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

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...
Read more

WEALTH TAX

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 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...
Read more

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...
Read more

How to Pick Top Performing Mutual Fund Schemes

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   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...
Read more

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
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