LIC new pension plan- Jeevan Nidhi

LIC_new_jeevan_nidhi Pension Plan
LIC Jeevan Nidhi Pension

LIC Jeevan Nidhi is deferred Pension Plan is a conventional with profits pension plan which provides for death cover during the deferment period and offers annuity on survival to the date of vesting. Jeevan Nidhi has two phase - Accumulation Phase and Vesting Phase. In accumulation - the premium goes into the retirement corpus and in vesting the same retirement corpus will be used to buy annuity. Key Features of LIC Jeevan Nidhi: 

  1. It is good Pension Plan from LIC as it offers Risk Cover and Regular Annuity payments in a Single Plan.
  2. Guaranteed Additions @ Rs.50 per thousand for first 5 years.
  3. Reversionary Bonuses every year, from 6th year onwards plus
  4. Final Additional Bonus (if any).
  5. Good Plan for Professionals, Self Employed, Businessmen & Employees in unorganised sector.

Benefits Of LIC Jeevan Nidhi

Eligibility conditions and other restrictions in LIC Jeevan Nidhi Plan
Description Minimum Maximum
Sum Assured (Rs) 50,000 No limit
Policy Term (in years) 5 for Regular Premium 6 for Single Premium 35 years
Entry Age of Policyholder (in years) 18 years 65 years
Age at Vesting (in years) 40 years 75 years
Premium (in Rs.) 10,000 for Single 3000 for Regular No Limit
Payment modes Single, Yearly, Half-yearly, Quarterly, Monthly and SSS
Income Tax Benefit under section 80C : Life Insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable income each year under section 80C. The maturity benefit is tax free under section 10(10)D provided all conditions have been fulfilled. Death Benefit of Jeevan Nidhi:
  1. During first 5 policy years: If life assured passes away during the first 5 policy years, the amount payable will be equal to Sum Assured and guaranteed additions.
  2. Death after 5 years: If life assured passes away after first 5 policy years, the amount payable will be equal to Sum Assured, guaranteed additions and bonus.
Maturity Benefit of Jeevan Nidhi: The final maturity amount will be equivalent to sum of Sum Assured, guaranteed additions and bonuses. The maturity amount can be used in the following manners:
  • Buy immediate annuity from LIC to begin pension immediately. If the amount does not meet minimum policy requirements, balance lump sum amount will be paid to life assured.
  • Single premium deferred pension plan can be purchased.
Whatever option is required needs to be communicated 6 months prior to vesting. If you stop paying the Jeevan Nidhi premium: If premiums are not paid within the grace period then the policy will lapse. A lapsed policy can be revived from the date of first unpaid premium and before the date of vesting by paying all the arrears of premium together with interest within a period of five years, subject to submission of satisfactory evidence of continued insurability. The LIC reserves the right to accept at original terms, accept at revised terms or decline the revival of a discontinued policy. The revival of discontinued policy shall take effect only after the same is approved by the Corporation and is specifically communicated to the life assured. Accident Benefit Rider, if opted for, shall be revived along with the basic plan and not in isolation. Flexibility in Premium Payment Jeevan Nidhi: Both single and regular premium options are available in this pension plan. The payment mode available is yearly, semi-annual, quarterly and monthly. Guaranteed Additions: These are equal to Rs 50 per thousand Sum Assured which will be added during first five policy years. With Profits Plan: Bonus both reversionary which is based on performance of the company and terminal bonus which is loyalty bonus will be given by LIC. These will be added from 6th policy year onwards. Rebate for higher premium: For Sum Assured over and above Rs 300,000, one can get discount of 2% for regular premium policies and 5% for single premium policies. Additional Accidental Riders available with New Jeevan Nidhi? Accidental Benefit Rider can be opted for by paying extra nominal amount. Benefits Illustration of Jeevan Nidhi [caption id="attachment_516" align="aligncenter" width="212" caption="Benefit Illustration of Jeevan Nidhi"]New_jeevan_nidhi[/caption] Our Conclusion:  LIC New Jeevan Nidhi is a traditional endowment pension plan. It is a typical endowment plan with Sum Assured, guaranteed additions and bonuses as its final maturity amount. This traditional Pension plan will not be able to offer the best of returns. It is advisable to invest in higher return giving PPF or Mutual Funds as compared to investing in Jeevan Nidhi. After the policy period you will have to compulsorily buy annuity from LIC only.