Skip to main content

LIC Jeevan Nidhi Plan Review

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

LIC has launched two products in the new year, and in this post I'm going to review one of them, which is the New Jeevan Nidhi Plan.

This is an insurance product that gives you life cover and at maturity, you are then compulsorily required to either buy an annuity product from LIC or buy another single premium deferred pension product from LIC.

This is a key thing to remember – you are bound to invest the maturity proceeds in another LIC pension product, and to that extent I wonder if you wanted to do that, why not buy that product right now itself?

As far as I can see – LIC has two types of annuity products – immediate annuity and deferred annuity.

LIC Jeevan Akshay is an immediate annuity product, which means you pay, and start getting the annuity immediately, you can't build your funds over a number of years, and then get pension. So this won't be suitable for anyone who doesn't need pension right now.

LIC New Jeevan Suraksha however is what's called a Deferred Annuity Product, and that means you pay premiums over a number of years, and then get a pension after the maturity of the product.

The key difference however is that New Jeevan Nidhi gives you a life cover as well, which is not given in New Jeevan Suraksha. It is important to emphasize here that the life cover you get from this product will at best beef up your existing life insurance, and on its own is not going to amount to much if you do indeed meet your maker.

So, based on this, I think someone who is looking for the following things should investigate this product further:

  1. Your retirement is still a number of years away
  2. You want to buy a pension product from LIC when you retire.
  3. You have life cover right now which you want to beef up with some other insurance products.

Please leave a comment if you can think of any other reasons, or if you feel there is any error in my reasoning.

New Jeevan Nidhi Plan Features

Life Cover

This product gives you life cover and in addition to the sum assured there is a Rs. 50 per 1,000 Guaranteed Addition for each completed year in the first five years, so if you die within the first five years then you will get the sum assured plus the guaranteed additions accrued to you.

After the first five years, the plan starts to participate in the profits of LIC, which is called the Reversionary Bonus, and you will get the basic sum assured plus guaranteed addition plus the reversionary bonus plus any other final bonus declared.

This money can be paid out in lumpsum or also in form of an annuity.

Vesting Benefit

Vesting is when the term of the policy is complete and you're ready to get the benefits from the policy. The New Jeevan Nidhi page on the benefits show that if they made a profit of 8% per year during the term of the policy for a 35 year old who took a policy for Rs. 1 lakh for 25 years, the total premiums paid will Rs. 1,03,025 and the total benefits will be Rs. 2,33,500. The annual premium comes out to Rs. 4,121.

Now the important thing to remember is that this is just an example, and your returns could be lower than this if LIC makes less money or higher than this if LIC makes more than this, but it's best to be conservative at the time of investing and think that you are not likely to get higher than this amount. (Anyone reading the stories of LIC bailing out PSU IPOs could tell you that)

In fact in their illustration if they make a profit of 4%, there is no bonus at all, and you get just Rs. 1,25,000 in that case which shows you how much the returns can vary, and no one can really look that far out in the future and say what will happen during that time.

Eligibility Criteria and Other Features of New Jeevan Nidhi

You have to be at least 20 years old and no more than 60 years of age to take this policy. You need to at least get a minimum basic sum assured of Rs. 1 lakh, and the policy term can be from 5 to 35 years.

The premium can be paid monthly, quarterly, half yearly, yearly or you can even buy a single premium policy. There are rebates in the sum assured if your premium is over a certain amount and that also depends on your premium payment term.

Conclusion

The current high interest rate environment gives you a lot of where you can invest your money for long durations of time and get sure returns, and I tend to favor those instead of buying this with all the uncertainty over returns, and then the condition to invest only in a LIC annuity product after vesting.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax PlanInvest Online
  2. HDFC TaxSaverInvest Online
  3. DSP BlackRock Tax Saver FundInvest Online
  4. Reliance Tax Saver (ELSS) FundInvest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) FundInvest Online
  7. SBI Magnum Tax Gain Scheme 1993Invest Online
  8. Sundaram Tax SaverInvest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFundsInvest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...
Read more

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...
Read more

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...
Read more

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
Read more

Bharat Bond ETF

Top SIP Funds Online   The government of India has paved the way for the launch of India's first corporate bond ETF called as Bharat Bond ETF. Edelweiss Mutual Fund will be managing it. The fund is mandated to invest in AAA-rated bonds of select public sector companies (see the table 'List of constituents and their proportions in the portfolio'). The government has a threefold objective behind launching this product. One, to deepen the liquidity of the Indian debt markets and provide a gateway for easy retail participation. Two, to solve investors' dilemma of picking premium bonds. Lastly, to help the underlying government-owned companies raise funding for their operations. But does it make sense for you, the investor, to invest in it? Lets find out. What is the product? As the name suggests, it is an exchange-traded fund which will be listed on a stock exchange from where its units can be bought and sold post launch. It will have two variants - one maturing in 3 ye...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now