Which is the best LIC policy for retirement benefits?

LIC - JEEVAN SURAKSHA

Jeevan Suraksha - Plan no.122 (from LIC)- insuremagic.com

Features:

* Tailor-made for professionals & businessmen.
* Multiple plan / pension options to choose from, such as

Plan options:

*

This plans is available with life cover, without life cover and is very much like an Endowment policy.

Pension options:

* It offers a guaranteed pension for the life of the policyholder or a pension for the last survivor in case of a Joint life policy or a pension fund that will also return the purchase price paid by the policyholder.
* Terminal bonus is available and there is no forfeiture in case the premiums are discontinued.
* In case the life cover is not opted for, the policyholder also has the option of a Single or One time premium payable.
* The policyholder also gains the option of a tax-free commuted value that amounts to nearly 25 percent.

Premiums up to Rs.10,000/- qualify for 100 percent deduction from taxable income in terms of Sections 80 (CCC) of the Income Tax Act

Special Features:
There are various hidden benefits within this plan. The terminal bonus declared by the corporation on the vesting date depends upon the actuarial surplus on the pension fund and will increase the pension benefits.

The immediate annuity rates prevalent at the time of vesting of pension benefits, if favourable in comparison to the deferred annuity rates will be used to recalculate the pension benefits. This subsequently adds to the policyholder's pension benefits.

Non-forfeiture:
If the payment of premiums is discontinued, the policy is not forfeited completely. If premiums are paid for a full 3 years, the benefits are reduced on pro-rata basis.

Underwriting made easier:
An exclusive non-medical limit of Rs.2 lakhs for purchasers up to the age 40 years last birthday has been permitted for the plan.

Survival benefits:

Retirement Pension:

* The policyholder can avail of a life-long monthly pension with an option to commute 25 percent of the sum assured (notional cash option) free from taxation
* Alternatively the Annuity can be guaranteed for 5, 10 or 15 years as well as on life to ensure payments for the remaining period to the policyholder's family in case of his or her unfortunate early death
* Another option available to the policyholder is in the form of joint life and last survivor annuity to ensure 50 percent of pension to the spouse after death of the pensioner

Family Pension

* A policy with life cover guarantees a minimum of 50 percent of target Annuity as family pension, which may go up to 85 percent depending upon the policyholder's age and duration of the policy.

Table of benefits at retirement age 60

Table given below sets out specimen pension benefits. The figures are as follows

Table A â€“ With life cover
Entry Age Monthly Premium Monthly Pension Without Commutation Monthly Pension With Commutation Commuted Value
30 Rs.250 Rs.4674.00 Rs.3505.57 Rs.107,204
40 Rs.250 Rs.1958.66 Rs.1469.00 Rs.44,924
50 Rs.250 Rs.566.04 Rs.424.53 Rs.12,982

Table B â€“ Without life cover
30 Rs.250 Rs.6360.63 Rs.4770.47 Rs.145,886
40 Rs.250 Rs.2319.48 Rs.1739.61 Rs.53,199
50 Rs.250 Rs.604.88 Rs.453.66 Rs.13874

Death benefits:
Duration at death Benefits payable upon death
Death within 3 policy years Return of premium
Death during 4th to 6th policy years Return of premium with interest at the rate of 8% p.a. from the due dates of premium to the date of death.
Death after 6th policy year Return of premium with interest at the rate of 9% p.a. from the due dates of premium to the date of death.

Female lives under Class II will be granted "Without Life Cover" plan only.

Policy Parameters:
Min Max
Entry Age 25 60
Minimum Vesting Age 55 70
Term 5 35

Mode of Payment Max Maturity Age Policy loan available
Yearly, half yearly, quarterly, monthly 70 Years last birthday No

Suitable for:
Every individual salaried or self-employed, chartered accountant, engineer, doctor, architect or any other professional individual, especially if he is not covered by any other pension plan or his employer financed by himself or operated through the LIC.

Example:
Dr. Chhablani, 45 invests in the Jeevan Suraksha plan (with life cover) paying an annual premium of Rs.4575/- to qualify for annuity payments over a 12 year term that will yield him Rs.1,00,000/