Jeevan Akshay (specifically Jeevan Akshay VII, Plan 857) is a popular “Immediate Annuity” plan offered by the Life Insurance Corporation of India (LIC). Unlike standard insurance policies where you pay premiums for years and get money later, Jeevan Akshay works in reverse: you pay a lump sum amount once (Single Premium), and LIC starts paying you a regular pension (annuity) immediately—starting as early as the next month. It is designed for retirees who have a corpus of money and want a guaranteed regular income for the rest of their lives without the risk of market fluctuations.
Understanding what is Jeevan Akshay Policy is important for retirement planning. It provides financial security by converting your savings into a steady cash flow. The interest rate (annuity rate) is locked at the time of purchase, meaning your pension amount remains fixed for life, regardless of how interest rates change in the economy later.
What Does Jeevan Akshay Mean
“Jeevan” means Life and “Akshay” means Imperishable or Forever. Thus, it signifies a policy that provides income for a lifetime. It is a non-linked, non-participating, individual immediate annuity plan. You effectively buy a pension stream with your capital.
Why Jeevan Akshay is Important
Key features make it a go-to for Indian retirees:
- Guaranteed Income: The pension amount is guaranteed for life. No market risk.
- Immediate Payment: Pension starts immediately (monthly, quarterly, half-yearly, or yearly).
- Joint Life Option: You can take the policy for yourself and your spouse. If you die, your spouse continues to receive the pension.
- Return of Capital: In specific options (Option F), the lump sum money you paid is returned to your nominee after your death.
- Loan Facility: Liquidity is available via loans after 3 months of issuance.
Where is Jeevan Akshay Used
It is used as a retirement vehicle:
- Post-Retirement: Investing PF or Gratuity money to generate monthly household income.
- NPS Exit: NPS subscribers can use their corpus to buy this annuity plan upon maturity.
- Safety: For those who prefer the safety of a government-backed entity (LIC) over private mutual funds.
How to Find or Check Policy Status
Once you purchase the policy:
- Policy Bond: You receive a physical bond containing your LIC Policy Number.
- Online Portal: Register on licindia.in using the policy number.
- LIC App: Use the LIC Customer app to check annuity due dates and tax certificates.
Example of Jeevan Akshay Return
(Rates vary by age and current tables, this is an estimation)
If a 60-year-old invests Rs 10 Lakhs (Option F – Return of Purchase Price):
Annual Pension: Approx Rs 60,000 to Rs 65,000 (roughly 6-6.5%).
Benefit: He gets this amount every year till death. Upon death, the nominee gets back the Rs 10 Lakhs.
Common Problems or Errors
Investors often misunderstand:
- Lock-in: Once invested, you generally cannot withdraw the money (surrender) except in critical illness cases or specific options. Solution: Invest only that money which you don’t need for emergencies.
- Taxation: The pension received is taxable as per your income slab. Solution: Factor in tax liability when calculating returns.
- Inflation: The pension amount is fixed; it does not grow with inflation. Solution: Diversify your portfolio; don’t put 100% in annuity.
Important Things to Remember
- Minimum purchase price is Rs 1,00,000.
- Minimum entry age is 30 years; Maximum is 85 years.
- You must submit a Life Certificate (Jeevan Pramaan) annually to LIC to keep receiving the pension.
- Ensure your nominee details are correct for the return of capital.
FAQs
Is Jeevan Akshay pension tax-free?
No. The annuity (pension) payments you receive are treated as income and are taxable according to your Income Tax slab rates. However, the purchase price (premium) may be eligible for 80C deductions (up to 1.5 Lakh).
Can I surrender Jeevan Akshay policy?
Surrender is allowed only under specific annuity options (like Option F) and usually only if the annuitant is diagnosed with a critical illness specified by LIC. Otherwise, it is a locked product.
What is the interest rate of Jeevan Akshay?
The rate depends on the age of entry and the option chosen. Currently, it ranges between 6% to 7% for senior citizens (Option with Return of Purchase Price). The rate is fixed for life at the time of purchase.
Is the principal amount returned in Jeevan Akshay?
It depends on the option you choose. In “Option F” (Annuity for life with Return of Purchase Price), the principal is returned to the nominee. In “Option A” (Annuity for life), the pension is higher, but the principal is NOT returned.
Can I take a loan against Jeevan Akshay?
Yes, a loan facility is available under the policy after completion of 3 months from the date of issuance, subject to LIC’s terms and conditions.
For current rates, check the official LIC website at licindia.in.