LIC New Jeevan Nidhi

About LIC New Jeevan Nidhi

• A deferred pension plan wherein one receives annuity after a specific period of time
• Offers death cover during the deferment period
• Guaranteed addition bonus paid at 5% for first five years
• On maturity an individual has to re-invest into any other annuity / pension plan

How does LIC New Jeevan Nidhi work?

Under this plan, an individual can choose to pay premiums for a period (deferment period) anywhere between 5 to 35 years. During the deferment period he gets a life cover.  After the deferment period is over the individual gets a lumpsum (Basic sum assured+ guaranteed additions+ accrued bonus), but he has to re-invest it in one of the following;

• To purchase another single premium deferred LIC pension plan with a tax deduction of 3% on premium
• Collect 1/3 of the lumpsum  and the remaining to reinvest in any annuity/pension plan
• Purchase another LIC immediate life annuity with a tax deduction of 3% on premium

If incase  insured dies during the first five years of deferred term, then the nominee receives basic sum assured + guaranteed additions. Or if incase the insured dies after the first five years, then the nominee receives Sum assured+ guaranteed + accrued bonuses.

Let us understand this better by an example:

Age: 30 Years
Premium: Rs.1183/month
Premium Paying Term: 25 Years
Death Benefit – Rs. 5 Lakh + Guaranteed returns

Death benefit during first 5 years: Sum Assured + Guaranteed returns (Rs.625000)

Death benefit from 6^th year till 25^th year: Sum Assured + Guaranteed returns + Accrued bonus (Rs 625000+ Accrued bonus)

Survival Benefit: Sum Assured + Guaranteed additions +Accrued bonus= lumpsum (Rs.1290000)

This lumpsum can be re-used in any of the 3 ways:

• Purchase deferred single premium annuity plan
• Collect 4,30000+ opt for any LIC pension plan with the remaining Rs 860000
• Buy an immediate annuity  LIC pension plan using Rs 1290000

Consider,

Person’s age: 30 year
Deferment period: 25 years
Premium paying term: 25 years
Sum assured: Rs. 5 lakhs

30 year old person chooses a Basic sum of Rs. 5 lakhs and a deferment period of 25 years. 5% of the basic sum assured is paid as the guaranteed additions for the first five years and from 6^th year onwards bonuses are accumulated till the 25^th year. If the insured dies during the deferred term refer the box above to see the death benefit.

Once the deferred term is over the individual can choose either of the following options as he receives survival benefit:

Option 1: He can purchase a single deferred LIC pension plan using the survival benefit of Rs 12, 90,000

Option 2:  Collect Rs. 430000 of the survival benefit and the remaining Rs.860000 to reinvest in any annuity/pension plan

Option 3:  Purchase another LIC immediate life annuity 

Why should you buy LIC New Jeevan Nidhi plan?

• This plan provides fixed returns for first five years
• Offers pension options to suffice for income replacement needs
• There is a 3%  tax rebate provided on purchase of LIC annuity/pension plan under section 80C
• It’s helpful to secure retired life

Who should buy LIC New Jeevan Nllidhi plan?

• A person within the age of 20 to 60 years, who wants to set aside a sum of money to get a fixed income during retirement
• A person from the private sector who does not have employer pension and can depend on this plan to get regular income on retirement
• An individual who is about to retire within 5 to 7 years and wants extra income 

Riders & Add On

Accidental Death and Disability Rider: In this rider the nominee/ family receives the sum assured after the insured’s accidental death or dismemberment or permanent disability.