LIC’s Jeevan Akshay-VII
LIC’s Jeevan Akshay - VII is a Non-Linked, Non-Participating, Individual, Immediate Annuity plan. The annuity rates are guaranteed at the inception of the policy and annuities are payable throughout the life time of Annuitant(s).
This is a non-participating product under which benefits payable on death or survival are guaranteed and fixed (as per the chosen Annuity Option) irrespective of actual experience. Hence the policy is not entitled to any discretionary benefits like bonus etc. or share in Surplus.
This Plan can be purchased Offline through agents / other intermediaries as well as Online directly through website www.licindia.in.
1. Key Features:
Single Premium Immediate Annuity Plan
Wide range of annuity options to suit your needs.
Flexibility to choose from:
Single Life Annuity and Joint Life Annuity.
Mode of Annuity payments (yearly, half-yearly, quarterly and monthly).
2. Annuity Options:
The available annuity options under this plan are as under:
| Option A | : Immediate Annuity for life. |
|---|---|
| Option B | : Immediate Annuity with guaranteed period of 5 years and life thereafter. |
| Option C | : Immediate Annuity with guaranteed period of 10 years and life thereafter. |
| Option D | : Immediate Annuity with guaranteed period of 15 years and life thereafter. |
| Option E | : Immediate Annuity with guaranteed period of 20 years and life thereafter. |
| Option F | : Immediate Annuity for life with return of Purchase Price. |
| Option G | : Immediate Annuity for life increasing at a simple rate of 3% p.a. |
| Option H | : Joint Life Immediate Annuity for life with a provision for 50% of the annuity to the Secondary Annuitant on death of the Primary Annuitant. |
| Option I | : Joint Life Immediate Annuity for life with a provision for 100% of the annuity payable as long as one of the Annuitant survives. |
| Option J | : Joint Life Immediate Annuity for life with a provision for 100% of the annuity payable as long as one of the Annuitant survives and return of Purchase Price on death of last survivor. |
Annuity option once chosen cannot be altered.
3. Benefits:
Benefits payable under above options are:
| Option | Benefits |
|---|---|
| Option A |
|
| Option B,C,D,E |
|
| Option F |
|
| Option G |
|
| Option H |
|
| Option I |
|
| Option J |
|
4. Eligibility Criteria:
-
Minimum Purchase Price*:
Age at entry (in completed years) Minimum Purchase Price 25 years to 29 years : ₹10,00,000/- 30 years and above : ₹1,00,000/- subject to Minimum Annuity as specified below Note:
The above mentioned minimum purchase price would be increased appropriately to meet minimum annuity criterion as specified below.
For Purchase Price less than ₹1,50,000/-, annuity rates given under this plan shall be reduced with Reduction Factors as given in Para 7 below.
Maximum Purchase Price : No Limit
Minimum Age at Entry : 25 years (completed) subject to minimum Purchase Price as specified under 4(i) above
Maximum Age at Entry : 85 years (completed) except Option F 100 years (completed) for Option F
-
Minimum Annuity*:
Annuity Mode Monthly Quarterly Half-yearly Annual Minimum Annuity ₹1,000 per month ₹3,000 per quarter ₹6,000 per half year ₹12,000 per annum Joint Life: The joint life annuity can be taken between any two lineal descendant/ascendant of a family (i.e. Grandparent, Parent, Children, Grand children) or spouse or siblings.
*Exceptional cases where minimum Purchase Price and minimum annuity as specified above shall not be applicable:
If the plan has been purchased for the benefit of dependant person with disability (Divyangjan) as specified in Para 9.iii below, the proposal shall be allowed without any restriction on minimum annuity and the minimum Purchase Price under such cases shall be shall be `50,000/-. In such cases, the annuity rates shall be applicable without any reduction factor as specified in Para 7.
If the plan has been purchased on exit by the subscribers of NPS regulated by the Pension Fund Regulatory and Development Authority (PFRDA) as specified in Para 9.ii below, the restriction on minimum annuity and the minimum Purchase Price shall be as per PFRDA Rules and Regulations as amended from time to time.
5. Mode of Annuity payment:
The modes of annuity available are yearly, half-yearly, quarterly, and monthly. The Annuity shall be payable in arrears i.e. the annuity payment shall be after 1 year, 6 months, 3 months and 1 month from the date of commencement of policy depending on whether the mode of annuity payment is Yearly, Half yearly, Quarterly and Monthly respectively.
6. Incentives:
The following incentives are available under this plan:
-
Incentive for Higher Purchase Price:
Incentive for higher purchase price by way of increase in the annuity rate is provided for four slabs of purchase price (i) ₹5,00,000 to ₹9,99,999 (ii) ₹10,00,000 to ₹24,99,999 (iii) ₹25,00,000 to ₹99,99,999 (iv) ₹1,00,00,000 and above.
The incentive for higher purchase price depends on the purchase price slab and on mode of annuity payments. The incentive increases as the purchase price moves from the lower slab to higher slab of the purchase price. The incentive also increases with the reduction in frequency of annuity payments.
-
Incentive for existing Policyholder and Nominee/ Beneficiary of the deceased Policyholder:
The Incentive by way of increase in Tabular Annuity Rate for different category of existing policyholders including the nominee or beneficiary of deceased policyholder provided the new policy is taken through any Agent/Corporate Agent/ Broker/ Insurance Marketing Firm/POSP-LI/CPSC-SPV under this plan shall be as under:
Category of Policyholder Incentive (%) In case an existing Policyholder having a policy with the Corporation which has matured within one year before the registration of proposal under this product and purchases this plan on his/her life and/or on the life of any of the family members;
Or
If this plan is purchased by Nominee/ Beneficiary of the deceased Policyholder of the Corporation where date of death is within one year before the registration of proposal under this product;
Or
If this plan is purchased by an existing Policyholder having an in-force policy with the Corporation.0.15% -
Incentive for Direct Sale:
For policies sold directly without any involvement of Agent/ Corporate Agent/Broker/ Insurance Marketing Firm/POSP-LI/CPSC-SPV, incentive by way of increase in the Tabular Annuity Rate shall be available to the annuitant as mentioned below:
SI. Category of Policyholder Incentive Purchase Price less than ₹10,00,000/- Purchase Price ₹10,00,000/- and above A. Online Sale – New Customer 2.00% 2.50% B. Online Sale – Existing Policyholder and Nominee/Beneficiary of the deceased Policyholder
Refer to Para 6.ii above for details and conditions regarding Existing Policyholder and Nominee/ Beneficiary of the deceased Policyholder.2.15% 2.50% C. QROPS 2.00% 2.50% D. NPS Subscribers 3.00% 3.00% Customer can opt for only one of incentives mentioned above i.e. either Online Sale- New Customer or Online Sale – Existing Policyholder and Nominee/Beneficiary of the deceased policyholder or QROPS or NPS Subscribers.
7. Reduction Factor for Purchase Price Less than ₹1,50,000/-:
For Purchase Price less than ₹1,50,000/-, annuity rates given under this plan shall be reduced with Reduction Factors.
Reduction factor is provided for two slabs of purchase price, first slab being ₹1,00,000 to ₹1,49,999 and second slab being less than ₹1,00,000. The reduction factor for the first slab is lower than for the second slab.
The Reduction Factor specified above shall not be applicable where the plan has been purchased for the benefit of dependent person with disability (Divyangjan).
8. Illustration:
| Annuity Option | Annuity Amount (₹) |
|---|---|
| Option A: Immediate Annuity for life | 91,100 |
| Option B: Immediate Annuity with guaranteed period of 5 years and life thereafter | 90,400 |
| Option C: Immediate Annuity with guaranteed period of 10 years and life thereafter | 88,600 |
| Option D: Immediate Annuity with guaranteed period of 15 years and life thereafter | 85,800 |
| Option E: Immediate Annuity with guaranteed period of 20 years and life thereafter | 82,300 |
| Option F: Immediate Annuity for life with return of Purchase Price | 67,700 |
| Option G: Immediate Annuity for life increasing at a simple rate of 3% p.a. | 73,700 |
| Option H: Joint Life Immediate Annuity for life with a provision for 50% of the annuity to the Secondary Annuitant on death of the Primary Annuitant | 83,800 |
| Option I: Joint Life Immediate Annuity for life with a provision for 100% of the annuity payable as long as one of the Annuitant survives | 77,600 |
| Option J: Joint Life Immediate Annuity for life with a provision for 100% of the annuity payable as long as one of the Annuitant survives and return of Purchase Price on death of last survivor | 66,900 |
For death benefit under above options, please refer to Para 3 above.
9. Options:
-
Options available for payment of Death Benefit:
Under the annuity options where the benefit is payable on death i.e. Option F and Option J, the Annuitant(s) will have to choose one of the following options for the payment of the death benefit to the nominee(s).The death claim amount shall then be paid to the nominee(s) as per the option exercised by the Annuitant(s) and no alteration whatsoever shall be allowed to be made by the nominee(s).
Lumpsum Death Benefit: Under this option the entire Purchase Price shall be payable to the nominee(s) in lumpsum.
Annuitisation of Death Benefit: Under this option the benefit amount payable on death i.e. Purchase Price shall be utilized for purchasing an Immediate Annuity from the Corporation for nominee(s). The annuity amount payable to the nominee(s) on the admission of death claim shall be based on the age of nominee(s) and immediate annuity rates prevailing as on the date of death of Annuitant (last survivor in case of Joint Life Annuity). This option can be opted for full or part of the benefit amount payable on death. However, the annuity payments for each nominee(s) shall be subject to the eligibility conditions of the annuity plan available at that time and then prevailing Regulatory provisions on the minimum limits for annuities.
-
In Installment: Under this option the benefit amount payable on death i.e. Purchase Price can be received in installments over the chosen period of 5 or 10 or 15 years instead of lumpsum amount. This option can be exercised for full or part of the Death Benefit payable under the policy. The amount opted by the Annuitant(s) (i.e. net claim amount) can be either in absolute value or as a percentage of the total claim proceeds payable.
The installments shall be paid in advance at yearly or half-yearly or quarterly or monthly intervals, as opted for, subject to minimum installment amount for different modes of payments being as under:
Mode of Installment Payment Minimum Installment Amount Monthly ₹5,000/- Quarterly ₹15,000/- Half-Yearly ₹25,000/- Yearly ₹50,000/- If the Net Claim Amount is less than the required amount to provide the minimum installment amount as per the option exercised by the Annuitant(s), the claim proceed shall be paid in lumpsum only.
For all the installment payment options commencing during the 12 months’ period from 1st May to 30th April, the interest rate applicable for arriving at the instalment amount shall be annual effective rate not lower than the 10 year semi-annual G-Sec rate Minus 200 basis points; where, the 10 year semi-annual G-Sec rate shall be as at last trading day of previous financial year.
Accordingly, for the 12 months’ period commencing from 1st May, 2024 to 30th April, 2025, the applicable interest rate for the calculation of installment amount shall be 5.07% p.a. effective.
-
Option to take Annuity by NPS subscriber:
The annuity options as allowed as per PFRDA Regulations shall be available to NPS subscribers.
If a Government Sector NPS subscriber purchases this plan as a Default Option, then Option J shall be available to the subscriber whose spouse is surviving on the date of purchase. Option F shall be available to the subscriber in the absence of his or her spouse. Thereafter on the death of subscriber and his or her spouse, the purchase price shall be used to purchase annuity Option F or J on the life of living dependant mother/father and shall be subject to the eligibility conditions of the annuity plan available at that time.
Subject to the specific Plan features, all other terms and condition including the Default Option applicable shall be as per the Rules, Regulations, Guidelines, and Circulars etc. issued by Pension Fund Regulatory and Development Authority (PFRDA) from time to time in this regard.
-
Option to take the Plan for the Benefit of Dependant Person with Disability (Divyangjan):
If the Proposer has a dependant person with disability (Divyangjan) , the plan can be purchased for the benefit of Divyangjan as Nominee/Secondary Annuitant, subject to minimum Purchase Price of ₹50,000/- without any limit on minimum annuity payment and minimum age at entry (for Divyangjan life), in following ways:
The Proposer can purchase Immediate Annuity with Return of Purchase Price (Option F) on own life. In case of death of the Annuitant (Proposer), the Death Benefit shall compulsorily be utilized to purchase Immediate Annuity (as per option chosen by the Annuitant) on the life of the Divyangjan.
The Proposer can purchase Joint Life Annuity (Option I or J) with Divyangjan as Secondary Annuitant.
For deciding the eligible disability of dependant person with disability (Divyangjan) as Nominee/Second Annuitant, as applicable, reference is to be made to meaning of “person with benchmark disability” as assigned to it in Section 2(r) of “The Rights of Persons with Disabilities Act, 2016” as amended from time to time or any other applicable Act in this regard.
10. Plan Purchased as QROPS:
This plan can be purchased as QROPS (Qualifying Recognized Overseas Pension Scheme), through transfer of UK tax relieved assets subject to listing and terms and conditions prescribed by HMRC (His Majesty Revenue & Customs) such as:
Minimum age shall be 55 years of age.
If the policy is cancelled during the Free Look Period, the proceeds from cancellation shall only be transferred back to the fund house from where the money was received.
Other terms and conditions of HMRC shall also apply as applicable from time to time.
11. Plan purchased through POSP-LI and CPSC-SPV:
This plan can be purchased through Point of Sales Persons-Life Insurance (POSP-LI) and Common Public Service Centers (CPSC-SPV). The annuity options allowed, eligibility conditions and other terms and conditions shall be as per the Guidelines, Circulars and Regulations etc. issued by the IRDAI applicable to POS Plans and POSP-LI.
Currently, the Plan Features/Parameters/Eligibility conditions are as follows:
12. Surrender Value:
Only under the following annuity options, the policy can be surrendered at any time after three months from the completion of policy (i.e. 3 months from the Date of issuance of policy) or after expiry of the free-look period, whichever is later:
The surrender value payable shall depend on the age (last birthday) of the Annuitant at the time of surrender of the policy.
If the chosen annuity option is other than specified above, surrender of policy shall not be allowed.
On the payment of the surrender value, the policy shall terminate and all other benefits shall cease.
The Surrender Value is reviewable and shall be determined by the Corporation from time to time subject to prior approval of IRDAI.
The Corporation may review conditions of surrender from time to time as per its policy in this regard.
In case of NPS or QROPS, the surrender provisions shall be further subject to any specific provisions regarding procedures as per Rules and Regulations of the respective Regulator/Authority (PFRDA/HMRC).
Note: The insurance policy being a long term contract should be taken from the long term perspective of continuing the policy. While there is provision for surrender under various annuity options mentioned above, it may be noted that there can be significant loss on surrender of a policy and hence, it is advisable to continue the policy.
13. Loan:
Loan facility shall be available at any time after three months from the completion of policy (i.e. 3 months from the date of issuance of policy) or after expiry of the free-look period, whichever is later, subject to terms and conditions as the Corporation may specify from time to time.
As per current provisions, policy loan shall be allowed under the following annuity options only:
The maximum amount of loan that can be granted under the policy shall be such that the effective annual interest amount payable on loan does not exceed 50% of the annual annuity amount and shall be subject to maximum of 80% of Surrender Value. Loan interest will be recovered from annuity amount payable under the policy. The loan outstanding shall be recovered from the claim proceeds at the time of exit.
The loan interest rate for all the loans commencing during the 12 months’ period from 1st May to 30th April, shall be annual effective rate not exceeding 10 year G-Sec rate p.a. compounding half-yearly plus 300 basis points. The 10 year G-Sec rate shall be as at last trading date of previous financial year. The calculated interest rate shall be applicable for full term of Loan.
For the loan sanctioned during the 12 months’ period commencing from 1st May, 2024 to 30th April, 2025, the applicable interest rate is 9.50% p.a. compounding half- yearly for entire term of the loan.
Any change in basis of determination of interest rate for policy loan shall be subject to prior approval of IRDAI.
14. Tax:
Statutory Taxes, if any, imposed on such insurance plans by the Government of India or any other constitutional Tax Authority of India shall be as per the Tax laws and the rate of tax as applicable from time to time.
The amount of any applicable taxes, as per the prevailing rates, shall be payable by the policyholder on Purchase Price payable under the policy, which shall be collected separately in addition to the Purchase Price payable by the policyholder. The amount of Tax paid shall not be considered for the calculation of benefits payable under the plan.
Regarding, Income tax benefits/implications on premium(s) paid and benefits payable under this plan, please consult your tax advisor for details.
15. Free Look Period:
If the Policyholder is not satisfied with the “Terms and Conditions” of the policy, the policy may be returned to the Corporation within 30 days from the date of receipt of the electronic or physical mode policy bond, whichever is earlier, stating the reasons for objections. On receipt of the same the Corporation shall cancel the policy and return the Purchase Price paid after deducting the charges for stamp duty and annuity paid, if any. The treatment of the policy shall be as below:
For Standalone Immediate Annuity Policies: The proceeds from cancellation shall be returned to the policyholder.
If the Policy is Purchased out of Proceeds of a deferred Pension Plan of any other Insurance Company: The proceeds from cancellation will be transferred back to that insurance company
In case of NPS or QROPS, the Free Look provisions shall be further subject to any specific provisions regarding procedures as per Rules and Regulations of the respective Regulator/Authority (PFRDA/HMRC).
No comments:
Post a Comment