LIC New Jeevan Nidhi Plan is a deferred annuity plan with bonus. This is a non unit-linked insurance pension plan. This plan is purchased to cover the risk of living too long and hence has multiple pension options to cover that risk. The corpus that is created to provide pension for old age is the Sum Assured + Accrued Guaranteed Additions + Simple Reversionary Bonus + Terminal Bonus. The age where pension is payable is called Vesting Age and the date when pension starts is called Vesting Date.
Death Benefit – In case of death of the Life Insured before the vesting date, but
Within the first 5 years of the policy: provided all premiums have been paid, the nominee will be provided the Basic Sum Assured + accrued Guaranteed Additions which can be paid in a lumpsum or as annuity or a combination of the two.
After the first 5 years of the policy: provided all premiums have been paid, the nominee will be provided the Basic Sum Assured + accrued Guaranteed Additions + Simple Reversionary + Final Additional Bonus, if any, which can be paid in a lumpsum or as annuity or a combination of the two.
In case of death of the Life Insured after the vesting date, it entirely depends upon pension option chosen.
Vesting Benefit – At the time of vesting, there are 3 choices
Withdraw 1/3rd of the entire corpus tax free and then purchase an Immediate Annuity Plan from the remaining amount at the prevailing annuity rates
Buy an Immediate Annuity Plan from the entire amount at the prevailing annuity rates
Buy a Single Premium Deferred Annuity Plan
Immediate Annuity Plan can be purchased only from LIC of India and the vesting option can be chosen from the available options at that time and it cannot be ascertained now.
Income Tax Benefit – Premiums paid under life insurance policy are exempted from tax under Section 80 C and 1/3rd of the maturity proceeds are exempted from tax under Section 10(10A). Pension amount will be taxable.
Basic Sum Assured (in Rs.)
1,00,000 for Regular Premium and 1,50,000 for Single Premium
Deferment Period (in years)
7 for Regular Premium
5 for Single Premium
Premium Payment Term (in years)
Entry Age (in years)
58 for Regular Premium and 60 for Single Premium
Age at Vesting (in years)
Premium (in Rs.)
10,000 for Single
3000 for Regular
Single, Yearly, Half-yearly, Quarterly, Monthly and SSS
The below illustration is for a healthy Male of 35 years (non-tobacco user) opting for Sum Assured of Rs 1,00,000 and Deferment Period of 20 and 30 years respectively.
Riders - There is 1 additional rider available:
Accidental Death and Disability Benefit rider
You stop paying the premium – If the premiums are not paid within the grace period, the policy lapses and all benefits cease. However, there the policy can be revived within 2 years from the date of first unpaid premium.
You want to surrender the policy – There is a Guaranteed Surrender Value in this plan
Single Premium Policies: The policy can be surrendered at any time during the deferment period and the Guaranteed Surrender Value would be:
Within 3 policy years would be 70% of the Single Premium Paid excluding taxes and extra premium, if any and
After 3 policy years would be 90% of the Single Premium Paid excluding taxes and extra premium, if any
Regular Premium Policies:
For deferment period less than 10 years: The policy can be surrendered provided the premiums have been paid for at least two consecutive years.
For deferment period 10 years or more: The policy can be surrendered provided the premiums have been paid for at least three consecutive years.
The Guaranteed Surrender Value is a percentage of total premiums paid excluding taxes, extra premiums, if any and rider premium and it depends on the deferment period and the policy year in which the policy is surrendered.
You want a loan against your policy – Loan facility is not available under this policy
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