LIC New Jeevan Nidhi Plan

LIC New Jeevan Nidhi- An Overview

LIC Jeevan Nidhi is a deferred annuity plan that allows the policyholder to secure the post-retirement life of the policyholder. The principal sum created to provide pension to the old age is the sum assured + simple reversionary bonus + accrued guaranteed additions + terminal bonus.

The plan however is no longer can be bought as the plan was withdrawn by the LIC of India. Those who already have this plan before its withdrawal, they can enjoy its benefits.

Key Features of LIC New Jeevan Nidhi 

• As a participating deferred annuity plan, it provides an option of single and regular premium payments. 

• Guaranteed additions are available for the first 5 years.

• From the 6th year onwards, the plan provides bonuses.

• Optional cover as an accidental death benefit and disability benefit rider is provided under the plan's coverage.

• The plan provides a large sum assured rebate.

Eligibility Criteria of LIC New Jeevan Nidhi

Benefits of LIC New Jeevan Nidhi Policy

As a deferred annuity plan, the LIC New Jeevan Nidhi offers a continuous flow of income after the insured's retirement. Along with this, there are numerous other benefits offered by the policy, such as:

• Death Benefit
  In case of the demise of the insured within the initial 5 years of the policy issue date (i.e. before the vesting date), a basic sum assured plus accrued guaranteed addition is paid to the policy beneficiary either in a lump sum or as the annuity or as a combination of two.
  In case the insured dies after the first five years of the policy are completed, the policy nominee receives the basic sum assured + accrued guarantee addition + simple reversionary bonus + final reversionary bonus (if any), which can be paid as a lump sum, an annuity, or a combination of two.
  If the life insured expires after the vesting date, the death benefit entirely depends upon the pension option chosen.

• Vesting Benefit

  At the time of vesting, the insured is provided with 3 options:

  • The policyholder can withdraw 1/3rd of the entire corpus free of tax liability and purchase an immediate annuity plan at prevailing annuity rates from the remaining amount.

  • From the entire vesting amount, the insured can buy an immediate annuity plan at prevailing annuity rates.

  • The policyholder can buy a deferred annuity plan with a single premium payment option.

• Income Tax Benefit
  Although the pension amount is taxable, the premium paid and one-third of the maturity proceeds are exempt from tax deduction under sections 80C and 10(10A) of the Income Tax Act.

Additional Benefit Offered by LIC New Jeevan Nidhi Policy

The policy provides add-on benefit as an accidental death benefit and disability rider. This optional cover can be availed along with the basic coverage while purchasing the policy.

What is Not Covered Under LIC New Jeavan Nidhi?

For a single-pay plan, 90% of the premium paid is refunded in case the insured commits suicide within 12 months of the policy inception.

For a regular pay plan, if the insured commits suicide within a year of commencement, then 80% of the premiums paid are refunded. In case he/she commits suicide within a year of policy renewal, a higher of 80% of the premium paid or the acquired surrender value is refundable.

Policy Details of LIC New Jeevan Nidhi

• Grace Period: A grace period of 15 days is allowed for monthly mode and 30 days for other modes for the payment of premium.

• Policy Termination or Surrender Benefit: The policy can be surrendered anytime for Single Pay plans. The Surrender Value, if surrendered in the first 3 years will be 70% of the premium paid, and thereafter it will be 90% of the premium paid.

• For Regular Pay plans, the policy can be surrendered after 2 or 3 full years' premiums have been paid. The Surrender Value will be higher than the Guaranteed Surrender Value or Special Surrender Value. The Guaranteed Surrender Value will be expressed as a % of premiums paid + % of vested bonuses and accrued guaranteed additions depending on the year of surrender.

• Free Look Period: If you would not be pleased with the coverage and terms and conditions of the policy, you have the option of canceling the policy within 15 days of receipt of the policy documents, provided there has been no claim.