Especially with coronavirus shaking the world economy and falling interest rates in various saving schemes, it becomes difficult for the customer to find an attractive plan.
Senior citizens often rely on FDs for a regular and steady income after their retirement. But with the rising risk of recession, banks have started a cut on FD interest rates, which do not cross the 7 percent mark. Hence, LIC brings an attractive alternative for all senior citizens. Below mentioned are a few LIC senior citizen monthly income schemes for the customer’s reference.
LIC Policy for Senior Citizen Monthly Income
Life Insurance Corporation of India has various offers for you as customers if you want to invest as a senior citizen and plan your pension in time. Pension plans of LIC enable you to enjoy your financial independence even after your retirement. If you’ve chosen to invest in any pension plan, trust LIC, for the gains of the distribution phase will be worth the pains of the accumulation phase.
Pradhan Mantri Vaya Vandana Yojana
This pension scheme was launched by LIC, for senior citizens in the year 2017 and will be available for consumers for purchase for another three years i.e. up to March 2023. In the current year of 2023, the scheme will earn an interest of 7.40% payable every month which will be fully taxable. The main attraction of this scheme is its high returns.
- The customer must have attained 60 years of age
- The customer must be a citizen of India
- The customer can invest in this scheme only with a lump sum amount of your convenience.
The key features offered by Pradhan Mantri Vaya Vandana Yojana are as follows:
- It is a government’s pension plan devised for citizens above 60 years of age and the insurer can invest upto Rs 15 Lakh.
- It can be purchased offline as well as online and the insurer can also pay his LIC premium payment online through his account.
- The tenure of the policy is 10 years and the returns gained at the rate of 7.4% pa will be paid monthly to the beneficiary for the entire duration of the policy. But if the beneficiary chooses a yearly mode of pension, he will be entitled to an interest rate of 7.66%.
- The pension amount that can be drawn is between Rs1000 – 9250 per month.
- The pensioner has the choice of pension price as well as the mode of pension is monthly, quarterly, half-yearly or yearly
The key benefits of the plan are as follows:
- If the pensioner survives the entire duration of the policy then pension in arrears will be payable to him but according to LIC, in case of death of the pensioner during the policy term, the nominee will receive the invested amount or purchase price
- After three years of the purchase of the policy the customer can also avail a loan against it up to a maximum of 75% of his investment.
- In case of premature exit, the investor will receive 98% of the purchase price as surrender value. But LIC allows the surrender of the policy only in unique cases like the case of the pensioner’s terminal illness or that of his/her spouse.
LIC Jeevan Shanti Plan
LIC’s Jeevan Shanti again is a single premium deferred annuity plan. This means you’ll have to make the investment with a lump sum. The deferment period of this policy is from one to twelve years. This scheme has two variants: Single Life & Joint Life Deferred Annuity. Single life covers only one individual under this scheme while Joint Life covers two individuals under one scheme where both the insurers will be equal participants in the pension.
- The customer must be in between 30-79 years of age
- He/she must be a citizen of India
- The minimum purchase price is 1.5 Lakh
The key features of the LIC Jeevan Shanti Plan are as follows:
- The death benefits do not change with a single or joint-life deferred annuity. Under both the variants, the beneficiary nominee will receive 105% times Purchase Price or (Purchase Price + additional benefit on death), whichever is higher.
- The death benefit is paid in three modes: lump-sum payment, instalment basis or annually basis, the choice of which is made by the customer at the inception of the policy.
- To purchase the joint-life deferred annuity version of LIC’s Jeevan Shanti Plan, the customer can add his/her spouse, children, parents, siblings, grandparents or grandchildren. It is a must that the joint partner has attained the age of 35 years.
- At the inception of the policy, it is the customer’s choice to select the mode of payment of his pension which will be paid in arrears (yearly, half-yearly, quarterly or monthly)
- The investor will get a full interest as guaranteed at the inception of the policy but will experience a decrease in the interest rate with half-yearly, quarterly and monthly annuity payment frequency. The percentage of reduction in (yearly) annuity rate is 2% for half-yearly mode, 3% for quarterly mode and 4% for monthly mode.
The key benefits of the plan are as follows:
- The customer can apply for a loan against the policy after three months of its inception. The amount of the interest of your loan should never be more than 50% of your pension or more than 80% of your surrender value.
- One can surrender the policy at any time during the plan tenure.
- There is no maturity benefit under this Plan but the customer will start getting his pension from his 31st year.
- The customer can avail of tax benefits under section 80C on the income under this scheme even though the pension received under this plan is completely taxable.
- The death benefit amount received will also be tax-free.
- This policy can be bought online as well as offline. But if the investor makes the purchase online, directly from LIC’s website, he/ she will receive a 2% incentive. He can easily buy this LIC policy by online payment.
- The customer gets a free look period of 15 days for offline mode of purchase and 30 days for online purchase.
LIC Jeevan Akshay – VII
LIC’s Jeevan Akshay VII is a fixed benefit plan in which the policyholder has all information about the amount of pension he will receive. This information is provided to him at the inception only. Jeevan Akshay is a single premium immediate annuity/pension plan. It is a single premium policy.
- The minimum entry age is 30 years while the maximum is 85 years but for option F, the maximum age is 100 years.
- The minimum investment is 1.5 lakhs
The following are the key features of the plan:
- There are four modes of pension payment: yearly, half-yearly, quarterly and monthly.
- LIC has provided ten annuity options to the customers under this plan. Listed under the options A to G covers single life. Options H, I and J covers joint life.
- Only option F and J have the facility to return the purchase price. This means that your invested amount will be returned to the nominee after your death. While in other option, the investment will not be returned.
- The customer can purchase this policy jointly with his/ her spouse, children, siblings, parents, grandparents and grandchildren.
- Special provision for handicapped dependent as there is no restriction on minimum annuity and minimum purchase price. They can make the purchase with a lump sum of only 50k.
The following is the list of benefits offered under this scheme:
- There’s no maturity benefit. Only survival or death benefit in some cases.
- You can make your purchase online and even pay your premium online through your LIC account.
- There is no restriction on the minimum pension for the subscribers of the national pension.
- This policy provides a rebate for the high purchase price. Under this, the pension of the pensioner increases.
- The policyholder can change the mode of payment of the death benefit till the time he is alive. After his death, the nominee cannot change this option. Three modes of payment of death benefit amount area lump-sum death benefit, annuitisation of death and in instalments.
- Tax exempted under section 80C on the premium but your pension received will be taxable. The death benefit is also tax-free.
- You can surrender your policy after 3 months of inception but you can only surrender your policy if you’ve made your purchase under option F and J.
- The loan facility is also available after 3 months but only for products purchased under options F and J.
Benefits of Monthly Income LIC Plans for Senior Citizens
LIC plans for senior citizens are one of the best ways to plan your retirement with. One of the most important benefits of retirement plans/pension plans is that it helps secure the customer’s future.
It inculcates a saving habit in him with which he can buy pension plans like PMVVY and LIC’s Jeevan Shanti, and gain wealth in the long term by compounding. These senior citizen plans are specially designed to meet the post-retirement needs of the customer.
Not only this, but the death benefits also make sure to take care of your family’s financial needs after you. This monthly income LIC plan ensures that you remain economically sound even post-retirement.
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply.