LIC Jeevan Akshay VII (Plan 857) is an immediate annuity plan by LIC that provides annuity starting immediately to the policyholder on payment of a one-time lumpsum amount.
If you want to know more about this LIC Jeevan Akshay VII Review (2023) article, then you will get to know all the LIC Jeevan Akshay VII Plan Details and LIC Jeevan Akshay VII Policy Benefits here. We will also see how to arrive at Jeevan Akshay annuity rates using LIC Jeevan Akshay 7 Pension Plan Calculator.
LIC had launched this non-linked, non-participating, policy named Jeevan Akshay VII (LIC Table No. 857) first time in 2020, and then had revised the plan a total of 4 times across following versions – Plan UIN 512N337V01 was available from 2020 to Feb-2022. The UIN 512N337V02 was available from Feb-2022 to Aug-2022. The third UIN 512N337V03 was available from Aug-2022 to Feb-2023.
And finally the latest Jeevan Akshay VII product UIN 512N337V04 has been available for investment since 28-February-2023 after some revision in Jeevan Akshay 7 Interest Rate in 2023.
LIC Website link to Policy page – Link
Many investors buy annuity products to generate an income stream during retirement years or whenever they get some lumpsum money and wish to replace their salary income (generally post retirement).
Let’s see the features now.
Benefits of LIC Jeevan Akshay VII (857)
Let’s see what are the LIC Jeevan Akshay Policy Benefits. Here are the plan details and prominent features:
- This is an Immediate Annuity product that comes under LIC Table No. 857
- What this means simply is that you need to pay a lumpsum amount one-time and LIC will start paying you regular pension. The pension payment starts immediately on the purchase of the policy. And the insurer will pay you this pension for life.
- The minimum investment in LIC Plan 857 is Rs 1 lakh.
- There is no upper limit for the maximum investment amount.
- One can purchase this plan at Minimum Entry Age of 30 years and up to a Maximum Entry Age of 85 years (or 100 years for one of the Variants F).
- There is the option for 25-29 years old to purchase this plan as well but in such cases, the minimum purchase price will be Rs 10 lakh.
- Since this is a immediate annuity plan, where the premium is to be paid in full and upfront, the Premium Payment Frequency therefore is One-Time Single Premium Payment as you pay the premium just once.
- So it is Pay-Once-Enjoy-Forever kind of an annuity plan. So if you plan to purchase this policy after having a look at the latest LIC Jeevan Akshay 7 Interest Rate 2023, then you can read this post further to see how LIC uses Jeevan Akshay 7 Pension Plan Calculator to provide indications of LIC Jeevan Akshay Annuity Rates at which one can generate pension income from this policy.
- How often will you get the annuity (pension) income? The annuity payment frequency can be chosen from options – Monthly, Quarterly, Half-yearly, Annual.
- All the annuity income is fully taxable and taxed as per policyholder’s income tax slab rates.
- At the time of purchase initially, you are eligible for tax benefit on the investment amount, but only up to Rs 1.5 lakh the under the Section 80CCC (and within the overall limit of Rs 1.5 lakh of Section 80C).
- The plan can be purchased offline via LIC office/agent as well as online on LIC website. Unsurprisingly and to push digital mode, there is a rebate for online purchases of the policy. This means that for the same investment amount you will get a slightly higher annuity income. In addition, this plan can also be purchased from the new distribution channel Common Public Service Centres (CPSC – SPV) as per the latest press release.
- If you are looking to exit from NPS and need to mandatorily invest in an annuity product for a minimum of 40% of the NPS corpus, then you can purchase LIC Jeevan Akshay VII as it is one of the NPS approved annuity plans provided by LIC, which itself is a NPS approved ASP or Annuity Service Provider.
- There are no riders available under the LIC Jeevan Akshay 7 plan.
- You don’t need to undergo any medical tests to purchase this plan.
- You can also buy more than one LIC Jeevan Akshay VII policies in your name if you want.
Now let’s discuss the most important feature – Annuity options available under LIC Jeevan Akshay VII plan.
LIC Jeevan Akshay VII Plan’s 10 Annuity Options (2023)
Yes. That’s correct – this LIC Plan 857 offers 10 different kinds of immediate annuity variants or options to policyholder to choose from. Remember that the annuity or pension amount is a taxable income.
Note – If you are not sure about the difference between Immediate Annuity and Deferred Annuity Plan like LIC New Jeevan Shanti review, then here is a short explainer. In immediate annuity, the annuity payment starts immediately after payment of the lumpsum investment. On the other hand, in a deferred annuity product, you defer the annuity payments for a few years and the payments start at the end of the deferment period.
Once you decide to purchase or invest in LIC Jeevan Akshay, you need to make a one-time, lumpsum payment upfront. To understand more about the LIC Jeevan Akshay VII Plan Details, you as a policyholder can then choose any of the 10 available annuity options discussed below:
- LIC Jeevan Akshay-VII Annuity Option A – Immediate Annuity payable for life at a uniform rate. After annuitant, nothing will be payable upon the death of the annuitant, and the annuity payment shall end immediately.
- LIC Jeevan Akshay-VII Annuity Option B – Immediate Annuity payable for a guaranteed period of 5 certain and thereafter as long as the annuitant is alive. What this means is that the plan will continue to pay the annuity for the guaranteed period of 5 years, even in case of demise of the annuitant during the guaranteed period. In such a case, the annuity will be paid to the nominee.
- LIC Jeevan Akshay-VII Annuity Option C – Immediate Annuity payable for a guaranteed period of 10 years and thereafter till the annuitant is alive. What this means is that the plan will continue to pay the annuity for the guaranteed period of 10 years, even in case of demise of the annuitant during the guaranteed period. In such a case, the annuity will be paid to the nominee.
- LIC Jeevan Akshay-VII Annuity Option D – Immediate Annuity payable for a guaranteed period of 15 years and thereafter till the annuitant is alive. What this means is that the plan will continue to pay the annuity for the guaranteed period of 15 years, even in case of demise of the annuitant during the guaranteed period. In such a case, the annuity will be paid to the nominee.
- LIC Jeevan Akshay-VII Annuity Option E – Immediate Annuity payable for a guaranteed period of 20 years and thereafter till the annuitant is alive. What this means is that the plan will continue to pay the annuity for the guaranteed period of 20 years, even in case of demise of the annuitant during the guaranteed period. In such a case, the annuity will be paid to the nominee.
- LIC Jeevan Akshay-VII Annuity Option F – Immediate Annuity for life with return of purchase price on death of the annuitant. So if the annuitant passes away, the annuity payment will stop immediately and the Purchase Price (or originally invested amount) will be paid to the nominees.
- LIC Jeevan Akshay-VII Annuity Option G – Immediate Annuity payable for life increasing at a simple rate of 3% per year. That is, for each completed policy year, the annuity payment will be increased at a simple rate of 3% per year.
- LIC Jeevan Akshay-VII Annuity Option H – Immediate Joint Life Annuity for life with a provision of 50% of the annuity payable to the spouse (or secondary annuitant) during his/her lifetime on death of the primary annuitant
- LIC Jeevan Akshay-VII Annuity Option I – Immediate Joint Life Annuity for life with a provision of 100% of the annuity payable to the spouse (or secondary annuitant) during his/her lifetime on death of the primary annuitant
- LIC Jeevan Akshay-VII Annuity Option J – Immediate Joint Life Annuity for life with a provision of 100% of the annuity payable to the spouse (or secondary annuitant) during his/her lifetime on death of the primary annuitant. In addition, the purchase price (or original investment) to be returned on the death of the last survivor.
Do remember that the option chosen at the start of the LIC Table No. 857 policy is final and binding and cannot be changed later on. In the same way, the Annuity rates are decided and fixed and guaranteed at the beginning of the policy and remain the same. The annuity plan will then provide regular annuity payments of the calculated amount throughout the life time of the annuitant.
Sidenote – There is another simpler immediate annuity plan from LIC named LIC Saral Pension with just 2 ooptions to choose from. So those who want simplicity can also look at that plan – LIC Saral Pension Review.
Let’s say you buy a LIC annuity plan for Rs 20 lakh that offers annuity rate is 6% per annum. In this case, you will get an annuity income of Rs 1.2 lakh per year or Rs 10,000 per month for life. The annuity rate for your plan is fixed at 6% for life irrespective of whether it increases or decreases in later years for new buyers.
The annuity can be paid either at monthly, quarterly, half yearly or yearly intervals.
Ref: LIC Jeevan Akshay 7 Policy document & wordings.
LIC Jeevan Akshay VII Plan Annuity Rates (2023)
The major LIC Jeevan Akshay VII Policy Benefits or the annuity rate of LIC Jeevan Akshay plan you buy will depend on the policyholder’s age at the time of purchase and the and chosen annuity variant from the 10 available options. Generally, the annuity rates tend to increase with age. So, you will get higher rates if you buy a policy at age 65 versus what you will get when you buy at age 45.
To find out the LIC Jeevan Akshay 7 Interest Rate 2023 or the latest annuity rates of LIC’s Jeevan Akshay VII (Plan No. 857, UIN : 512N337V04), I decided to use the LIC Online Premium Calculator on the website’s sales page (link) as the latest annuity rates are not available elsewhere on the LIC website.
Here is what the calculator shows as sample, i.e., annual amount of annuity payable at yearly intervals which can be purchased for Rs 10 lakh under different options for Immediate Annuity.
So if we reverse calculate the annuity rates using this table provided by LIC via its calculator, here are the annuity rates for LIC’s Jeevan Akshay VII Plan Table 857 for different ages and different variants:
Option A
- For age 30 + Option A (i.e., Annuity payable for life at a uniform rate) – Annuity Rate is 6.90%
- For age 40 + Option A (i.e., Annuity payable for life at a uniform rate) – Annuity Rate is 7.28%
- For age 50 + Option A (i.e., Annuity payable for life at a uniform rate) – Annuity Rate is 7.95%
- For age 60 + Option A (i.e., Annuity payable for life at a uniform rate) – Annuity Rate is 9.27%
- For age 70 + Option A (i.e., Annuity payable for life at a uniform rate) – Annuity Rate is 12.05%
- For age 80 + Option A (i.e., Annuity payable for life at a uniform rate) – Annuity Rate is 18.49%
Option D
- For age 30 + Option D (i.e., Annuity payable for a guaranteed period of 15 years) – Annuity Rate is 6.87%
- For age 40 + Option D (i.e., Annuity payable for a guaranteed period of 15 years) – Annuity Rate is 7.23%
- For age 50 + Option D (i.e., Annuity payable for a guaranteed period of 15 years) – Annuity Rate is 7.81%
- For age 60 + Option D (i.e., Annuity payable for a guaranteed period of 15 years) – Annuity Rate is 8.72%
- For age 70 + Option D (i.e., Annuity payable for a guaranteed period of 15 years) – Annuity Rate is 9.84%
- For age 80 + Option D (i.e., Annuity payable for a guaranteed period of 15 years) – Annuity Rate is 10.48%
Option F
- For age 30 + Option F (i.e., Annuity payable for life & return of purchase price) – Annuity Rate is 6.50%
- For age 40 + Option F (i.e., Annuity payable for life & return of purchase price) – Annuity Rate is 6.56%
- For age 50 + Option F (i.e., Annuity payable for life & return of purchase price) – Annuity Rate is 6.63%
- For age 60 + Option F (i.e., Annuity payable for life & return of purchase price) – Annuity Rate is 6.73%
- For age 70 + Option F (i.e., Annuity payable for life & return of purchase price) – Annuity Rate is 6.82%
- For age 80 + Option F (i.e., Annuity payable for life & return of purchase price) – Annuity Rate is 6.93%
Option G
- For age 30 + Option G (i.e., Annuity payable for life increasing at 3% simple rate every year) – Annuity Rate is 5.01%
- For age 40 + Option G (i.e., Annuity payable for life increasing at 3% simple rate every year) – Annuity Rate is 5.44%
- For age 50 + Option G (i.e., Annuity payable for life increasing at 3% simple rate every year) – Annuity Rate is 6.15%
- For age 60 + Option G (i.e., Annuity payable for life increasing at 3% simple rate every year) – Annuity Rate is 7.49%
- For age 70 + Option G (i.e., Annuity payable for life increasing at 3% simple rate every year) – Annuity Rate is 10.23%
- For age 80 + Option G (i.e., Annuity payable for life increasing at 3% simple rate every year) – Annuity Rate is 16.59%
Option H
- For age 30 + Option H (i.e., Annuity payable for life & 50% for spouse) – Annuity Rate is 6.78%
- For age 40 + Option H (i.e., Annuity payable for life & 50% for spouse) – Annuity Rate is 7.09%
- For age 50 + Option H (i.e., Annuity payable for life & 50% for spouse) – Annuity Rate is 7.63%
- For age 60 + Option H (i.e., Annuity payable for life & 50% for spouse) – Annuity Rate is 8.68%
- For age 70 + Option H (i.e., Annuity payable for life & 50% for spouse) – Annuity Rate is 10.90%
- For age 80 + Option H (i.e., Annuity payable for life & 50% for spouse) – Annuity Rate is 16.00%
Option I
- For age 30 + Option I (i.e., Annuity payable for life & 100% for spouse) – Annuity Rate is 6.66%
- For age 40 + Option I (i.e., Annuity payable for life & 100% for spouse) – Annuity Rate is 6.91%
- For age 50 + Option I (i.e., Annuity payable for life & 100% for spouse) – Annuity Rate is 7.34%
- For age 60 + Option I (i.e., Annuity payable for life & 100% for spouse) – Annuity Rate is 8.17%
- For age 70 + Option I (i.e., Annuity payable for life & 100% for spouse) – Annuity Rate is 9.94%
- For age 80 + Option I (i.e., Annuity payable for life & 100% for spouse) – Annuity Rate is 14.11%
Option J
- For age 30 + Option J (i.e., Annuity payable for life & 100% for spouse & return of purchase price) – Annuity Rate is 6.46%
- For age 40 + Option J (i.e., Annuity payable for life & 100% for spouse & return of purchase price) – Annuity Rate is 6.52%
- For age 50 + Option J (i.e., Annuity payable for life & 100% for spouse & return of purchase price) – Annuity Rate is 6.59%
- For age 60 + Option J (i.e., Annuity payable for life & 100% for spouse & return of purchase price) – Annuity Rate is 6.67%
- For age 70 + Option J (i.e., Annuity payable for life & 100% for spouse & return of purchase price) – Annuity Rate is 6.77%
- For age 80 + Option J (i.e., Annuity payable for life & 100% for spouse & return of purchase price) – Annuity Rate is 6.87%
As would be mighty clear by now once you have seen the indicative LIC Jeevan Akshay 7 Interest Rate 2023, in general, the annuity rates tend to be higher for higher age bands. And this is the trend across all variants of LIC Jeevan Akshay Plan 857 pension policy.
Also, if we consider the taxation of annuity income, then obviously the effective annuity rates or returns will be much lower. These and annuity plans are best for those who are looking for constant stream of risk-free stable income and belong to comparatively lower tax slabs.
LIC Jeevan Akshay 7 Pension Illustrations
The LIC website offers following illustration (or sample) via the plan brochure that give out the full LIC Jeevan Akshay VII Policy Details
A 45-year old purchases Jeevan Akshay Plan jointly with spouse aged 35-years by paying Rs 10 lakh. Here are the annuity income under various variants in this case:
- Option A: Immediate Annuity for life – Rs 74,200 per year
- Option B: Immediate Annuity with guaranteed period of 5 years and life thereafter – Rs 74,100 per year
- Option C: Immediate Annuity with guaranteed period of 10 years and life thereafter – Rs 73,800 per year
- Option D: Immediate Annuity with guaranteed period of 15 years and life thereafter – Rs 73,300 per year
- Option E: Immediate Annuity with guaranteed period of 20 years and life thereafter – Rs 72,800 per year
- Option F: Immediate Annuity for life with return of Purchase Price – Rs 64,800 per year
- Option G: Immediate Annuity for life increasing at a simple rate of 3% p.a. – Rs 56,400 per year
- Option H: Joint Life Immediate Annuity for life with a provision for 50% of the annuity to the Secondary Annuitant on death of the Primary Annuitant – Rs 70,700 per year
- Option I: Joint Life Immediate Annuity for life with a provision for 100% of the annuity payable as long as one of the Annuitant survives – Rs 67,500 per year
- Option J: Joint Life Immediate Annuity for life with a provision for 100% of the annuity payable as long as one of the Annuitant survives and return of Purchase Price on death of last survivor – Rs 63,900 per year
Can I use LIC Jeevan Akshay VII Plan for NPS Exit Annuity?
Yes. This LIC Table No. 857 plan does offer the option to take Immediate Annuity by NPS subscriber when the plan to exit from NPS. The annuity options as allowed as per PFRDA Regulations shall be available to NPS subscriber.
If a Government Sector NPS subscriber purchases this Plan as a default option, then Option J shall be available to the subscriber whose spouse is surviving on the date of purchase. Option F shall be available to the subscriber in the absence of his or her spouse.
How to purchase LIC Jeevan Akshay VII Plan online?
Step-by-step process to buy LIC’s LIC Jeevan Akshay VII Plan Online:
- Log-on to LIC website (www.licindia.in) for buying this online product. Click on ‘Buy Policies Online’. Select plan LIC Jeevan Akshay VII Plan.
- Click on ‘Buy Online’. Choose your desired Purchase Price, Policy Variant, Annuity Payout Mode (Monthly/Quarterly/Half-yearly/Yearly), Date of Birth, Gender, Smoking status, etc.
- Enter other details such as Name, Address, Occupation, Qualification etc. displayed on the screen and complete the proposal form online.
- Pay premium online and fulfil the underwriting requirements, if any.
That’s how you can buy LIC Plan 857 online with rebates of about 2% on purchase amount.
Should You Buy LIC Jeevan Akshay VII Plan (857)?
That is the key question obviously after all the discussion, review of LIC Jeevan Akshay VII Review, and analysis of plan and policy benefits.
While there is no doubt about LIC being synonymous with trust in India, should you invest in LIC Jeevan Akshay VII Plan (857)?
Annuity plans have a very specific use case and that is to provide regular, reliable and stable income to the annuity buyer.
So for those who are looking for regular income, generally during retirement years, LIC Jeevan Akshay is definitely one of the most popular immediate annuity plans that offer regular pension income. But if you are in accumulation phase of life and don’t need pension or regular income as you are still actively working and getting salary/business income, then this is not for you.
Everybody doesn’t need to purchase an annuity plan. So first, you need to establish whether LIC Jeevan Akshay VII Plan does fit in your product suitability factor or not. And if it does, at what age should you purchase it (as annuity rates differ with age) and which variant (from 10 available) ones to choose from.
If you are looking for regular income post-retirement, then LIC Jeevan Akshay VII Plan (Table 857) can be one of the components of your income-generation bucket along with other options like SCSS and PMVVY, and POMIS or doing SWP from debt funds, regular interest income from FD, etc. You can also stagger your annuity purchases (instead of buying it in one go) to better optimize the overall annuity rate on your overall portfolio.
Hopefully, you would have found this LIC Jeevan Akshay VII Review of LIC’s popular Immediate Annuity plan (UIN – 512N337V04) useful and the policy details and LIC Jeevan Akshay Policy Benefits would be clear by now. You can use LIC’s Jeevan Akshay VII to generate annuity income throughout the life annuitant in India (2023). But make sure you understand and assess the suitability first.