Recently, LIC launched Jeevan Dhara II, a new pension plan aimed at attracting individuals looking for last-minute tax-saving options at the end of the year. In this article, we will discuss in detail. LIC Jeevan Dhara IIwe will discuss its features, various advantages, and potential disadvantages.
Also read: LIC New Pension Plus – Should I choose it?
About LIC Jeevan Dhara II Pension Scheme
LIC launched a new pension plan, Jeevan Dhara II, on January 22, 2024.
The plan, known as LIC’s Jeevan Dhara – II, is a non-linked, non-participating, individual, savings, deferred pension plan.
This pension plan guarantees a certain amount of income after retirement. It comes with single and shared living options, as well as lump sum and term premium payment options. Life insurance is provided during the grace period and pension is paid after the grace period.
This pension plan is offered under Unique Identification Number (UIN) 512N364V01.
This plan can be purchased offline through agents and other intermediaries or online directly from the website.
LIC’s current pension scheme
Currently, LIC has three pension schemes:
- LIC Jeevan Akshay – VII
- LIC New Jeevan Shanti
- LIC Saral Pension Plan
What types of pension plans are available?
In general, there are two main types of pension plans, each serving a different purpose.
#1 – Immediate Annuity Plan:
- How to use: Under this plan, the investor pays a lump sum and the pension or annuity is paid immediately.
- Main features: This option is perfect for people who want to start receiving regular income immediately after making a one-time payment.
#2 – Deferred Pension Plan:
- How to use: In contrast, deferred pension plans make payments periodically over a predefined period of time.
- Main features: Pension payments begin after a 5-, 10-, or even 20-year deferral period, allowing you to plan your retirement more strategically.
LIC’s Jeevan Dhara II falls under the category of deferred pension plan
LIC Jeevan Dhara II – New Pension Plan – Features and Eligibility
Details of characteristics and qualifications are listed below.
| Minimum age for admission | 20 years |
| Maximum age at time of admission | Options – 1, 2, 8, 9 (10 and 11- Single Premium) – 80 years less deferral period. Options – 5, 6, 7 – 70 years minus deferral period Options – 3 and 4 – 65 years less deferral period. Options – 8 & 9 (secondary pensioners) – age 75 Option – 11 (Single Premium Secondary Pensioner) – Age 79 |
| Deferred period | Options – 1 to 9 – 5 to 15 years |
| Options – 10 and 11 – 1 to 15 years | |
| Minimum vesting age | Options – 1 to 9 – 35 years |
| Options – 10 years and 11 – 31 years | |
| Maximum vesting age | Options – 1, 2, 8, 9 (10 & 11- Single Premium) – 80 years |
| Options – 5, 6, 7 – 70 years | |
| Options – 3 & 4 – 65 years | |
| minimum pension | Monthly – Rs 1,000 |
| Quarterly – Rs 3,000 | |
| Semi-annual – Rs 6,000 | |
| Annual – Rs 12,000 |
What annuity options are available with this plan?
| Regular premium single life | Option 1 – Single life pension |
| Option 2 – Life annuity with premium return | |
| Option 3 – Life annuity with 50% return of premiums after 75 years. | |
| Option 4 – Life annuity with 100% premium return after 75 years. | |
| Option 5 – Life annuity with 50% of premiums returned after 80 years. | |
| Option 6 – Life annuity with 100% premium return after 80 years. | |
| Option 7 – Life annuity with 5% premium return from age 76 to age 95. | |
| Regular Premium Joint Life | Option 8 – Life annuity for communal living |
| Option 9 – Life annuity with return of joint life premiums. | |
| Single Premium Single Life | Option 10 – Life annuity with return of purchase price |
| Single premium communal living | Option 11 – Life annuity with return of purchase price |
LIC Death Benefit Jeevan Dhara II
A) Death during the deferment period
- Single life –105% of the total premium is paid to the nominee.
- Community life – If one of the policyholders dies first, no death benefit is provided. However, this policy will continue. If the last surviving policyholder dies, her 105% of the total premium paid will be paid to the insured.
B) If you die during the pension payment period
- single life – The annuity will be stopped immediately and no further benefits will be provided unless the policyholder chooses to have their premiums returned. If purchase price refund is selected, the nominee will receive her 100% of the total premium paid.
- Community life – The specific terms and conditions regarding the death benefit of the various annuity options are outlined in the policy document. We recommend that you read the details of these policies for a comprehensive understanding of the death benefits under the joint life annuity option.
Positive factors of LIC Jeevan Dhara II
- This pension scheme provides a secure pension. You will know how much you will be paid after the deferral period.
- Unlike previous LIC pension schemes, it comes with additional pension options such as refund of purchase price during the pension payment period up to a certain age.
- Ideal for investors considering a low-risk, low-return pension plan.
Negative factors of LIC Jeevan Dhara II
- Although this plan claims a lifetime income guarantee, it actually guarantees the amount after the deferment period. In any case, the term “guaranteed” is not new, as a typical pension plan states the amount of money you will receive after a deferment period.
- Pension amounts received after the deferral period are taxable.
- This plan offers an additional incentive of 0.25% to 0.5% increase in pension income for offline purchases only. Such offline purchases boost sales for LIC agents. If you only wish to purchase online, you may not benefit from these additional incentives.
- The returns offered by such LIC pension schemes are low and cannot beat inflation.
You may like: 7 Investment Options for Seniors – Low to Medium Risk
LIC Jeevan Dhara II – Should you subscribe or avoid it?
While Jeevan Dhara II comes with unique features, it is important to note that such pension plans also come with low yields. Given the current scenario of rising inflation, it is not advisable to choose investment schemes with low returns. Unless you are a fan of his LIC and prefer low-risk, low-return schemes, it is best to stay away from such plans for now.
You can refer to LIC Jeevan Dhara II Policy Document Click here to learn more about this pension plan.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. I have been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
