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LIC Jeevan Shanti

LIC Jeevan Shanti is a single premium payment policy offered by the Life Insurance Corporation of India (LIC). The plan offers the option to the policyholder to choose an either immediate or deferred annuity. As a remunerative option of a pension plan, it helps the insured to create a financial cushion for themselves and live a secure life after retirement. Both immediate and deferred annuity plan options offer various benefits to the policyholder.  The policy buyers can purchase the plan online or offline as per their suitability.

To help you know more about LIC Jeevan Shanti Plan, further we have discussed the plan in detail.

Features of LIC Jeevan Shanti Plan

The following are the salient features of the LIC Jeevan Shanti Plan.

  • The plan offers both immediate and deferred annuity options to choose from.
  • Under the immediate annuity plan, there are 10 different annuity options offered to choose from.
  • Under the deferred annuity plan, the policyholder can choose from 2 different annuity options.
  • The annuity rates are guaranteed at the initiation of the policy for both deferred and immediate annuity plan and the annuities are paid throughout the lifetime of the annuitant.
  • The plan can be purchased through offline or online process.
  • The minimum entry age of the policy is 30 years whereas, the maximum entry age of the policy for the immediate annuity plan is 85 years & 100 years and for the deferred annuity plan is 79 years.

Benefits offered by LIC Jeevan Shanti Plan

Let’s take a look at the benefits offered by LIC Jeevan Shanti Plan.

Immediate Annuity

Here is the list of benefits payable under the immediate annuity plan.

Options

Benefits

Option A

  • Based on the chosen mode of an annuity payment, the annuity payments are made in arrears to the annuitant as long as he/she is alive.
  • In case of an unfortunate demise of the annuitant, nothing is payable and the annuity payment is ceased immediately. 

 

Options B, C, D, E

  • Based on the chosen mode of the annuity payment, the annuity payments are made in arrears to the annuitant as long as he/she is alive.
  • In case of an unfortunate demise of the annuitant, during the guaranteed period, the annuity is paid to the beneficiary of the policy till the end of the guaranteed period.
  • In case of death of the annuitant after the guaranteed period nothing is payable to the beneficiary and the annuity payment ceases immediately.

Option F

  • Based on the chosen mode of the annuity payment, the annuity payments are made in arrears to the annuitant as long as he/she is alive.
  • In the event of the death of the annuitant, the annuity payment is ceased immediately and only the purchase price is paid back to the nominee of the policy.

Option G

  • As per the annuity payment mode chosen by the annuitant, the annuity payments are made in arrears to the annuitant as long as he/she lives.
  • In case of an unfortunate demise of the annuitant, nothing is payable and the annuity payment is ceased immediately.

 

Option H

  • The annuity payments are made as arrears as long as the annuitant lives.
  • In the event of the demise of the primary annuitant, 50% of the annuity amount is payable to the secondary annuitant as long as he/she lives. The annuity payment will cease on the subsequent death of the second annuitant.
  • In case, if the secondary annuitant dies before the primary annuitant then full annuity will continue to be paid to the primary annuitant till he/she survives.

Option I

  • Based on the chosen mode of an annuity payment, 100% of the annuity is paid as arrears to the primary or secondary annuitant as long as they live.
  • On the demise of the last survivor, the annuity payment will cease immediately and nothing will be paid.

 

Option  J

  • Based on the chosen mode of an annuity payment, 100% of the annuity is paid as arrears to the primary or secondary annuitant as long as they live.
  • On the demise of the last survivor, the annuity payment will cease immediately and only the purchase price will be paid to the beneficiary of the policy.

 

Deferred Annuity

Here is the list of benefits payable under the deferred annuity plan.

Options

Benefits

Option 1

During the Deferment Period

  • On survival of the annuitant, nothing is payable to the annuitant.
  • In the event of the demise of the annuitant, death benefit as mentioned in the policy is paid to the beneficiary of the policy.

 

After the Deferment Period

  • As per the chosen mode of payment, the annuity is paid as arrears to the annuitant as long as he/she survives.
  • In case, of death of the annuitant, the annuity payment will cease immediately and the death benefit is paid to the beneficiary of the policy.

 

Option 2

During the Deferment Period

  • On survival of primary or secondary annuitant, nothing is payable.
  • On the demise of the last survivor, death benefit as mentioned in the policy is paid to the nominee.
  • After the Deferment Period
  • Based on the chosen mode of an annuity payment, the annuity is paid as arrears to the primary or secondary annuitant as long as they live.
  • In case of death of the last survivor, the annuity payment is ceased immediately and the death benefit is paid to the beneficiary of the policy.

Death Benefit

The death benefit is applicable only in case of a deferred annuity plan. The death benefit paid to the nominee of the policy is higher of:

  • Purchase price + accrued guaranteed additions- total annuity amount payable till the date of death, if any

Or

  • 110% of purchase price
  • Accrued Guaranteed Additions

This is applicable only in case of accrued guaranteed additions. The guaranteed addition is accrued at the end of each policy month till the end of the deferment period only. The accrued guaranteed addition is calculated as:

Guaranteed Addition per Month = (Purchase price + annuity rate p.e payable monthly) / 12

Eligibility Criteria of LIC Jeevan Shanti Plan

Let’s take a look at the eligibility criteria of the policy.

Minimum purchase price- Rs.1,50,000 ( Subject to a minimum annuity as specified below)

Maximum purchase price- No limit

Minimum entry age- 30 years

Minimum Annuity:

Annuity Mode

Annually

Half-yearly

Quarterly

Monthly

Minimum Annuity

Rs.12,000 p.a

Rs. 6,000  per half year

Rs. 3,000 per quarter

Rs.1,000 per month

 *Joint Life- The joint-life annuity can be taken between any lineal ascendant/ descendant of the family (i.e. parent, grandparent, children, grandchildren, spouse)

Criteria

Immediate Annuity

Deferred Annuity

Maximum Entry Age

85 years (except option F)

100 years for option F

79 years( Completed)

Minimum deferment period

N/A

1 year

Maximum Deferment period

N/A

20 years subject to maximum ves ting age

Minimum Vesting Age

N/A

31 years (completed)

Maximum Vesting Age

N/A

80 years (completed)

Modes of Annuity Payment

Yearly, Half-yearly, quarterly & monthly

Other Details of LIC Jeevan Shanti Plan

Let’s take a look at some of the other details of LIC Jeevan Shanti Plan:

Surrender Value

The policyholder can surrender the policy anytime after the completion of 3 months of the policy. If the policyholder surrenders the policy, the surrender value paid under immediate and deferred annuity will be.

The guaranteed surrender value paid to the insurance holder is equal to ( guaranteed surrender value factor * purchase price) – total payable annuity amount till the date of surrender. Another important factor that determined the surrender value of the policy is the age of the annuitant at the time of vesting/ surrendering the policy.

Loan

The loan facility is offered by the policy after completion of 1 policy year. The policy loan is available under the following annuity options only:

Immediate Annuity

  • Option F- Immediate annuity for life with return of purchase price.
  • Option J- Joint life immediate annuity for life with a provision of 100% of the annuity payable till the time the annuitant survives and the return of purchase price on death of the last survivor.

Deferred Annuity

  • Option 1- Deferred annuity for a single life.
  • Option 2- Deferred annuity for joint life.

The maximum loan amount granted under the plan as an effective annual interest amount payable on loan should not exceed 50% of the annual annuity amount and are subject to a maximum of 80% of the surrender value. 

Any outstanding loan amount with interest or any other amount recoverable from the annuitant is recovered from the payment of surrender value.

Free Look Period

A free-look period of 15 days – 30 days is offered to the policyholder, wherein they can cancel the policy of he/she is not satisfied with the terms and conditions of the policy.

Exclusions:

Besides the various benefits offered by the policy, there is certain exclusion under the plan, let’s take a look at it.

Suicide

Immediate Annuity Plan

The policy is nullified in case; the annuitant (primary/secondary) commits suicide within 12 months from the date of commencement of risk. In this case, the amount which is higher of 100% of the purchase price or surrender value is paid back to the beneficiary of the policy. In this case, the claim filed is rejected by the insurance company.

Deferred Annuity Plan

The policy is cancelled and no claim is entertained by the insurance company if the annuitant (primary/secondary) commits suicide within 12 months from the date of commencement of risk. In this case, the amount which is higher of 80% of the purchase price or surrender value is paid back to the beneficiary of the policy.

Written By: PolicyBazaar - Updated: 19 June 2020