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.43,125/- monthly or Rs.5,33,500/- 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.49,283/- monthly or 6,17,000/- annual. 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, there might be slight changes in the payment depending upon age and other policy options.
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.
You can download the Jeevan Shanti Policy Form here.
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.