LIC New Jeevan Shanti Plan 758 – The Life Insurance Corporation of India (LIC) has reintroduced its much-anticipated pension plan, the New Jeevan Shanti Plan (Table No. 758), effective from October 1, 2024. This plan, previously discontinued on September 30, 2024, has returned with enhanced features and benefits designed to cater to the needs of those planning for a secure retirement. Here’s an in-depth look at its features, benefits, and reasons to consider investing in it.
Also see: LIC Micro Bachat Plan 751
LIC New Jeevan Shanti Plan 758: Introduction
LIC’s New Jeevan Shanti (UIN: 512N338V07) is a Non-Participating (Non-Par), Non-Linked, Individual Savings Deferred Annuity Plan crafted to provide a secure financial future. This plan allows policyholders the flexibility to choose between Single Life and Joint Life Deferred Annuity options, catering to diverse financial needs. The annuity rates are fixed at the inception of the policy, ensuring guaranteed payouts throughout the annuitant’s lifetime post the deferment period.
As a Non-Par product, the benefits payable on death or survival are predetermined and unaffected by market performance or other variables. This makes it a reliable choice for individuals seeking fixed returns without discretionary bonuses or surplus sharing.
The New Jeevan Shanti plan is accessible both offline, through LIC agents and intermediaries, and online via the official LIC website (www.licindia.in). With its comprehensive features and guaranteed benefits, it serves as a robust solution for long-term financial planning.
Also see: LIC Jeevan Tarun Plan 734
Key Features and Eligibility
1. Plan Type
A Deferred Annuity Plan, available for both Single Life and Joint Life.
- Single Life Annuity: For an individual.
- Joint Life Annuity: Covering two lives (e.g., spouses or family members).
Pension or annuity payments commence after a deferment period chosen by the policyholder.
2. Eligibility
- Entry Age: 30 to 79 years.
- Vesting Age: 31 to 80 years
- Joint Life Minimum Age: Both lives must be at least 30 years old.
- Eligibility for Joint Life Option: The plan permits joint-life annuities with family members, including spouses, children, siblings, parents, grandparents, and grandchildren. However, the minimum age for the second life in a joint plan is 30 years.
3. Flexibility:
- Selection of annuity payment frequency: yearly, half-yearly, quarterly, or monthly.
- Death benefit payout options: lump sum, annuitization, or installments.
4. Minimum and Maximum Sum Assured
- Minimum: ₹1.5 lakh (₹50,000 for NPS subscribers and individuals with disabilities).
- Maximum: No upper limit.
5. Premium Payment Term
- Single Premium: One-time payment required at policy inception.
6. Deferment Period
- For both Single and Joint Life: 1 year to 5 years.
- A significant reduction from the earlier maximum of 12 years.
7. Annuity Options and Modes of Payment
The Jeevan Shanti Plan offers flexibility in annuity payouts, allowing policyholders to choose a mode that suits their financial needs:
- Monthly: Minimum annuity of ₹1,000
- Quarterly: Minimum annuity of ₹3,000
- Half-Yearly: Minimum annuity of ₹6,000
- Yearly: Minimum annuity of ₹12,000
There is no maximum limit on the annuity amount, enabling high-net-worth individuals to customize payouts according to their requirements.
8. Accessibility:
Available offline through agents or intermediaries and online via the LIC website.
Also see: LIC Bima Shree Plan 748
Benefits of the New Jeevan Shanti Plan
1. Guaranteed Regular Income
The plan ensures consistent pension payments, making it ideal for retirees or individuals seeking financial security. Monthly modes are especially beneficial for meeting regular living expenses.
2. Flexible Payout Options
Policyholders can choose the frequency of their pension payouts based on their financial needs. Options include monthly, quarterly, half-yearly, or yearly payments.
3. Tax Benefits
- Premium payments qualify for tax deductions under Section 80C.
- However, annuity payouts are taxable as per the individual’s income slab.
4. Surrender and Loan Facility
- Policies can be surrendered at any time.
- Loans are available after 3 months from the policy start date, offering up to 80% of the surrender value.
Also see: LIC New Money Back Plan 720
Death Benefits
1. Single Life Option
- If the annuitant passes away during the deferment period, the purchase price (premium) and accrued returns are paid to the nominee.
- If death occurs after annuity payments begin, the nominee receives the remaining purchase price.
2. Joint Life Option
- Upon the first annuitant’s death, the second annuitant continues to receive the annuity for life.
- After the second annuitant’s demise, the purchase price is refunded to the nominee.
3. Installment Options for Death Benefits
- The plan also offers flexibility in choosing death benefits, such as lump sum payments or installment options for 5, 10, or 15 years.
Also see: LIC Revised Jeevan Amar Plan 995
Incentives for Higher Purchase Prices
For investments above a certain threshold, the plan offers incentives on annuity rates:
| Purchase Price Range (₹) | Incentive Rate (₹ per ₹1,000) |
|---|---|
| 5,00,000 – 9,99,000 | ₹1.50 |
| 10,00,000 – 24,99,000 | ₹2.10 |
| 25,00,000 – 49,99,000 | ₹2.45 |
| 50,00,000 – 99,99,000 | ₹2.60 |
| Above 1 crore | ₹2.70 |
Also see: LIC Saral Pension Plan: Annuity Option Explained
Detailed Example of Single Life Investment in LIC Jeevan Shanti Plan
Let’s consider a scenario where an individual, aged 50, decides to invest ₹10 lakhs in the LIC Jeevan Shanti Plan (Single Life Option). The plan offers a deferred annuity, meaning the pension payments start after a chosen deferment period. Below is a breakdown of the potential returns based on different deferment periods:
Investment Details:
- Purchase Price (Investment): ₹10,00,000
- Age at Entry: 50 years
- Plan Type: Single Life Deferred Annuity
- Annuity Mode: Yearly and Monthly
Returns Based on Deferment Period
1. Deferment Period: 5 Years
- Annual Pension: ₹90,000 (~9% return on investment)
- Monthly Pension Equivalent: ₹7,500
After a deferment of 5 years, the policyholder starts receiving an annual pension of ₹90,000. This ensures a steady income for life after the deferment period ends.
2. Deferment Period: 3 Years
- Annual Pension: ₹81,000 (~8.1% return on investment)
- Monthly Pension Equivalent: ₹6,750
With a 3-year deferment, the annual pension reduces slightly due to the shorter deferment period but still offers a competitive return.
3. Deferment Period: 2 Years
- Annual Pension: ₹75,000 (~7.5% return on investment)
- Monthly Pension Equivalent: ₹6,250
Choosing a 2-year deferment leads to a smaller annuity, as the investment accumulates for a shorter duration before payouts begin.
4. Deferment Period: 1 Year (Next Year Pension)
- Annual Pension: ₹69,700 (~6.97% return on investment)
- Monthly Pension Equivalent: ₹5,576
If the individual opts for the shortest deferment period, they begin receiving their pension almost immediately (after one year), but the annual return is lower compared to longer deferment periods.
Key Insights
- Longer deferment periods yield higher annual pensions, making them ideal for individuals who can afford to wait before receiving payouts.
- Monthly pension options provide regular income, which can be helpful for managing day-to-day expenses.
- Returns are locked in at the time of purchase, ensuring predictability.
This example illustrates how the LIC Jeevan Shanti Plan accommodates varying financial needs based on deferment choices while guaranteeing a steady income for life.
Detailed Example of Joint Life in LIC Jeevan Shanti Plan
Scenario: A 50-year-old individual invests ₹10 lakhs in the Jeevan Shanti Plan with their 30-year-old daughter as the second annuitant under the joint life option.
Key Parameters:
- Investment Amount (Purchase Price): ₹10 lakhs
- Second Annuitant’s Age: 30 years
- Deferment Period Options: 1 year, 2 years, 3 years, or 5 years
- Annuity Payout Mode: Yearly
Annuity Payout Based on Deferment Period:
1. Deferment Period: 5 Years
- Annual Annuity: ₹84,900
- Rate of Return: ~8.49% per annum
After waiting for five years, the policyholder begins receiving ₹84,900 yearly. This option is ideal for maximizing returns as the deferment period increases.
2. Deferment Period: 3 Years
- Annual Annuity: ₹77,800
- Rate of Return: ~7.78% per annum
By choosing a 3-year deferment, the policyholder starts receiving ₹77,800 annually, balancing moderate returns with a shorter waiting period.
3. Deferment Period: 2 Years
- Annual Annuity: ₹72,800
- Rate of Return: ~7.28% per annum
With a 2-year deferment, the annuity amount is slightly reduced, but the policyholder can begin receiving payments earlier.
4. Deferment Period: 1 Year
- Annual Annuity: ₹68,000
- Rate of Return: ~6% per annum
Opting for the shortest deferment period of one year provides a quicker start to the annuity but at a reduced return rate.
Post-Death Provisions:
- First Annuitant’s Death: The second annuitant (daughter) continues to receive the annuity payments for her lifetime.
- Second Annuitant’s Death: Upon the death of both annuitants, the purchase price (₹10 lakhs) is returned to the nominee.
This example demonstrates how the deferment period impacts the annuity payout, allowing policyholders to tailor the plan according to their financial goals and life circumstances.
Changes from the Previous Version
- Reduced Maximum Deferment Period: Earlier, the plan allowed up to 12 years of deferment. The revised version caps this at 5 years, making it more aligned with short-to-medium-term financial planning.
- Enhanced Flexibility: Options for joint-life annuities now include a broader range of relationships, such as grandchildren and siblings.
- Improved Incentives: Higher returns are offered for larger investments, making it more lucrative for affluent customers.
Why Choose the Jeevan Shanti Plan?
Pros:
- Steady Income: Ideal for retirees or individuals seeking long-term financial stability.
- Flexibility: Various annuity payout modes and joint-life options.
- Security: Guaranteed income with death benefits for nominees.
- Loan Facility: Provides liquidity in times of need.
Cons:
- Taxable Returns: Annuity income is taxable, reducing the net income for higher tax bracket individuals.
- No Maturity Benefit: The plan does not provide lump sum maturity payouts, which may not suit investors looking for wealth accumulation.
Target Audience
This plan is particularly suited for:
- Senior Citizens: Ensures a regular income post-retirement.
- Widows or Dependents: Provides financial security through steady pensions.
- NPS Subscribers or Differently-Abled Individuals: With reduced minimum sum assured, it caters to a broader audience.
- Investors with Large Corpus: High incentives make it appealing for those with significant lump sums.
Conclusion
The reintroduced Jeevan Shanti Plan (Table No. 758) stands out as a comprehensive deferred annuity scheme, offering flexibility, security, and steady income. With its revamped features and benefits, it caters to a wide range of financial needs, from retirees to high-net-worth individuals. While the taxable nature of annuities may deter some, the overall package remains an attractive option for those seeking guaranteed lifetime income.
Investors are advised to assess their financial goals and consult a financial advisor to determine if the Jeevan Shanti Plan aligns with their retirement and investment strategies.
FAQs
What is the minimum and maximum deferment period under the joint life option?
The minimum deferment period is 1 year, and the maximum is 5 years.
Who can be the second annuitant in the joint life option?
The second annuitant can be a family member, such as a spouse, child, sibling, parent, grandparent, or grandchild. However, the minimum age for the second annuitant is 30 years.
What happens if the first annuitant passes away?
If the first annuitant dies, the second annuitant will continue receiving annuity payments until their lifetime. After both annuitants pass away, the purchase price is returned to the nominee.
Can the annuity payout mode be changed after the policy is purchased?
No, once the annuity payout mode (monthly, quarterly, half-yearly, or yearly) is selected at the time of purchase, it cannot be changed later.
Is there a loan facility available under the Jeevan Shanti Plan?
Yes, a loan can be availed after 3 months from the policy’s commencement date. The loan amount is up to 80% of the surrender value.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial advice. Policy terms, conditions, and benefits are subject to change as per LIC’s regulations. Please consult an authorized LIC advisor or review the official policy document before making investment decisions to ensure the plan meets your financial goals and requirements.