NRIs spend their whole life working abroad with a dream of a happy life when they return home after retirement. They keep investing their money in different options available viz. stocks, mutual funds, property, gold, and LIC Life Insurance. While investment in the first four options is subject to market risks, LIC of India investment is the only option that comes with a guaranteed return.
Jeevan Shanti Plan No.858 (earlier Table No. 850) is a guaranteed pension policy from LIC of India which offers a regular flow of income against a one-time payment of premium. While investing in other options viz. equity, mutual fund, property or gold may or may not render desired returns, LIC's pension plan guarantees a fixed return on investment with provision to provide regular monthly income either immediate or deferred period. Therefore, making a one-time investment in LIC's pension plan NRIs can secure their future with the provision of a fixed income periodically whenever they want. An additional benefit that comes with the deferred option is 105% insurance cover given to the policy holder.
LIC offers two variants under this scheme – one is an immediate annuity and the second is a deferred annuity. Immediate annuity option gives you immediate income depending upon the mode of payment you choose eg. Monthly, Quarterly, Half Yearly or Yearly. In the deferred annuity option, you may choose a deferment period from 1 year to 12 years which means you will start receiving your income after the completion of the deferred period you choose, under the deferred period you receive a higher rate of return.
It is a guaranteed annuity plan which means the return (monthly/quarterly/half-yearly/annual) does not change during the term of the plan, whatever the Repo Rate may be. For example, if someone invests Rs. One Crore and goes for immediate annuity he will start receiving Rs.47,308/- monthly or Rs.5,87,500/- annually and this remains the same for policy life. While, deferred means you don't want the immediate annuity, rather want to wait for some period to start annuity. In 3 years deferred annuity option, return becomes higher i.e. Rs.55,123/- monthly or 6,90,000/- annual.
GST is exempted to NRIs if the premium is paid from the NRE account or in the foreign currency.
Please review the following comparison chart for the deferred payment plan under Jeevan Shanti for 1 Crore Single Premium:-
|Deferment Period||Yearly||Half Yearly||Quarterly||Monthly|
*Above figures are just for illustration purposes taking consideration the single premium payment of Rs. One Crore and age as 50 years. there might be slight changes in the returns depending upon age and other policy options. Rate of Return as per the last changes announced as on 02.02.2022
The minimum age requirement is 30 years and the max. is 85. This plan can be taken individually or jointly (with spouse or child/ren), in case of the death of the principal proposer, other person starts receiving the return. On the death of both, the one-time premium paid goes to the nominee.
While one can buy LIC's pension plan or Jeevan Shanti policy with a minimum one-time investment of Rs.1.50 Lakh, there is no upper limit of investment. Investor himself/herself can decide the deferment term of plan to be from one year to twelve years. One can buy this pension plan either for one-self or jointly with a spouse, children, parents, grandchildren or grandparents. LIC offers an additional benefit for differently-abled subscribers under this policy. In case of need or reinvestment purpose, one can always decide to surrender this policy and receive annuity and due return after completion of 3 month period. As usual, LIC offers 15 days' grace period within which, if unsatisfied for any reason, one can return the policy and get his entire amount of investment back without any obligation.
For more details or to learn more about LIC Pension Plan or Jeevan Shanti Policy for NRIs, please call us at +91-9230091000.
FAQ (Frequently Asked Question for Jeevan Shanti Pension Plan)
Q. Can NRI invest in LIC Jeevan Shanti Plan?
A. Yes, NRIs are allowed to buy LIC Jeevan Shanti plan with both options Immediate Annuity as well as Deferred Annuity.
Q. Is Jeevan Shanti a good policy?
A. Yes, indeed. If you compare the rate of return under Jeevan Shanti, it is comparable with any Bank Interest Rate. Additionally, it guarantees that the rate of return will remain the same and will not be reduced during the term of the policy. Today, when the rate of interest is falling globally, Jeevan Shanti is the best bet.
Q. What is the minimum amount of investment in Jeevan Shanti?
A. The minimum amount of investment is Rs.1,50,000/-, however, there is no upper limit of investment.
Q. Which option should I choose Deferred or Immediate in Jeevan Shanti Retirement Policy?
A. It depends upon a number of factors. If you are young and working, in that case, you may not be requiring the immediate return and you can wait for the pension to start. In this case, if you go for a deferment option, you will get higher returns as compared to the immediate option. Please refer to the above comparison chart for the amount you receive in the deferment. You can decide the deferment period from one year to twelve years, this deferment period depends upon you when you want the pension to start. However, if you have already retired or planning to retire in the next couple of months, you should go for an immediate annuity option so that your income should start immediately.
Q. Is pension amount I receive from LIC of India in the Jeevan Shanti plan is taxable?
A. Yes, the pension you receive from the Jeevan Shanti plan is taxable, however, no TDS is deducted by LIC of India at the time of monthly payouts. You need to add the pension amount received from Jeevan Shanti in the income column in your Annual Return and pay the payable tax to the Government as per the tax slab you fall in.
Q. Is GST exempted on LIC Jeevan Shanti premium for nris?
A. Yes, with effect from 12.10.2021 NRIs are exempted from GST payment on the premiums paid for any LIC policy including Jeevan Shanti. However, premium must be paid from the NRE account or in foreign currency to avail the GST exemption
Q. Can OCI/FNIO take Jeevan Shanti?
A. Yes, Overseas Citizens of India (OCI) or FNIO (Foreign Nationals of Indian Origin or PIO (People of Indian Origin) are allowed to invest in LIC Jeevan Shanti, an annuity plan.
Q. What are the minimum and maximum deferment period under Jeevan Shanti plan?
A.The minimum deferment in Jeevan Shanti is 1 year and maximum 12 years.
Q. Can NRI invest in LIC Jeevan Akshay?
A.Yes, NRIs/FNIOs/PIOs/OCIs/Green Card holders can invest in both annuity plans of LIC - Jeevan Akshay and Jeevan Shanti.
Q. Which pension scheme is best for NRI?
A.If your age is above 45 and can invest in a single premium plan then you can buy Jeevan Akshay or Jeevan Shanti. Jeevan Akshay will be good option for people who have already retired and needs immediate pension. Jeevan Shanti is good if you have some years to retire, you can choose the deferment period when you want to retire. If your age is below 44, you can also consider a Custom Pension Plan for NRIs
Q. Can NRI buy pension plan in India?
A.Yes, NRIs can buy LIC pension plans in India. Jeevan Akshay and Jeevan Shanti are the best pension plans available in India and NRIs can invest in both the plans
Q. Which is better Jeevan Shanti or Jeevan Akshay?
A.Both plans are good, however, it would depend upon the age of the person to decide which one should be bought. For example, if a person is above 60 years, he would definitely a pension which starts immediately, then he should buy Jeevan Akshay plan. However, if person is young and could wait for couple of years for pension to start, then he can take LIC Jeevan Shanti. The benefits Jeevan Shanti have over Jeevan Akshay are (1) Jeevan Shanti offers higher rate of return, (2) can be taken in Joint Life, (3) Jeevan Shanti provides insurance cover of 105% of purchase price
Q. Is it worth investing in LIC Jeevan Shanti?
A.LIC Jeevan Shanti is one of the best pension plan available. The plan offers upto 11.68% interest which remains fixed and guaranteed for life. The interest rate at which you join remain same for life, hence, there is no risk of loosing income due to fluctuation in the banking interest rates during your lifetime. After the retirement, most people are dependent upon the liftetime savings and they keep the money in banks and use the interest earned to run their routine expenses. However, they are always remained worried about the falling rate of interests, LIC Jeevan Shanti protects you against the possible fall in the rate of banking interest as it gives you fixed rate of interest for whole life.
Q. Is Jeevan Shanti annuity taxable?
A.Yes, the annuity received from Jeevan Shanti is taxable. The annuity becomes a part of your income and you need to pay the taxes as per the tax slabs you fall under. In case of NRIs, LIC of India would deduct the TDS depending upon your current country of residence and the DTAA rates.