LIC Jeevan Akshay VII 857: Features, Benefits, Eligibility and Example

Retirement is the stage of life when financial stability becomes paramount. To maintain the lifestyle you enjoy today and ensure that your future is free from financial uncertainties, it is essential to invest in a reliable retirement plan. Jeevan Akshay VII Plan, is a non-participating, non-linked, individual savings plan that guarantees immediate annuity payouts. This lump sum investment policy offers lifelong financial security and various benefits designed to meet the diverse needs of individuals and families.

In this article, we discuss the features, benefits, eligibility criteria and unique selling points of LIC Jeevan Akshay VII Plan in detail to provide potential policyholders with a clear understanding of this robust financial product.

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Key Features of LIC Jeevan Akshay VII

LIC Jeevan Akshay VII is a single-premium immediate annuity plan, offering a wide range of annuity options to suit the varied financial goals of policyholders. The annuity rates are guaranteed at the inception of the policy, ensuring consistent payouts throughout the lifetime of the annuitant(s). Some of the standout features include:

• Single-Premium Immediate Annuity: A one-time premium payment ensures lifetime annuity payouts.

• Flexibility in Annuity Options: Policyholders can choose between single life and joint life annuity options.

• Customizable Payment Modes: Annuity payouts can be received monthly, quarterly, half-yearly, or annually.

• Purchase Options: The plan is available both offline through agents and intermediaries, as well as online directly through the LIC website https://licindia.in/.

Annuity Options

LIC Jeevan Akshay VII offers ten distinct annuity options, each tailored to specific financial needs:

1. Immediate Annuity for Life (Option A): Payouts continue for as long as the annuitant is alive, ceasing immediately upon their demise.
2. Immediate Annuity with Guaranteed Period (Options B, C, D, and E): Annuity is paid for a guaranteed period of 5, 10, 15, or 20 years, even if the annuitant passes away during this period. Post-guarantee period, payouts cease upon the annuitant’s death.
3. Immediate Annuity for Life with Return of Purchase Price (Option F): Payouts continue for the annuitant’s lifetime, with the purchase price returned to the nominee(s) upon death.
4. Immediate Annuity for Life Increasing at a Simple Rate of 3% p.a. (Option G): The annuity amount increases annually by 3%, ensuring protection against inflation.
5. Joint Life Immediate Annuity with 50% to Secondary Annuitant (Option H): The secondary annuitant receives 50% of the annuity upon the primary annuitant’s death.
6. Joint Life Immediate Annuity with 100% to Secondary Annuitant (Option I): The secondary annuitant receives the full annuity amount after the primary annuitant’s demise.
7. Joint Life Immediate Annuity with Return of Purchase Price on Death of Last Survivor (Option J): The full annuity amount is payable as long as one of the annuitants survives, with the purchase price returned to the nominee(s) after their demise.

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Benefits of LIC Jeevan Akshay VII

The plan ensures financial stability for policyholders and their families through consistent annuity payouts. Here is a breakdown of the benefits based on annuity options:

• Lifetime Annuity: Regular payouts ensure a steady income stream.

• Guaranteed Period Options: Provides financial security for nominees during the guaranteed period.

• Inflation Protection: Option G offers annually increasing payouts to mitigate the effects of inflation.

• Return of Purchase Price: Options F and J ensure the initial investment is returned to the nominee(s), making it an attractive choice for legacy planning.

• Joint Life Coverage: Options H, I, and J offer financial protection for spouses or dependents.

Eligibility Criteria

The plan’s eligibility criteria make it accessible to a broad audience:

• Minimum Purchase Price: ₹1,00,000 for most options; ₹10,00,000 for entry ages between 25-29 years.

• Maximum Purchase Price: No limit.

• Entry Age: 25 to 85 years for most options; up to 100 years for Option F.

• Minimum Annuity: Ranges from ₹1,000 per month to ₹12,000 per annum, depending on the payout mode.

• Joint Life Annuity: Available for lineal descendants or ascendants, spouses, and siblings.

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Payment Modes

Policyholders can select a payment frequency that suits their financial requirements:

• Monthly: Provides a steady income stream for regular expenses.
• Quarterly, Half-Yearly, or Annually: Suitable for those seeking periodic lump sum payouts.

Example: How LIC Jeevan Akshay VII Benefits You

Let’s consider the case of Mr. Rajesh, a 60-year-old retiree who wants a reliable income source post-retirement. He decides to invest ₹10,00,000 in LIC Jeevan Akshay VII. Based on the annuity options outlined in the plan brochure, Mr. Rajesh chooses Option F: Immediate Annuity for Life with Return of Purchase Price, which ensures lifetime annuity payouts and refunds the purchase price to his nominee after his death.

Details of Mr. Rajesh’s Investment:

• Purchase Price: ₹10,00,000 (excluding applicable taxes).
• Annuity Option Chosen: Option F.
• Mode of Annuity Payment: Annual (payout once a year).
• Age at Entry: 60 years.

Annuity Benefits for Mr. Rajesh:

• Annual Annuity Payout: As per the example rates mentioned in the brochure, Mr. Rajesh receives ₹67,700 annually for the rest of his life.
• Lifetime Income: This ensures a steady income source, providing financial security during his retirement years.
• Return of Purchase Price: Upon Mr. Rajesh’s demise, the original purchase price of ₹10,00,000 is returned to his nominee, safeguarding his family’s financial well-being.

How It Works Over Time:

• Year 1: Mr. Rajesh receives ₹67,700 as his annual payout.
• Subsequent Years: He continues to receive ₹67,700 each year until his death, ensuring a consistent income stream.
• After Demise: The nominee (e.g., his spouse or children) receives the ₹10,00,000 purchase price as a lump sum.

Additional Benefits:

• Flexibility in Payments: If Mr. Rajesh had chosen a monthly mode, he would have received ₹5,641 monthly, making it easier to manage monthly expenses.
• Loan and Surrender Options: Should he need financial assistance, Mr. Rajesh could avail of a loan against the policy or surrender it under the defined conditions.
• Tax Efficiency: While annuity income is taxable, the plan ensures that the purchase price return provides tax-efficient benefits for the nominee.

Why This Plan Works for Mr. Rajesh:

• Steady Retirement Income: The guaranteed annual payout ensures Mr. Rajesh does not have to rely on market-linked investments for regular income.
• Legacy Planning: The return of purchase price provides financial protection for his family.
• Flexibility and Security: With no market risk and guaranteed returns, the plan aligns with Mr. Rajesh’s goal of stable retirement planning.

Incentives and Discounts

LIC Jeevan Akshay VII offers several incentives to enhance policyholder benefits:

• Higher Purchase Price Incentive: Higher purchase prices result in increased annuity rates. The incentives are structured in slabs starting from ₹5,00,000.

• Existing Policyholder Benefits: A 0.15% incentive is provided to existing LIC policyholders or nominees of deceased policyholders.

• Direct Sale Discounts: Online purchases offer additional incentives of up to 2.5% on the tabular annuity rate.

Special Provisions

The plan includes unique provisions to cater to specific segments:

• Divyangjan Benefits: Policies purchased for dependent persons with disabilities have relaxed criteria, including a lower minimum purchase price of ₹50,000.

• NPS Subscribers: National Pension System subscribers enjoy tailored annuity options as per PFRDA regulations.

• QROPS: Policies purchased as Qualifying Recognized Overseas Pension Schemes adhere to HMRC guidelines.

Loan and Surrender Options

The policy provides financial flexibility through loan and surrender options:

• Loan: Available after three months, with a maximum loan amount capped at 80% of the surrender value.
• Surrender: Allowed for Options F and J after three months, subject to conditions.

Tax Implications

Statutory taxes, such as GST, apply to the purchase price. Policyholders are advised to consult tax advisors for detailed implications regarding premiums and annuity payouts.

Grievance Redressal

LIC provides a robust grievance redressal mechanism through:

• Branch, Divisional, Zonal, and Central Offices.
• Online complaint registration via the LIC website.
• IRDAI’s grievance cell, Bima Bharosa portal, and Ombudsman services for escalated disputes.

Conclusion

LIC Jeevan Akshay VII is a comprehensive financial product catering to varied retirement and income needs. Its diverse annuity options, flexibility, and guaranteed payouts make it a reliable choice for individuals seeking financial security. Whether you prioritize inflation protection, legacy planning, or joint life coverage, Jeevan Akshay VII offers solutions tailored to your goals. With its robust incentives, flexible payment modes, and customer-centric features, this plan underscores LIC commitment to securing financial well-being for its policyholders.

Frequently Asked Questions (FAQs)

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Readers are advised to consult a licensed financial advisor or an LIC representative before making any investment decisions. The details mentioned are based on the available information and may vary. Please refer to official LIC documents for accurate and updated terms.