LIC Jeevan Akshay VII Pension Plan: All You Need to Know
LIC Jeevan Akshay VII Pension Plan: All You Need to Know

LIC Jeevan Akshay VII Pension Plan: All You Need to Know

Posted on

LIC Jeevan Akshay VII pension plan (512N337V01), LIC plan No. 857, is the latest version of the classic immediate annuity plan, Jeevan Akshay of LIC of India, where a policyholder deposits single premium and opts one out of ten pension options to get guaranteed yearly, half-yearly, quarterly or monthly pension for lifetime. Immediate annuity means, if the policyholder chooses a monthly mode, the pension starts from next month. The annuity or pension amount depends upon age and selected option and it remains guaranteed for life. An example of Jeevan Akshay VII plan with all benefits has been illustrated in later part of the article.

Features and Eligibility Conditions

Minimum Age: 30 Years (Last Birthday) 

Maximum Age: 85 Years (Last Birthday) except option F and 100 years for option F. 

Minimum Purchase Price: Rs. 1,00,000 and subject to minimum pension 

Maximum Purchase Price: No Limit Minimum Pension: 12,000 (Yearly), 6000 (Half-yearly), 3000(Quarterly), 1000(Monthly) 

Joint Life: The policy can be taken between any two lineal descendent/ascendant of a family (like grandparent, parent, children, grandchildren) or spouse of siblings. 

Mode of Payments: Jeevan Akshay VII allows yearly, half-yearly, quarterly or monthly installments for payment of annuity, which means, if yearly mode is opted for, the annuity/pension will be available after 1 year of purchase.

Annuity (Pension) Options

LIC Jeevan Akshay VII comes with 10 options- from A to J, one option can be opted for by a policyholder as per his/her choice. All options are explained below. 

Option-A [Single Life]: Immediate Annuity for Life 

In this option guaranteed pension is provided as long as the policyholder is alive and in case of death of the policyholder, purchase price is not returned to the nominee and policy gets closed. 

Option-B [Single Life]: Immediate annuity for guaranteed period of 5 years and for life thereafter 

Guaranteed pension is paid for first 5 years either to policyholder himself or his nominee. Nominee gets the amount in case of death of the policyholder during a guaranteed period of 5 years. After 5 years, the policyholder gets pension as long as he is alive. In case of death of the policyholder, the purchase price is not returned to the nominee and the policy gets closed. 

Option-C [Single Life]: Immediate annuity for guaranteed period of 10 years and for life thereafter 

Guaranteed pension is paid for first 10 years either to policyholder himself or his nominee. Nominee gets the amount in case of death of the policyholder during a guaranteed period of 10 years. After 10 years, the policyholder gets a pension as long as he is alive. In case of death of the policyholder, the purchase price is not returned to the nominee and the policy gets closed. 

Option-D [Single Life]: Immediate annuity for guaranteed period of 15 years and for life thereafter 

Guaranteed pension is paid for first 15 years either to policyholder himself or his nominee. Nominee gets the amount in case of death of the policyholder during a guaranteed period of 15 years. After 15 years, the policyholder gets a pension as long as he is alive. In case of death of the policyholder, the purchase price is not returned to the nominee and the policy gets closed. 

Option-E [Single Life]: Immediate annuity for guaranteed period of 20 years and for life thereafter 

Guaranteed pension is paid for first 20 years either to policyholder himself or his nominee. Nominee gets the amount in case of death of the policyholder during a guaranteed period of 20 years. After 20 years, the policyholder gets a pension as long as he is alive. In case of death of the policyholder, the purchase price is not returned to the nominee and the policy gets closed. 

Option-F [Single Life]: Immediate annuity for life and return of purchase price 

Guaranteed pension is paid to policyholder as long as he is alive. In case of death of the policyholder, purchase price is returned to the nominee as per death settlement opted by the policyholder and policy gets closed. 

Option-G [Single Life]: Immediate annuity for life and annuity increasing at a simple rate of 3% per annum 

Guaranteed pension is paid to policyholder as long as he is alive and the pension amount increases at a rate 3% per annum according to simple interest. For example, if the yearly pension amount is Rs. 100 in 2020, it will be Rs. 103 in 2021, Rs. 106 in 2022 and so on. In case of death of the policyholder, purchase price is returned to the nominee as per death settlement opted by the policyholder and policy gets closed. 

Option-H [Joint Life]: Guaranteed annuity (pension) for life with provision for 50% of the annuity to secondary annuitant on death of primary annuitant 

In this option, the primary policyholder receives annuity (pension) as long as he survives and on death of the primary policyholder, secondary policyholder (Joint Policyholder) receives 50% of pension for lifetime. In case of death of the last survivor, the purchase amount is not returned to the nominee and policy gets closed. 

Option-I [Joint Life]: Guaranteed annuity (pension) for life with provision for 100% of the annuity to secondary annuitant on death of primary annuitant

In this option, the primary policyholder receives annuity (pension) as long as he survives and on death of the primary policyholder, secondary policyholder (Joint Policyholder) receives the same pension (100% of pension) for lifetime. In case of death of the last survivor, purchase amount is not returned to the nominee and policy gets closed. 

Option-J [Joint Life]: Guaranteed annuity (pension) for life with provision for 100% of the annuity to secondary annuitant on death of primary annuitant 

In this option, the primary policyholder receives annuity (pension) as long as he survives and on death of the primary policyholder, secondary policyholder (Joint Policyholder) receives same pension (100% of pension) for lifetime. In case of death of the last survivor, purchase amount is returned to the nominee and policy gets closed.

Pension (Annuity) Rate

Annuity or pension rate of Jeevan Akshay VII depends upon age(s) of the policyholder(s) and selected annuity option. Please use LIC Jeevan Akshay VII Pension Calculator to calculate pension as per your age and investment amount. Annuity Rates (offline) for Rs. 10,00,000 investment amount are given in the following table.

Option Primary Age Secondary Age Yearly Half-yearly Quarterly Monthly
A 50 67650 33175 16450 5446
B 50 67450 33125 16425 5438
C 50 67050 32925 16325 5404
D 50 66450 32625 16175 5354
E 50 65450 32175 15950 5288
F 50 53350 26225 12975 4296
G 50 50950 25075 12450 4129
H 50 50 64150 31775 15750 5221
I 50 50 62050 30475 15100 5004
J 50 50 53150 26125 12950 4288

Maturity Benefits

There is no maturity benefit associated with this plan. The full purchase amount is not returned to the policyholder in his lifetime. Further, purchase price is returned to the nominee as death claim in case of death of policyholder(s) in option F and J only.

LIC Jeevan Akshay VII Example

For explanation purposes, all benefits of a policy with Rs. 25,00,000 purchase price for a 50 years old policyholder with option-F has been given below.

Policy Year Age Purchase Price Death Claim Surrender Value Yearly Return
1 50 2500000 2500000 1643897 134250
2 51 2500000 1649032 134250
3 52 2500000 1654402 134250
4 53 2500000 1660258 134250
5 54 2500000 1666334 134250
6 55 2500000 1672909 134250
7 56 2500000 1679705 134250
8 57 2500000 1686736 134250
9 58 2500000 1694224 134250
10 59 2500000 1701872 134250
11 60 2500000 1709849 134250
12 61 2500000 1718074 134250
13 62 2500000 1726380 134250
14 63 2500000 1734745 134250
15 64 2500000 1743895 134250
16 65 2500000 1753260 134250
17 66 2500000 1763261 134250
18 67 2500000 1773567 134250
19 68 2500000 1785024 134250
20 69 2500000 1797333 134250
21 70 2500000 1810419 134250
22 71 2500000 1824429 134250
23 72 2500000 1839010 134250
24 73 2500000 1854258 134250
25 74 2500000 1869988 134250
26 75 2500000 1886478 134250
27 76 2500000 1903688 134250
28 77 2500000 1918816 134250
29 78 2500000 1933841 134250
30 79 2500000 1949403 134250
31 80 2500000 1965357 134250
32 81 2500000 1981710 134250
33 82 2500000 1992598 134250
34 83 2500000 2003225 134250
35 84 2500000 2013367 134250
36 85 2500000 2023551 134250
37 86 2500000 2033000 134250
38 87 2500000 2042478 134250
39 88 2500000 2051235 134250
40 89 2500000 2060006 134250
41 90 2500000 2068280 134250
42 91 2500000 2076305 134250
43 92 2500000 2084042 134250
44 93 2500000 2091491 134250
45 94 2500000 2098637 134250
46 95 2500000 2105442 134250
47 96 2500000 2112154 134250
48 97 2500000 2118484 134250
49 98 2500000 2124681 134250
50 99 2500000 2130456 134250
51 100 Assumed Death (Paid to Nominee) 2500000

Pension or Annuity is paid in the form of arrears and available after completion of selected mode duration. For example, if a policy is purchased on 1st October, 2020 , then the first yearly annuity will be available on 1st October, 2021. 

Surrender value calculation is based on latest surrender factors provided for policies which come for surrender from 1st May, 2020 to 30th April, 2021. Learn more about surrender value using LIC Jeevan Akshay VII Surrender Value Calculator. 

In the above calculation, it is assumed that death of a policyholder (or last survivor) happens at the age of 100 years and the death claim amount is paid to the nominee (applicable for Option F and J only). 

It is not an official Illustration of LIC, however the calculation has been done with utmost care to help people understand this plan better. Please report any calculation errors in the comment box.

Rebates

Incentive for higher purchase Price

In case of higher purchase price, there will be a rebate which will be given to policyholders by way of increasing annuity or pension amount. Following table provides a chart for rebates per thousand of purchase price.

Incentive for online purchase

There will be a 2% rebate by way of increase in annuity, if the policy is purchased online or if it is the case of NPS (New Pension scheme) subscribers.

Death claim settlement options

In Jeevan Akshay VII, Death claim is applicable in options F and J only. In these annuity (pension) options, the policyholder can choose one of three methods for death claim payment to his nominee.

Lump Sum Death Benefit: In this option death claim is paid in one single amount. 

Annuitisation of Death Benefit: In this option, death claim is used to purchase an immediate annuity plan according to prevailing rate and terms & conditions at the time of purchase. This option can be utilized for full death claim amount or part of it. 

In installments: In this option, death claim amount is paid in installments over chosen period of 5, 10 or 15 years. This option can be utilized for full death claim amount or part of it. The installment will be subject to minimum criteria mentioned in the following table.

Policy Surrender

LIC Jeevan Akshay VII can be surrendered after 3 months of purchase. Surrender value is applicable in options F and J only and all other options have no surrender value. 

To calculate and learn more about Jeevan Akshay VII surrender value, please visit Jeevan Akshay VII Surrender Value Calculator.

Policy Loan

LIC Jeevna Akshay has a loan facility which is restricted to option F and J only. The maximum loan amount will be 80% of surrender value. The loan amount should be such that the annual interest amount does not exceed 50% of the annual pension amount.

Free Look Period

If a policyholder is not satisfied with terms and conditions of the policy, he can request cancellation of his policy within 15 days (30 days in case of online purchase) from receipt of the policy. Policy will be cancelled and purchase price will be returned after deducting stamp duty and annuity (pension) paid.

Document Required for Purchase

ID proof 

Address Proof 

PAN Card 

Income proof 

Cancelled Cheque or bank details

Leave a Reply

Your email address will not be published. Required fields are marked *