LIC’s New Jeevan Nidhi Plan

Life Insurance Corporation of India, which is better known as LIC, is one of the most-favoured and insurance companies in India. For over a period of 6 decades, 250 million people have associated themselves to the LIC. This veteran Corporation, because of its no-hidden costs plans and hassle-free settlements has been the first choice for most people. LIC’s New Jeevan Nidhi is also one such plan that has been very well-received.

If you are planning on investing your hard-earned money to fulfil your long-term goals, then LIC’s New Jeevan Nidhi plan might be the right choice for you. LIC’s New Jeevan Nidhi is a traditional pension plan that combines the advantages of saving as well as welfare. Under this plan, there is a death cover throughout the period of deferment. If the individual survives to the date of vesting he receives the annuity.

Benefits of LIC’s New Jeevan Nidhi Plan

Death Benefit

Death during First 5 Years
In case the insured individual dies within the initial 5 years of buying the policy, the appointed nominee receives the sum assured and the guaranteed additions in the form of

  • A lump sum amount or
  • An annuity or
  • Partially in lump sum and the remaining in the form of an annuity

Death after First 5 Years
If the policy is active and the insured dies after 5 years of purchasing the policy, the appointed nominee will receive :

  • An amount that is equal to the sum assured
  • Guaranteed Benefits
  • Vested Simple Reversionary Bonus
  • Final Additional Bonus, if there is any.

This amount can either be paid in the form of

  • A lump sum amount or
  • An annuity or
  • Partially in a lump sum and the remaining in the form of an annuity

If all the due payments have been duly paid then the death benefit received by the nominee will be more than 105% of the total premiums that have been paid. This amount does not include the extra premium and the taxes that may have been paid.

Benefit on Vesting

In case the life assured survives the date of vesting and if the policy is active, then he receives :

  • An amount that is equal to the sum assured
  • Guaranteed Benefits
  • Vested Simple Reversionary Bonus
  • Final Additional Bonus, if there is any.

Guaranteed Additions
On the condition that the policy is active, a guaranteed benefit of INR 50/thousand of the sum assured is added to the sum assured for every year that the premium has been paid, for the first 5 years. This amount will be paid either on the specified date of vesting or on earlier death of the insured. If the policy is a single premium policy, the guaranteed additions are added to the sum assured on completion of each policy year for the initial 5 years.

Participation in Profits
On the condition that the policy is active and depending on the experience of LIC, the policies participate in the profits after the completion of 6 years. They are eligible for a Simple Reversionary Bonus, the rates of which are announced by LIC.

Tax Benefits
The premiums that are paid towards LIC’s New Jeevan Nidhi are tax-exempted under Section 80CCC till INR 1.5 lakhs per annum. The death benefit that is claimed is also liable to tax exemption under Section 10 (10D) of the Income Tax Act, 1961.

However, if the policyholder avails an annuity, then the annuity amount is not tax-free.

Accident and Disability Rider
The rider is available as a voluntary add-on, only under the Regular Premium Plans, by paying an extra amount of premium. If the rider has been attached to the plan and the plan and the rider are active, in case the insured dies an accidental death, along with the death benefit an accident benefit sum assured will also be paid to the appointed nominee. In case if the insured suffers disability due to an accident, the accident benefit sum assured is paid to him in the form of monthly payouts that are spread over a period of 10 years.

Eligibility Conditions

The eligibility conditions for New Jeevan Nidhi plan are as follows

Minimum Sum Assured For Regular Premium-INR 1 lakh; For Single Premium- INR 5 lakh
Maximum Sum Assured No Limit. The sum assured must be in multiples of INR 5,000.
Minimum Entry Age 20 years
Maximum Entry Age 60 years
Deferment period For Regular Premium-7 to 35 years; For Single Premium-5 to 35 years
Minimum Vesting Age 55 years
Maximum Vesting Age 65 years

Premium Payment
The premiums for New Jeevan Nidhi plan can either be paid as a Single Premium or on a regular basis. The policyholder can select a monthly, quarterly, bi-annual or annual frequency, as per his convenience.

Important Features of LIC’s New Jeevan Nidhi Plan

  • Grace Period
    LIC under New Jeevan Nidhi plan gives a grace period of 15 days in case the premium paying frequency is per month. In case of quarterly, bi-annual and annual frequency the grace period is of 30 days.
  • Availability of Loan
    There is no provision for taking a loan against the policy.
  • Revival
    Not paying the premiums regularly, even in the grace period, will cause the policy to lapse. However, LIC goes the policyholder an option to revive his New Jeevan Nidhi plan. He can revive it within a time period of two years from the first unpaid premium date. But, it should be remembered that the revival has to be done before the date of vesting.
  • Surrender Value
    With this plan, the insured individual has a guaranteed surrender value available.
    • Single Premium Annuitant
      • Within 3 years of the policy purchase-70% of the Single Premium that has been paid.
      • After 3 years of the policy purchase-90% of the Single Premium that has been paid.
    • Regular Premium Annuitant
      • Below 10 year Deferment Period
        The annuitant can surrender the policy for cash if the premiums have been regularly paid for 2 subsequent years.
      • Above 10 year Deferment Period
        The annuitant can surrender the policy for cash if the premiums have been regularly paid for 23 subsequent years.
  • After Surrender
    After surrendering the policy the annuitant has the following options to utilise the surrender proceeds :
    • Purchase Immediate Annuity or
    • Purchase a new Single Premium Deferred pension plan from LIC
  • Section 45 Of Insurance Act,1938
    As per the regular amendments, the provisions under Section 45 will be applicable.
  • Free-Look/Cooling-Off Period
    In case the policyholder is not pleased with the terms and conditions of the policy, LIC gives him a 15 day cooling-off/free-look period. He may return the policy to LIC. It should be remembered that the return is made within 15 days of receipt of the policy. For this, he needs to make a request, where he has to state the reason for the objection. Once he submits his request LIC will cancel the policy and pay back the amount that has been paid, after deducting the necessary charges.
  • Exclusions
    • If a Single Premium annuitant, irrespective of being sane or insane, commits suicide within 1 year of the commencement of risk, LIC will not serve any claim except to a limit of 90% of the premium that has been paid.
    • If a Regular Premium annuitant, irrespective of being sane or insane, commits suicide within 1 year of the commencement of risk, LIC will not serve any claim except to a limit of 80% of the premium that has been paid.
    • If a Regular Premium annuitant, irrespective of being sane or insane, commits suicide within 1 year of the date of revival of the policy, LIC will not serve any claim except to a limit of 80% of the premium that has been paid.

FAQs

If you are planning on investing your hard-earned money to fulfil your long-term goals, then LIC’s New Jeevan Nidhi plan might be the right choice for you. LIC’s New Jeevan Nidhi is a traditional pension plan that combines the advantages of saving as well as security.


The policyholder can get LIC’s Accidental Benefit Rider to his policy if he is paying a regular premium.


The policyholder has a grace period of 15 days in case the premium paying frequency is per month. In case of quarterly, semi-annual and annual frequency the grace period is of 30 days. If the policyholder does not pay his dues within this period, the policy will lapse.


If you do not pay the premium even within the grace period, the policy will lapse. However, you can revive it within a time period of two years from the first unpaid premium date. But, remember that the revival must be done before the date of vesting.


There is no provision of a loan under the New Jeevan Nidhi Policy.


The vesting date or date of vesting is the date from which the annuitant starts to receive the benefits of the policy, that is the regular inflow of income. This date begins the phase of distribution. Till the date of vesting the annuitant contributed to the policy, now he will start receiving the benefits.


The premiums for New Jeevan Nidhi plan can either be paid as a Single Premium or on a regular basis. The annuitant can select a monthly, quarterly, bi-annual or annual frequency, as per his convenience.


You have the option of surrendering your policy after 3 years, but avoid doing so unless there is no other option as you get a very small amount as a refund.


The premiums that are paid towards LIC’s New Jeevan Nidhi are tax-exempted under Section 80CCC. The death benefit that is claimed is also liable to tax exemption under Section 10 (10D) of the Income Tax Act, 1961. However, if the annuitant avails an annuity, then the annuity amount is not tax-free.


Someone who receives annuity is called the annuitant. Since pension plans do not have any life coverage and the policy needs to be self-proposed, the policyholder is the annuitant.