Pension Calculator: Invest once in this LIC scheme and receive a pension for life..
Pension Calculator: Receiving a fixed monthly amount in your account after retirement offers great convenience. LIC’s Jeevan Akshay-VII scheme caters to this need. It requires a one-time investment, after which you receive a pension based on the chosen option.
This is an Immediate Annuity Plan from LIC, meaning annuity payments begin immediately after the investment is made. According to LIC, the annuity rate is fixed at the outset, and payments continue for a lifetime based on the selected option.
How much pension for an investment of ₹10 lakh?
Suppose you are 60 years old and invest ₹10 lakh in this scheme. LIC’s current V07 brochure provides examples of annual payments.
Under Option A, an investment of ₹10 lakh yields an annual annuity of ₹86,100—approximately ₹7,175 per month. Meanwhile, under Option F, the annual annuity is ₹64,000, or approximately ₹5,333 per month.
Option | Annual Annuity on ₹10 Lakh | Approx. Monthly Amount
--- | --- | ---
Option A | ₹86,100 | ₹7,175
Option B | ₹85,500 | ₹7,125
Option C | ₹84,000 | ₹7,000
Option D | ₹81,800 | ₹6,817
Option E | ₹79,200 | ₹6,600
Option F | ₹64,000 | ₹5,333
Option G | ₹68,700 | ₹5,725
These figures are based on LIC's examples for a purchase price of ₹10 lakh and annual payments starting at age 60. Under these options, the pension is payable for a lifetime. However, the annuity/pension received from LIC may be subject to tax according to your income tax slab. Multiple pension options available
This scheme offers more than just a single type of pension; LIC provides a total of 10 annuity options. Under Option A, a fixed amount is received for life. Options B, C, D, and E come with a guaranteed period of 5, 10, 15, or 20 years; the pension continues for the policyholder's lifetime even after this period ends.
Option F is slightly different. It provides a lifelong pension and includes a provision to refund the purchase price upon the policyholder's death. Consequently, the pension amount under this option is lower than in some of the other options.
One-time investment required
Jeevan Akshay-VII does not require regular premium payments; instead, a lump-sum amount is invested upfront. You can then choose your preferred pension payout method.
Pension payments can be received monthly, quarterly, half-yearly, or annually. As mentioned, the plan offers 10 distinct annuity options.
Options for spouses
If you wish for your spouse to continue receiving the pension after your demise, joint-life options are available. The annuity amount in these cases is determined based on the ages of both individuals and the chosen option.
LIC’s Options H and I include a provision for the pension to continue for the second person. Option J additionally provides for the refund of the purchase price after the death of the last surviving annuitant.
Option for a 3% annual pension increase
Under Option G, the pension increases by 3% annually on a simple interest basis. While the initial payout is lower than in some other options, the pension amount grows over time.
This can be advantageous for individuals expecting to receive the pension over a long period. However, it is important to compare the initial payout amount with that of other options before deciding.
Key takeaway
The scheme's standout feature is the guaranteed annuity. Regardless of market fluctuations, annuity payments continue according to the chosen option. It is, therefore, a suitable choice for those seeking a fixed income post-retirement. However, there is no facility to easily withdraw the money once a lump sum has been invested. Therefore, instead of investing your entire retirement savings in a single place, it is important to consider your needs and other sources of income.
Disclaimer: This content has been sourced and edited from Money Control. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
