LIC launches new deferred annuity plan

State-owned Life Insurance Corporation (LIC) on Wednesday launched a new deferred annuity plan, which is a non-linked, non-participating, individual single premium plan. The annuity rates for the New Jeevan Shanti plan are guaranteed at the inception of the policy, and annuities are payable after the deferment period throughout the life of the annuitant, LIC said in a statement.

The plan, which can be bought offline and online from Wednesday, comes with two annuity options: Deferred annuity for single life, and deferred annuity for joint life. Under the deferred annuity for single life plan, the annuity payments shall be made in arrears for as long as the annuitant is alive after the deferment period and according to the chosen mode.

In case of unfortunate death, during or after the deferment period, death benefit will be payable to nominee of the annuitant. Under the deferred annuity for joint life, the annuity payments will be made in arrears for as long as the primary annuitant and/or the secondary annuitant is alive depending on the mode chosen and after the deferment period. On the death of the last survivor, during or after the deferment period, the death benefit will be payable to the nominee, LIC said.

The joint life annuity can be taken between any two lineal descendant/ascendant of a family (grandparent, parent, children, grandchildren) or spouse or siblings. The joint life plan can be bought at a minimum payment of Rs 1.5 lakh and can be paid yearly, half-yearly, quarterly, and monthly with the minimum annuity being Rs 12,000 per annum. There is no ceiling on the maximum purchase price though.

An incentive for a purchase price of Rs 5 lakh and above is available by way of an increase in the annuity rate. The plan is available for persons aged between 30 and 79. The minimum deferment period is one year and the maximum deferment period 12 years, subject to maximum vesting age of 80. The plan can also be purchased for the benefit of handicapped dependant with a minimum purchase price of Rs 50,000. LIC is also offering loan facility for this plan.

Source: Financial Express