LIC Jeevan Akshay VI – Immediate Annuity Plan

LIC has entered online insurance space but surprisingly with an Annuity Product; which as a category is not very popular in India. They have not launched a new plan but selling their LIC Jeevan Akhsay VI with some rebate on it.

What is Annuity?

Annuity is one of the options available to regular income seekers. With a mandate of providing a fixed income to members for life or the terms selected, life insurance companies offer annuity products to meet the desired need.

lic jeevan akshay VI2 LIC Jeevan Akshay VI   Immediate Annuity Plan

Any individual who is retired or nearing retirement does not have time to accumulate. With ready surplus available to invest, the need is to have regular income right from the next month or in a year’s time. Apart from savings scheme like Senior Citizen Saving Scheme (SCSS) or Post Office Monthly Income Scheme (POMIS), immediate annuity from life insurance companies is also available.

Annuity in India

Apart from LIC, which sell 95% of annuity products, pvt insurers like ICICI Pru Life, Tata AIG, Max New York and now Kotak Life insurance has immediate annuity products.

Recently, LIC started online selling of Jeevan Akshay VI, an immediate annuity product. This was a strong move from public insurer and may be followed by pvt players going forward..

Let’s review the product and see whether it is able to meet the income need of higher age population which is quite large in India.

What is Immediate Annuity?

In immediate annuity, by paying a lumpsum amount you purchase a stated income stream for life or a specified term from an insurance company as per the option you select. The income payment starts from the next periodic interval from the month you purchase it.

Features of Jeevan Akshay-VI

Who can buy?

Any person with minimum age of 30 years and maximum 85 years can purchase the product online. This can be considered attractive feature as it is not restricted to only higher age individuals and someone having a good surplus at young age can opt for the product to earn a steady income.

Premium

The premium is to be paid in a single installment and the minimum payment is Rs 1.5 lakh for online buy. There is no maximum limit in LIC Jeevan Akshay.

Payment Option

Annuity is paid monthly, quarterly, half early or annually. The first installment of annuity is payable after one month, three months, six months or one year from the date of purchase of annuity depending on the mode chosen is monthly, quarterly, half yearly or yearly respectively.

Annuity options

LIC offers seven annuity options under Jeevan akshay VI product:

  1. Annuity payable for life at a uniform rate.
  2. Annuity payable for 5, 10, 15 or 20 years certain and thereafter as long as the annuitant is alive.
  3. Annuity for life with return of purchase price on death of the annuitant.
  4. Annuity payable for life increasing at a simple rate of 3% p.a.
  5. Annuity for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
  6. Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
  7. Annuity for life with a provision of 100% of the annuity payable to spouse during his/ her life time on death of annuitant. The purchase price will be returned on the death of last survivor.

The policyholder can choose any of the option based on his requirements. However, once the option is selected it cannot be altered.

Annuity Rates

This is the most important factor as it decides whether annuity you receive will be sufficient to meet your requirements. As per LIC website the following is the annuity rates offered in Jeevan Akshay VI

Amount of annuity payable at yearly intervals which can be purchased for Rs. 1 lakh under different options is as under:

lic jeevan akshay 61 LIC Jeevan Akshay VI   Immediate Annuity Plan

Special Incentives if  you buy it online

There is a special incentive offered to online buyers in addition to what is offered in offline product. The basic annuity rate is more by 1% when you buy Jeevan Akshay VI online.

LIC Jeevan Akshay annuity Taxable

Annuities are added to your income and taxed as per your income tax slab.

What you Earn?

LIC Jeevan Akshay VI annuity rates vary under various options. Any option where the purchase price is not to be returned offers higher annuity in comparison to where there is joint annuity or purchase amount is returned to nominee. Also the higher is the age of the member higher will be the annuity received.

Given below are annuity rates in Jeevan Akshay VI which shows more annuity is offered then you buy it at higher age which emanates from the fact that company have less period to pay.

Age in Years Annuity rates (%)
40 6.93
45 6.96
50 7.00
55 7.05
60 7.11
65 7.18
70 7.26
75 7.36
80

 The annuity rates are for option with return of purchase prices (Source: moneylife)

Disadvantage of Annuity Products

The annuity rates have come down substantially with years. LIC who was the sole player in this market has reduced rates in Jeevan Akshay VI from what it offered previously. When you look at first instant then annuity rates of 7% is surely something to talk about. However, if your annuity amount is taxable then the returns lower down substantially and fall behind other investment option available. Someone who is at age of 60 and falls in 30% tax slab the returns from annuity will be approx 4-5%. This does not beat even the inflation. Also, annuities are fixed for the term while your income requirement keeps on increasing due to inflation. Although this product offer an option of 3% increase in annuity but inflation is more than double. So after a certain period the income from annuity may not meet even your basic needs if you have relied heavily on it.

Should you consider LIC Jeevan Akshay VI?

There have been regulatory changes in pension sector which has forced companies to rethink on pension products. Most of the private players do not market these due to tough environment. One of the primary reason is the absence of long term debt instruments where insurance companies can lock in rates to reduce interest rate risk and offer life-long annuity to people. The research has been also lacking in this sector due to which even LIC did not revised annuity rates for very long time. However, after IRDA specifying that annuity space would be from the same insurance company who sells the pension product,  SBI Life Insurance and Star Union DaiChi have launched immediate annuity products where rates are higher than LIC Jeevan Akshay. Expect more insurance players coming out with better rates or it may force even LIC to revise its rates. Hence, it will be good to compare other products and investment options along with your increasing requirement before you make any decision. Inflation and longevity risk are two devils which can spoil your retirement years if not considered.

Review of LIC Jeevan Akshay VI is done by Jitendra PS Solanki, CERTIFIED FINANCIAL PLANNERCM

If you have any questions related to annuity or pension products – feel free to ask.

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{ 77 comments… add one }

  • Manjunath May 21, 2012, 6:40 PM

    What is the second option ? can you clarify me?

    (Annuity payable for 5, 10, 15 or 20 years certain and thereafter as long as the annuitant is alive.)

    Second question is – Is the anuity rate will change in future or it is guranteed?

    • Jitendra Solanki May 22, 2012, 6:03 AM

      Manjunath,

      In the option annuity is fixed for the term decided. Even if annuitant dies during the term the company will pay keep paying the annuity till the term.Post this period annuity is paid only till annuitant is alive.

      Annuities are assured for the life.

  • pattu May 21, 2012, 6:55 PM

    Good one. If am not wrong we dont have inflation indexed annuities in India with the exception of govt pension where DA offered twice a year is linked to inflation. It may not be a bad idea to annuiatize about 40% of pension (say guarantee food on the table alone for life) and actively invest the rest and then progressively ladder the annuity as one becomes unable to manage money actively.

    Two aspects of personal finance post retirement is clear: It requires active management, likely more than what one did during employment.
    Professional help is crucial at this stage.

    As an emerging area of specialization only a few CFPs would have experience in advising retirees over extended periods of time, say 10 years. Looking for this experience may be important.

    • Jitendra Solanki May 22, 2012, 6:09 AM

      Pattu,

      Jeevan Akshay offers an option of 3% rise in annuity every year.Star Union Daichi offers 5% rise in annuity every year.But then annuity rates in both these options are too low. So the problem remains that we do not have annuity at present which can be linked to inflation.My guess is that the annuity market is going to improve in the future.

      Annuities today are more of supplement where you can have some basic needs covered through them and rest you have to look at other wiser options.Yes you are right in the aspect that today you have to do an active management by combining various options in your retirement.

  • Manikaran Singal May 21, 2012, 8:37 PM

    Nice review jitendra.
    Sometimes i wonder that when 10 year govt sec papers are at more than 8% , bank fixed deposit rates are at more than 9% , then how can someone advise a retiree to invest in such kind of product where the rates are in the range of 7%-7.5%. In this high inflated economy , even 9% is not looking enough , how would one survive on 7%.
    I totally agree with pattu saying
    “Two aspects of personal finance post retirement is clear: It requires active management, likely more than what one did during employment.
    Professional help is crucial at this stage.”

    • Ashok September 24, 2012, 5:56 PM

      This is the worst possible investment option. A bank FD is much better. Current rate is over 9% and on death, the nominee gets the principle amount and can then choose to continue. Interest can be credited Qrtrly / yrly etc. In LIC if you want the principle money back you have to accept a lower rate of return what kind of crap is that??? How can this be an investment option for a retiree?

      • Ashok May 24, 2014, 2:37 AM

        This is absolutely right, these annuity plans are basically a well marketed joke

  • Jitendra Solanki May 22, 2012, 6:14 AM

    Manikaran,

    Thanks.

    Yes, managing income post retirement is a crucial aspect where you requires active management. Annuities fails in many aspect for meeting retirement needs. But considering that insurance companies have taken a step in coming out with these products i am hoping that the rates will improve going forward.

  • Vivek K May 22, 2012, 2:36 PM

    Enjoyed reading and learning about annuity products. But I don’t think these are an attractive option at all. Bank FDs are much better option.
    This product needs more flexibility and much better returns in order to get some serious investors. Companies should look at inflation indexed annuities like Pattu mentioned.

  • ravi May 22, 2012, 5:49 PM

    how do you calculate rate of return when you consider the option of no return of purchase price (like option {i})

    my mother turns 80 next month. if i buy an annuity with 200000 , then she gets 3000/- per month approx. as long as she lives. if i invest the 200000 in a bank @ 9% , i can provide her with just 1500/- per month.

    is this calculation correct ?

    • Jitendra Solanki May 23, 2012, 11:01 AM

      Ravi,

      Annuities rates are higher when the age is more like your mother.This is due to the fact that companies assumes a longevity and the liability of paying till life is less that age. So at age 80 the rates can beat FD rates due to this reason.Hence, buying an annuity for your mother at this age may prove more beneficial.

      • Vimal July 12, 2012, 5:37 PM

        Let me first pray for a long life for your mother.

        If you want more monthly pension, add some more money and take an FD for 10 years from ICICI bank. They pay 10% so for 3 lacs, you can give your mother Rs2,500/- per month. and the sum remains with you, which on expiry of mother, will be inherited to you as taxfree asset from your mother.

        Did you liked this idea?

        • Lakki December 12, 2012, 12:28 PM

          This is infact a better idea. I like it.

    • Bhushan Sheth May 23, 2012, 3:22 PM

      Please note that in option (i), there is no return of capital.
      FD has return of capital.
      Your calculation of 3000 pm and 1500 pm is correct.
      But to calculate yield, you need end date, which in case of option (i) is not available. Unless, you want to assume longevity up to say age 85 or 90.

    • Sanket November 20, 2012, 2:57 PM

      No, calculation is wrong. 200000 as FD with interest rate of 9% p.a. it should be 15000 / month.

  • sunilk May 23, 2012, 1:37 PM

    Jitender

    I did not quite understand ravi’s calculatuon for mother gettign 3000 pm on 200000 annuity buy?? I have similar situation with mother so thinking to go for?

    • ravi May 23, 2012, 10:39 PM

      sunilk – the annuity amount for 100000 is 17880 for a person of 80 years. this is under option (i)
      so for 200000 , the annuity will be 17880 x 2 = 36760/- per year
      36760 / 12 ~ 3000/- per month

    • Jitendra Solanki May 24, 2012, 7:11 AM

      Sunil,

      The look at the annuity table in the article where Rs 17880 is the yearly pension for Rs 2 lakh.Now double it for Rs 2 lakh and it will give you the figure what Ravi has calculated.That’s the monthly pension his mother will receive for life and when she dies nothing is returned.

      • N.M.R.Shreedhar July 16, 2012, 7:52 PM

        Ravi,
        as Jitendra correctly mentioned , in this case you don’t get any amount on the death of your mother unlike the bank FD which returns your principal at maturity. So, financially speaking,to recover the amount of Rs2L invested today in LIC jeevan akshay your mother should be alive till 87 years, (assumed discount rate of 7.5%) –excuse me for being so blunt,please. Maybe better to invest in a good diversified equity MF and do a systematic withdrawal of Rs3000 p.m.

  • Bhushan Sheth May 23, 2012, 3:25 PM

    I believe the author has missed out on mentioning benefits of investing larger amounts. For example, for 40 year old investing 1 Cr under option (iii), annuity rate increases from 6.93% to 7.33%.

    Now for those comparing it with FD, please understand that FD has a limited tenure, maximum 10 yrs. Renewal of FD after 10yrs will not be at same rate.

    Annuity rate is fixed for life. For someone aged 40, we are looking at possibly 40 years of annuity period. Which other instrument can offer guarantee for 40 yrs ? NONE.

    It has its limitations, but does not mean its useless !

    • Jitendra Solanki May 24, 2012, 7:21 AM

      Bhushan,

      I think in the article nowhere it is mentioned that Annuity is a useless product. It has its advantages and disadvantages.On Rs 1 crore as you are mentioning, the annuity which a 40 year old will receive is surely going to be taxable.Now if he falls in highest tax slab, the post tax returns on 7.33% falls to approx 5% on a simple mathematics.And this annuity is fixed i.e. does not increase with inflation. So after 10 years your annuity income fall short of your requirements which has increased due to inflation.
      If annuity has been tax free or there has been products which were inflation indexed then surely the annuity products would have been considerable.But in today’s scenario relying on these fully for your income requirement for life may not be a viable option.As i said in article it can be looked as supplement with other products if you have the needed surplus.

      I hope this clears your doubt.

  • prakash May 23, 2012, 4:43 PM

    Pricing annuity products is a big challenge globally because of the longetivity risk.We have an added problem in India due to absence of long term debt products so reinvestment risk is faced by the Insurance Companies.Further IRDA investment regulations does not give any scope for risk taking by Fund Managers so as to generate higher return.Funds has to be invested in Govt Securities and AA rated instruments.So the Companies can generate say 9% ,out of which expenses of 2% gone.So returns are around 7%.
    Even Bank FD can not beat inflation.But the depositors bears the reinvestment risk where as in Annuity the Companies bears it.This is a plus for annuity buyers.By active management through debt instruments,u can save 2%i.e expenses charged by Companies.If you still want better, take the help of a Professional Financial Planner.

    • Jitendra Solanki May 24, 2012, 7:29 AM

      You are right Prakash. Its the absence of long maturity debt products and some stringent regulations which force companies to price the products so higher.
      So one has to look at mix of products to meet the requirement today.Hopefully the market will evolve and we will see more such products with better rates with SBI Life and private players joining the race and IRDA shifting the annuity burden from LIC to other players.

  • Deepak R Khemani May 25, 2012, 8:07 PM

    What many people do not know is that LIC’s first Jeevan Akshay came with an ASSURED return of 12%, the FD rates in those days were around 14-15%, you read it right 15%, if anyone would have taken the argument of FD v/s Annuity then, he would never have put any money in Jeevan Akshay and when the Bank interest rates went to 5% in 2003-2005, it was these people who bought it then, who were smiling all the way to the bank, BTW they are still receiving 12 % today, as it is assured for life with return of purchase price to the nominee.
    So an annuity is life time product, PLEASE do not compare it with bank FD’s for eternity, part of you money should be in a product like this, part should be in Bank FD’s and similar products as they also have the liquidity aspect, you should NEVER put all your money in a single product especially one where premature withdrawal is not allowed

  • Hemanth May 28, 2012, 3:12 PM

    Hi,
    New to this website .. Couple of questions
    1. I have LIC Endowment policy which is 5+ years old and premium amount is around 35k which recently i cam to know its not worth of investment. Should i convert this policy to ‘Paid UP’ or surrender it?
    2. I have other LIC ULIP policy which is also 5+ years, should I surrender it off?

    Planning to buy ‘TERM POLICY” please suggest which is better off.

    With Regards,
    Hemanth

  • Manish June 13, 2012, 7:43 PM

    Dear hemant hemant sir has already written the arcticle on this u should read this http://www.tflguide.com/2010/02/exit-strategies-for-mis-sold-insurance-policies.html.for term insurance u can opt for any plan from companies like lic anmol jeevan,amulya jeevan apart from this online term plans are very cheap like icici pru I care,hdfc life click to protect.hope this ll help u.

  • sarvan July 10, 2012, 11:58 AM

    My age is 31. I want to invest 30,00,000 in Jeevan Akshay VI immediate annuity (option 4) with increase of 3% every year. According to the new online plan including the higher incentives, If i go for this online policy, how much exactly will i get initially monthly?

    • Jitendra Solanki July 20, 2012, 2:45 PM

      Dear sarvan

      Going by the annuity table, you will receive approx Rs 1.57 lakh annually.Haven’t considered the rebate of 1% here.

  • Syd July 29, 2012, 5:27 PM

    I am 38 and want to transfer my UK pension fund to LIC’s Jeevan Akshay 6 (option 7). Is this permitted under current rules? For a fund of about 50 lacs, what benefits am I looking at? thank you.

    • Bhushan Sheth July 30, 2012, 1:40 PM

      From my understanding, if by transfer you mean – some transfer from UK authorities to LIC, it cant be done. You would have to encash UK pension fund and make lump sum payment to LIC. Please note that pension would be paid in INR only. It will be added to your income, and therefore would be taxable. Pension should be about 3,65,750 pa.

      • MM December 10, 2012, 4:01 PM

        Hi Syd,

        To transfer UK pension fund to India, you need a policy that is qualified under QROPS (google it). Now, there are many in the market but when you approach those providers in India, they are simply not aware. I literally had to show them on the internet that it could be done. The only provider that is actively aware and is in fact seeking such funds was ING Life insurance New Best Years policy and they did the transfer for me in under 2 months.

        Granted that ING New Best years is quite expensive (its effectively a pension policy with a vesting date and then annuity, charges about 3-4% in AMC, charges etc) but at the time I was looking, I met all the leading insurers who were listed under QROPS and ING was the only one that knew actively how to do it.

  • Krishna Kumar August 9, 2012, 8:58 PM

    Syd, Bhushan.

    I believe transfer of UK pension to LIC can be done through QROPS of UK. Please refer to http://www.liciuk.com/site/pdf/QROPS.pdf

    So coming abck to Syd’s question, could you provide more information as I also wish to do the same. Thank you.

  • Aravindakshan September 1, 2012, 11:05 AM

    Not at all attractive…. Why can’t they put the amount in Fixed Deposit and earn at least 9% interest monthly ?

  • Jees Lazar September 18, 2012, 4:41 PM

    When you talk about transfer of your UK fund, you have to go through QROPS system and there is no option of closing the UK pension fund and investing it in anything you like. So, you only have limited options under UK HRMS schemes to transfer.

  • Santos September 22, 2012, 11:26 AM

    Hey Mr. Hemant,

    Where did you find the info that SBI Life offers better returns than JA VI?? From what i see from their site is not true. SBI life says for 60 yr old person the annuity for life is 6761 whereas your table shows it as 9350. Do you have any inherent problem with LIC that you almost always write negative about it?

    I really don’t understand !!!

  • Kalyanaraman October 11, 2012, 3:32 PM

    Unfortunately there is no mention about income tax benefits one gets if you purchase Jeevan Akshay VI policy. Suppose I purchase a ploicy of Rs `1 Lakh can take this 1 Lakh as it is for my income tax benefits. That is,. can I get Rs 30000 benefit if I am in 30 % tax bracet ?

  • Adlai October 25, 2012, 9:42 PM

    I just turned sixty. If I invest Rs. 500000/- in Jeevan Akshay VI what amount will I get if I opt for monthly returns, and when I conk off will the principal be paid to my nominee? Also what are the tax implications???

    Thank you,

    Adlai

    • Jitendra P.S.Solanki November 23, 2012, 1:05 PM

      Dear Mr. Adlai,

      You can refer to the table from the article which give you rates for different options.

      The annuity you will receive will be added to your income and taxed accordingly.

  • p.p.singh November 2, 2012, 4:05 PM

    I have taken HDFC unit liked pension plan. Maturity Time due , I have to invest in 67% in annuity. Pl advise best annuity scheme with their monthly return. My age is about 63 years. My one time investment is 1,50,000/-.

    • Jitendra P.S.Solanki November 23, 2012, 1:01 PM

      Dear Mr.Singh,

      Apart from Jeevan Akshay, Star Union Daichi life Insurance has comparable returns. You can consider either of these.

  • jyoti sinha November 8, 2012, 4:26 PM

    sir I want to buy this lic policy my monthly income is 7500 only i want to invest some money and increase my monthly income

  • KironBose November 17, 2012, 10:56 PM

    Dear Solanki,
    I want to get Rs 30,000 pension ,please advise where & how much should I invest to get a monthly pension of this amount with 3% increase every year .I am 56 years of age & non resident Indian planing to return.I intend to get a pension from 2014 .Thanks

  • KironBose November 17, 2012, 11:03 PM

    Dear Solanki,
    Appreciate if you could advise me on the following
    1) I am a NRI looking forward to coming back .I want to get Rs 30,000 monthly pension ,starting 2014 .
    Please advise me what are the most risk free schemes I can invest in to get that amount & I am looking for a 3% increase yearly .I understand that Jeevan akshay is good what about other schemes available.
    Thanks

    • Jitendra P.S.Solanki November 23, 2012, 1:00 PM

      Dear Kiron,

      Its essential that your money also grows in the long term to sustain the income you desire.For this some amount of equity exposure will be good. You can consider debt mutual funds along with having some amount invested in equity through balanced mutual funds. Alternatively, Monthly income plans in debt funds have some equity exposure and they give periodic dividends. However, the dividends is not assured but there are god schemes who have been consistent.

      Regards

  • SHIV KUMAR December 11, 2012, 11:34 AM

    Hello Sir,

    i m 27 year old i want to invest 2,00,000 in jeevan akshay vi online policy
    & i want monthy income immidiately after investment

    Please confirm how much i return

    Best Regards
    Shiv kumar

    • Vikas May 12, 2013, 12:13 PM

      Hi Shiv,

      Minimum age for the product is 30 years. Longer the payout for the company lower the returns. So at your age you may have the lowest returns. evaluate other alternatives too where you can also have the growth of your investment also such as SWP in debt mutual funds.

  • Neethu December 17, 2012, 11:48 AM

    Hi,

    I like thank you for details

    Could you please clarify the below details

    1. What is difference between Fixed deposit and LIC Jeevan Akshay VI – Immediate Annuity Plan if I need monthly payments
    2. Which one will get higher returns(Fized deposit with monthly interest and Jeevan Akshay VI – Immediate Annuity Plan)
    3. Is the return tax free for Jeevan Akshay VI – Immediate Annuity Plan
    4. How long will I get pension with this LIC scheme?
    5. After my death how much amount my nominess will get? its same lupsum amount I paid initially?

    Thanks in advance for your support :)

    • Vikas May 12, 2013, 12:34 PM

      Hi Neethu,

      1. From the point of taxability both are taxable by adding to your income. But a Fixed Deposit is for a specific tenure and you generally don’t have a monthly payout. Annuity is a series of payment , can be monthly also, and have a lifetime option. The other difference is the payout rare which is based on age of person in case of annuities.So at higher age you have higher payout. FD is a fixed interest option for every individual.
      2.As i said Annuity returns vary with age. So you need to check rates at your age and then evaluate options.
      3.No annuities are taxable.
      4.You have multiple options from which you can choose.
      5. If you have opted for then nominee will get lumpsum. You have options of annuity to spouse after death or only annuity to you for lifetime.Again the rates will vary as per the options.

      I hope this clarifies your doubts.

  • sram December 17, 2012, 7:09 PM

    An agent explained me that Max Life Partner Plus Insurance Policy is best ever policy, can any one please guide me , that shall I go for it or not. My age is 36 years. Premium is 72,300 per year.

    Thanks in advance.

    • Jitendra P.S.Solanki March 1, 2014, 11:22 AM

      Sram,

      The pension plans have not been a wiser option considering the high cost associated and after IRDA changes even companies have not been interested enough. There is no best ever policy and unless you earn a decent returns on your accumulation you won’t be able to accumulate a good corpus. Mutual funds would be more wiser option or accumulating money for your retirement income.

  • Shankar M K March 22, 2013, 8:48 PM

    Return on investment in LIC Jeevan Akshay is not attractive as in banks. Particularly for bank employees. As of now I am getting 10.85 % on FD invested by me(9.35 % +1 %[For ex staff]+0.50 % for Senior citizens) with entire amount returnable on maturity( years). In LIC 7.01 %, that is a difference of 3.84 % which works out to nearly Rs 4,480.00 per month on a FD of Rs 14 lakhs)
    In my opinion, any investment less than 9 % tax free return is of no use to Senior citizens, particularly for those who do not have any pension scheme.

    • Jitendra P.S.Solanki March 1, 2014, 11:50 AM

      Dear Mr. Shankar,

      Yes Prima Facie FD is yielding you higher returns. But every investment has its own characteristics. FD returns will lower down with fall in interest rates and it is not a lifetime income. Then you will have to consider other options. On other hand Annuity income is lower but is a lifetime income. However, both are taxable and so someone with taxable income will have to consider more options. Its difficult to meet all needs with a single investment avenue. One has to consider combination of options to ensure the longevity risk can be taken care.

  • Dinesh April 8, 2013, 6:40 PM

    I am 54 year old.
    I want Rs. 20,000 per month. I am not in tax bracket. So how much & where to invest ? which is the best option.
    Your guidence will be very helpful to me in investment.
    Thanking you.

    • Jitendra P.S.Solanki March 1, 2014, 4:00 PM

      Mr.Dinesh,

      It will be difficult to count any single option for generating this income. The amount of corpus you need to invest should be based on a calculation which take inflation into consideration and a time horizon. It may be easy to identify in the Annuity product (It may be 25-30 lakh for this income) as the amount is same for lifetime cause there is no inflation indexation. But ideally there should be a mix of options with some giving your investment a growth while few earn you a fixed income.

  • Vaibhav May 9, 2013, 8:43 PM

    Dear Mr. Singh,
    Thanks for the explanation and calculations. I have a question.
    Can we combine options on this policy? I would like to combine option 3 and 7. Is it possible?

  • Supriyo June 11, 2013, 11:25 AM

    I am year old.
    I want to invest Rs. 1,00,000/- one time for pension. i am working private secotr and i am not in tax bracket.
    Your guidence will be very helpful to me in investment.
    Thanking you.

  • khan August 31, 2013, 5:56 PM

    Dear expert,
    I am planning to buy a JA IV for my mother.she is 58 years.I want her to get 6000 a month.She dooesnt fall under tax bracket.Can you tell me how much should i invest to get the same.

    • Jitendra P.S.Solanki March 1, 2014, 4:13 PM

      Khan,

      You may need Rs 8-10 lakh for meeting this income need. Actual amount will be based on the option you choose.

  • P N JETHANI November 16, 2013, 6:58 PM

    Sir,I had taken ICICI Pru Life Time Super Pension Plan in the month March 2007
    for 10 years term.I had paid 3 premiums of 100000/-each. My policy is in force.
    I have to intrest in 67% in annuity.Please advise best annuity scheme with their
    max monthly return & which option will be more suitable.My DOB is 05/11/1942
    My total investment is 300000/-.
    Your guidance will be very helpful to me in investment.
    Please send your comments via e-mail ([email protected])

  • U K Karmarkar November 28, 2013, 12:37 PM

    I am already Annuity Plan member.Whether this year I have to submit “LIFE CERTIFICATE?”Hope to receive answer. Thanks

  • kiran November 30, 2013, 9:38 PM

    my father age is 65 and he is not employee and not having income and i am presently doing private job and i have 1lac rupees can this plan benefit for my father

    • Jitendra P.S.Solanki March 1, 2014, 4:25 PM

      Kiran,

      The plan can give a monthly income to your father. The amount of income you can get from the table. But you need to take into consideration that the income will be same throughout and if your father income needs increases in future due to inflation, this may fall short. Look at other alternatives and hen decide.

    • ironbox March 8, 2014, 4:51 AM

      Open a post office Monthly scheme where he will get Rs 700/- per month with principal back. Another is eAnnuity of SBI where for 10 yrs he will get Rs 1265.15 per month.

  • Ravi December 27, 2013, 9:18 PM

    My wife age is 38 yrs, i would like to invest 10 lakhs, how much she gets in 60 years old onwards? Please advice

    • Jitendra P.S.Solanki April 3, 2014, 12:34 PM

      Ravi,

      The amount of pension your spouse will receive will be based on how much the investible surplus grows. Since there is almost 22 year when she reach that age, you need to invest this surplus wisely. On reaching the age you will then have to evaluate options for generating the required income. This can be mixed of variable or fixed instruments based on what options are available during that period.

  • ironbox March 8, 2014, 4:45 AM

    As a thumb rule remember PO MIS gives Rs 700/- per month for Rs.1,00,000 deposit(Rs.8400 per yr). All pension plans are near this only. And you get ur principal on death.

  • Soibam Iboyaima Singh March 8, 2014, 9:25 AM

    I would like to know that how much amount is required to purchase this pension plan under option VII in order to get annuity Rs 40000/- per month.

    • Jitendra P.S.Solanki April 3, 2014, 12:44 PM

      Soibam,

      For this much annuity you will require approx Rs 70-80 lakh. The actual amount will be based on the age of pension holder as the annuity varies accordingly.

  • shyam kumar March 16, 2014, 10:44 AM

    Dear sir, i’m shyam kumar, 31 years old. if i invest 2 lacks in Jeevan Akshay VI, how much amount i will get, if i opt for annuity pay. could you please provide details. please suggest best suitable plan for my age. my annual earnings are 5 LPA

    • Jitendra P.S.Solanki April 3, 2014, 1:18 PM

      Shyam,

      At your age you may not get a very good amount since annuity rates are lower at younger age. The surplus you have should be utilized for your goals effectively for which you will have to identify them first. You should take the help of a financial planner to work on your requirement.

  • vanessa April 24, 2014, 11:44 PM

    Dear sir
    I’m 33 years right now, I am thinking of investing upto2 lakhs in this plan.
    But I’m unsure if this plan will benefit me as a retirement plan. I would like a plan where I get yearly or monthly returns after 20 or 30 years Please advise me if LIC has any particular policies which would suit my requirements. I’m a bit wary of private companies.

    • Jitendra P.S.Solanki June 6, 2014, 5:05 PM

      Vanessa,

      The requirement you have illustrated would have been met by pension plans. But unfortunately they are not an ideal product to invest due to many disadvantages. A wiser approach will be to accumulate corpus for your retirement through mutual funds and when you reach the target goal you can consider options for generating the income you need.

  • sourabh June 13, 2014, 11:18 AM

    Hi Jitendra,

    For a retired individual, who intends to invest a sum of Rs 20lakhs. Which is a better option-
    1. Fixed Deposit
    2. Immidiate annunity plans like Jeevan Akshay.

    For a period of 10 years which would give higer returns, considering the taxation aspect as well.

  • Jitendra P.S.Solanki June 29, 2014, 11:41 AM

    Sourabh,

    In both these investment the return you receive is taxable. However, in a fixed deposit senior citizens are offered an additional interest. Which will be more beneficial will depend on what rate you receive in fixed deposit. In current scenario the interest rate in fixed deposit for senior citizens is good enough. But FD may not give you monthly payout.
    So look at the rates offered in FD and then you can compare easily which is yielding you more.

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