UIN: 512N234V04

Plan No. 810

Loads of buzz all around about LIC Jeevan Akshay 6. Turn on any FM channel in Kanpur (my place) & you will get across it’s advertisement. Have a look at my analysis on this plan before investing.

This is what Jeevan Akshay 6 offers to you:

“It is an Immediate Annuity plan, which can be purchased by paying a lump sum amount. The plan provides for annuity payments of a stated amount throughout the life time of the annuitant. Various options are available for the type and mode of payment of annuities” –

Here, Annuity means a fixed amount paid to your on a regular interval ( be it monthly, quarterly, half yearly or annually) on paying a lump sum amount to LIC.

The following options are available under the plan:

1. Annuity payable for life at a uniform rate.
2. Annuity payable for 5, 10, 15 or 20 years certain and thereafter as long as the annuitant is alive.
3. Annuity for life with return of purchase price on death of the annuitant.
4. Annuity payable for life increasing at a simple rate of 3% p.a.
5. Annuity for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
6. Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
7. Annuity for life with a provision of 100% of the annuity payable to spouse during his/ her life time on death of annuitant. The purchase price will be returned on the death of last survivor.

What happens if the annuitant dies?

Option 1: Under option (1) annuity ceases

Option2:

1. On death during the guaranteed period – annuity is paid to the nominee till the end  of the guaranteed period after which the same ceases.
2. On death after the guaranteed period – annuity ceases.

Option 3: Under option (3) annuity ceases and the purchase price is paid to the nominee.

Option 4: Under option (4) annuity ceases.

Option 5: Under option (5) annuity ceases and 50% of the annuity is payable to the surviving named spouse during his/her life time. If the spouse predeceases the annuitant, the annuity ceases.

Option 6: Under option (6) annuity ceases and full annuity is payable to the surviving named spouse during his/her life time. If the spouse predeceases the annuitant, the annuity ceases.

Option 7: Under option (7) annuity ceases. Full annuity is payable to the surviving named spouse during his/ her life time and purchase price is paid to the nominee after the death of the spouse. If the spouse predeceases the annuitant, the annuity ceases and purchase price will be paid to the nominee.

Amount:

Minimum:

Offline (Through a LIC agent ): Rs.1,00,000

Online: Rs.1,50,000

Maximum: No Limit

Amount you will get per annum if you invest Rs. One lakh through an AGENT:

Amount you will get per annum if you invest Rs. One lakh through Online mode

Note:

1. Minimum amount for online mode is Rs.1,50,0000. Here we are taking Rs.1,00,000 minimum deposit for online mode  for ease of compairing it with off line mode.
2. Interest rate will be 1% higher in case you deposit the money through online mode.

It’s clearly visible that anytime it’s better to invest online due to 1% extra return.

Since it’s not possible to write about each option here, let’s talk about Option 1 in detail:

Option 1: Annuity payable for life at a uniform rate.

CASE 1: Entry at Age 30 yr’s.

So if your age is 30 years & you are planning to invest Rs.1,00,000 online, you will get Rs.8,190 per annum at the end of each year till you are alive.

Suggestion: How about Investing Rs.1,00,000 in Post Office Monthly Income Scheme (POMIS). You will get Rs.708 per month or Rs.8,500 per annum.

In case of demise, family members will get the full amount back in case of investment in POMIS whereas if you invest in LIC Jeevan Akshay 6, your family members will get nothing in case of your death.

Also you can withdraw the money from POMIS in between by paying a small penalty, whereas one cannot withdraw money from LIC Jeevan Akshay 6.

Comparison: 

From the above analysis, it’s clearly visible that one should go for Post Office Monthly Income Scheme rather than going for LIC Jeevan Akshay 6.

CASE 2: Entry at age 50 seems to be a good bet (actually it is not) because if your age is 50 years & you are planning to invest Rs.1,00,000 online, you will get Rs.9,140 per annum till you are alive.

Catch: If you invest Rs.1,00,000 @ 8 % (say in bank Fixed Deposit), you will get Rs.9,145 for 27 years. In case of your demise, your dear ones will get Rs.9,145 per annum till the completion of 27 years. Also the amount can be withdrawal anytime in between by you or your dear ones on your demise.

Conclusion: It’s better to invest in Bank FD’s rather than investing at age 50 yr’s. If you are sure ( which is next to impossible) that you will live beyond 50+27 = 77 years, go for LIC Jeevan Akshay 6 else stay away.

Fact:

Life expectancy at birth: This is what official data has to say about life expectancy
Male: 66.08 years
Female: 68.33 years (2011 est.)

(Source: http://www.indexmundi.com/india/demographics_profile.html )

Incentives:

If your purchase price is Rs. 2.50 lakh or more, you will receive higher amount of annuity due to available incentives.

All i can say about Incentives is that they are too less.

Final words:

With so many options to confuse the investors, zero liquidity & such complicated calculations, TRUST me, LIC Jeevan Akshay 6  is not the place to invest in. Investing in Post Office Monthly Income Scheme is far more better.

If somehow your agent is still able to convince you to invest in any of the seven options under this plan, please feel free to drop a comment or write to me at financialkundali@gmail.com  & all for your good I will make sure that you do not invest in it. ( Mention your age and option you are planning to purchase )

www.financialkundali.com

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