E | Single Life | Annuity payments will be made in arrears for as long as Annuitant is alive, as per the chosen mode of annuity payment |
| F | Single Life | Annuity payments will be made in arrears for as long as Annuitant is alive, as per the chosen mode of annuity payment. |
| G | Single Life | Annuity payments will be made in arrears for as long as Annuitant is alive, as per the chosen mode of annuity payment. The annuity payment will be increased by a simple rate of 3% per annum for each completed policy year. |
| H | Joint Life | The applicable annuity will be paid in arrears for as long as the Primary Annuitant and/or Secondary Annuitant is alive, as per the chosen mode of annuity payment. |
| I | Joint Life | The applicable annuity will be paid in arrears for as long as the Primary Annuitant and/or Secondary Annuitant is alive, as per the chosen mode of annuity payment. |
| J | Joint Life | The applicable annuity will be paid in arrears for as long as the Primary Annuitant and/or Secondary Annuitant is alive, as per the chosen mode of annuity payment. |
| Annuity Option | Single/ Joint Life | Benefit payable on Survival |
|---|---|---|
| 1 | Single Life | During deferment period: Nothing is payable during the deferment period. After deferment period:Annuity payments will be made in arrears as long as the Annuitant is alive, as per the chosen mode of annuity payment. |
| 2 | Joint Life | During deferment period:On the survival of the Primary Annuitant and/or Secondary Annuitant during the deferment period, nothing is payable. After deferment period:Annuity payments will be made in arrears as long as the Primary Annuitant and/or Secondary Annuitant is alive, as per the chosen mode of annuity payment. |
Note: The annuities are payable in arrear. In case of death any proportionate annuity from the date of last payment of annuity till date of death shall not be paid.
All the annuity options under Immediate Annuity shall be available to NPS subscriber. The NPSsubscribers include government employees, private companies and also those who have subscribed to NPS lite.
The existing default annuity option under NPS is “wherein the annuity contract shall provide for annuity for the subscriber and his or her spouse (if any) with provision for return of purchase price of the annuity and upon the demise of such subscriber, the annuity be re-issued to the family member in the order specified hereunder, at a premium rate prevalent at the time of purchase of such annuity by utilizing the purchase price required to be returned under the annuity contract (until all the family members in the order specified below are covered):
a) Living dependent mother of the deceased subscriber;
b) Living dependent father of the deceased subscriber.
After the coverage of all the family members specified above, the purchase price shall be returned to the surviving children of the subscriber and in the absence of children, the legal heirs of the subscriber, as may be applicable.”
If a Government Sector NPS subscriber purchases this plan as a default option, then Option J under Immediate Annuity shall be available to the subscriber whose spouse is surviving on the date of purchase. Option F under Immediate Annuity shall be available to the subscriber in the absence of his or her spouse. Thereafter on the death of subscriber and his or her spouse, the purchase price shall be used to purchase immediate annuity option F or J on the life of living dependent mother/father and shall be subject to the eligibility conditions of the annuity plan available at that time.
The default option applicable under this option shall be as per Pension Fund Regulatory and Development Authority (Exits and withdrawals Under the National Pension System) Regulations, 2015, as amended from time to time.
Any further instructions including applicable rates would be issued by Direct Marketing Department, Central Office.
If the Proposer has a handicapped dependant (Divyangjan), the plan can be purchased for the benefit of Divyangjan as nominee/annuitant, in following ways:
i. The Proposer can purchase Single Life Deferred Annuity (Option 1) or Single Life Immediate Annuity with Return of Purchase Price (Option F) on own life. In case of death of the Annuitant (Proposer), the Death Benefit shall compulsorily be utilized to purchase Immediate Annuity (as per option chosen by the Annuitant) on the life of the Divyangjan who would be the nominee.
ii. The Proposer can purchase Joint Life Immediate Annuity (Option I or J) with Divyangjan as Secondary Annuitant.
• The annuity payment to Divyangjan shall be paid subject to minimum Purchase Price of Rs. 50,000/- and irrespective of any limit on minimum annuity payment. The minimum age at entry restrictions as specified in Para 5 above shall not be applicable for the Divyangjan life.
• The Handicapped Dependant is a Person with Disabilities (Divyangjan) as defined below, who is the beneficiary under the policy and a relative of the Annuitant.
• For deciding eligible disability of Divyanjan as nominee/second annuitant as applicable reference is to be made to meaning of “Disability” as assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) [and includes “autism”, “cerebral palsy”, and “multiple disability” referred to in clauses (a), (c), and (h) of section 2 of the National Trust for welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999)] or any other applicable Act in this regard
Loan facility shall be available after completion of 1 policy year. Policy loan shall be allowed under the following annuity options only:
The maximum amount of loan that can be granted under the policy shall be such that the effective annual interest amount payable on loan does not exceed 50% of the annual annuity amount that shall be payable after the deferment period under the policy and shall be subject to maximum of 80% of Surrender Value. Interest on Loan during the deferment period shall be paid on compounding halfyearly basis.
In case if the loan is not repaid during the deferment period and if there is no default in the interest payment as of the end of deferment period, then Interest on the loan shall be recovered from annuity amount payable after the deferment period.
In case if the loan is not repaid during the deferment period and if there is a default in the interest payment as of the end of the deferment period, the difference of surrender value and the loan outstanding amount along with interest, if any, shall be payable to the Primary Annuitant / Secondary Annuitant and the policy shall be terminated.
During the deferment period, in the event of failure of payment of interest payment on the due dates and when the outstanding loan amount along with interest is to exceed the surrender value, the policy shall be forfeited to the Corporation. The difference of surrender value and the loan outstanding amount along with interest, if any, shall be payable to the Primary Annuitant / Secondary Annuitant and the policy shall be terminated.
The maximum amount of loan that can be granted under the policy shall be such that the effective annual interest amount payable on loan does not exceed 50% of the annual annuity amount payable under the policy and shall be subject to maximum of 80% of Surrender Value.
Loan interest will be recovered from annuity amount payable under the policy. The Loan interest will accrue as per the frequency of annuity payment under the policy and it will be due on the due date of annuity. The loan outstanding shall be recovered from the claim proceeds at the time of exit.
The rate of interest to be charged for the loan amount would be determined from time to time by the Corporation. Instructions regarding applicable interest rate would be issued by Actuarial Department, Central Office.
The policy can be surrendered at any time after three months from the completion of policy (i.e. 3 months from the Date of issuance of policy) or after expiry of the free-look period, whichever is later under the following annuity options only:
The policy shall be void if the Annuitant/Primary Annuitant/Secondary Annuitant (whether sane or insane) commits suicide at any time within 12 months from the date of commencement of risk, an amount which is higher of 100% of the Purchase Price paid or Surrender Value shall be payable. The Corporation will not entertain any other claim.
The policy shall be void if the Annuitant/Primary Annuitant/Secondary Annuitant (whether sane or insane) commits suicide at any time within 12 months from the date of commencement of risk, an amount which is higher of 80% of the Purchase Price paid or Surrender Value shall be payable. The Corporation will not entertain any other claim.
The normal documents which the claimant shall submit while lodging the claim in case of death of the Annuitant/Primary Annuitant/Secondary Annuitant shall be the claim form, as prescribed by the Corporation, accompanied with original policy document, NEFT mandate from the claimant for direct credit of the claim amount to the bank account, proof of title, proof of death, whichever is applicable, to the satisfaction of the Corporation.
Further, if the age is not admitted under the policy, the proof of age of the Annuitant shall also be submitted.
Within 90 days from the date of death, intimation of death along with death certificate must be notified in writing to the office of the Corporation where the policy is serviced. However delay in intimation of the claim by the claimant, if any, may be condoned by the Corporation, on merit, where delay is proved to be for reasons beyond his/her control.
Under all the annuity options where there is benefit payable on death i.e. Option F and Option J under Immediate Annuity and both the Options under Deferred Annuity, the Annuitant(s) will have to choose one of the following options for the payment of the death benefit to the nominee(s).The death claim amount shall then be paid to the nominee as per the option exercised by the Annuitant(s) and no alteration whatsoever shall be allowed to be made by the nominee(s). This option has to be exercised by Annuitant(s) at the proposal stage. However, this option can be subsequently modified by Annuitant(s) during his/her life while in currency of the policy.
Assignment as per Section 38 of the Insurance Act, 1938 as amended from time to time shall be allowed in favour of LIC of India only, if Annuitant opts for loan under the policy. However , as per circular no co/pd/110 dt 26/9/2018; Assignment of the policy as per section 38 of Insurance act 1938 shall be allowed.
This amendment states this annuity policy can be assigned not only to LIC for rasing loan against the policy but assignment can be registered as per new provisions of section 38 of insurance act.
Nomination by the holder of a policy of life assurance is required as per Section 39 of the Insurance Act, 1938, as amended from time to time.
The notice of nomination or change of nomination should be submitted for registration to the office of the Corporation, where the policy is serviced. In registering nomination the Corporation does not accept any responsibility or express any opinion as to its validity or legal effect.
If a policy holder is not satisfied with the “Terms and Conditions” of the policy, he/she may return the policy to the Corporation stating the reason of objections, within 15 days (30 days if this policy is purchased online) from the date of receipt of the policy.
The refund of premium to the Policyholder shall be subject to following deductions:
1. Stamp duty on policy;
2. Annuity paid, if any.
LIC Jeevan Shanti, Great Pension plan with whole life guaranteed pension for you or for joint life it may be immediate...
Posted by RAj Kumar on Saturday, 15 August 2020