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HomePersonal FinanceLife InsuranceLIC New Jeevan Shanti - Plan 858 - Review Features & Benefits

LIC New Jeevan Shanti – Plan 858 – Review Features & Benefits

LIC New Jeevan Shanti (Plan 858) is new pension plan launched by LIC in the year 2020. New Jeevan Shanti is non-linked, non-participating, individual single premium deferred annuity plan. This plan is launched on 21st October, 2020.

Few days’ back LIC has launched LIC Jeevan Akshay VII plan (Table 857). At the time of launching Jeevan Akhsay VII plan, LIC has discontinued single premium pension plan Jeevan Shanti (Table 850). The main reason was falling interest rate. Now LIC is relaunching New Jeevan Shanti plan with few modifications.

New Jeevan Shanti is single premium annuity plan available with two options. This plan can be purchased for single life as well as joint life. Here is complete information about LIC’s New Jeevan Shanti Plan along with key features benefits and review.

LIC New Jeevan Shanti Plan

As of now, LIC offers three different pension plans. (1) Pradhan Mantri Vaya Vandana Yojana (2) LIC Jeevan Akshay VII – 857 plan (3) New Jeevan Shanti – 858 plan. You can refer my earlier posts to get information about these plans.

LIC New Jeevan Shanti – Plan 858 Key Features

  • Minimum Entry Age – 30 Years
  • Maximum Entry Age – 79 Years
  • Minimum Deferment Period – 1 Year
  • Maximum Deferment Period – 12 Years
  • Minimum Vesting Age – 31 Years
  • Maximum Vesting Age – 80 Years
  • Joint Life Cover – Yes
  • Minimum Purchase Price – 1.5 Lakh
  • Maximum Purchase Price – No Limit
  • Minimum Annuity – Rs. 12000 per year
  • Online & Offline Purchase Options
  • Loan – Offered against this plan

How LIC New Jeevan Shanti – Plan 858 Works?

You can purchase New Jeevan Shanti plan online as well as offline. It is a single premium policy. In this plan annuity option to be selected. Based on selection of annuity option pension is payable to policyholder till the time policy holder is alive. The pension is called annuity and it is payable only after the deferment period. Nothing is paid during deferment period. This benefit is also available in the joint life option.

Death benefit is also payable during or after deferment period. Death benefit is paid to nominee based on option exercised by policyholder. In case joint life option is selected benefit is payable to last survivor and also to nominee.

The joint-life annuity can be taken between two lineal descendant/ascendant of a family (grandparent, parent, children, grandchildren) or spouse or siblings.

As it is deferred annuity plan at the first instance policyholder needs to pay single premium. Annuity will be payable only after deferment period.      During deferment period the insurance company invests your premium.

Annuity Options and Benefits

#1 Deferred annuity for Single Life

Benefit payable on Survival –

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.

Benefit payable on Death –

Higher of Purchase Price + Accrued Additional Benefit on Death – Total annuity amount payable till date of death or 105% of Purchase Price

On death of the Annuitant during the deferment period: Death Benefit as defined above shall be payable to nominee.

On death of the Annuitant after the deferment period: The annuity payments shall cease immediately and Death Benefit as defined above shall be payable to nominee.

#2 Deferred annuity for Joint life

Benefit payable on Survival –

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.

Benefit payable on Death –

Higher of Purchase Price + Accrued Additional Benefit on Death – Total annuity amount payable till date of death or 105% of Purchase Price (Same as that of single life)

During deferment period in case of death of first holder nothing is payable. On the death of last survivor death benefits as defined above shall be payable to the nominee.

After deferment period on first death (of either of the covered lives): 100% of the annuity amount shall continue to be paid as long as one of the Annuitant is alive.

On death of the last survivor: Annuity payment shall cease immediately and Death Benefit as defined above shall be payable to nominee

LIC’s New Jeevan Shanti (Table 858) plan – Review

The positives and negatives about this plan after going through policy information is given below.

Positives

  • Guaranteed Pension plan with deferred annuity
  • Annuity rates are guaranteed at inception of policy
  • Joint Life Annuity option available
  • Two different annuity options available for selection
  • Discount is offered on purchasing policy online

Negatives

  • Minimum age entry is 30 years and maximum deferment is 12 years. This means you will get pension at 42 years of age. That is too early.
  • Maximum Vesting age is 80 years. This means you will not get pension after 80 years of age.
  • The expected annuity amount to be low and unable to beat inflation.
  • Pension received from this plan is taxable. This means post tax returns would be low.

In short, LIC New Jeevan Shanti is combination of positives and negatives. The decision of buying this policy is entirely on you. However, I suggest if you are planning for retirement benefit you should explore mutual funds, PPF and other investment options.

For more information about this plan, please refer to LIC website.

Shitanshu Kapadia
Shitanshu Kapadiahttp://moneyexcel.com/
Hi, I am Shitanshu Kapadia founder of moneyexcel.com. I have written 1800+ articles on this blog. I am PGDBA(marketing), engaged in blogging for 10 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. The purpose of this blog is to spread financial awareness and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.
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