LIC unveils Jeevan Dhara II featuring unique annuity choices; here’s all you need to know

On January 22, 2024, the Life Insurance Corporation of India (LIC) launched Jeevan Dhara II, a novel annuity plan. This non-linked, non-participating, individual savings, deferred annuity scheme is designed by LIC to ensure a secure and guaranteed financial future for individuals.

The annuitant’s, primary annuitant’s and secondary annuitant’s minimum entry age is 20 years (last birthday), while the maximum entry age is 80, 70, and 65 years minus the deferment period, depending on the selected annuity option. Annuity rates increase with advancing age.

Choices galore

Policyholders have the flexibility to opt for either regular premium or single premium, selecting from single-life annuity or joint-life annuity options. They also have the freedom to determine the deferment period, ranging from 5 to 15 years for regular premiums and 1 to 15 years for single premiums. Furthermore, policyholders can choose the mode of annuity payments, with options including yearly, half-yearly, quarterly, and monthly frequencies.

According to the scheme document provided by LIC, policyholders have the option to enhance their annuity by making additional premium payments during the deferment period.

Annuity options available

Within the single life annuity category, policyholders can choose from different plans, including option 1, which provides a life annuity for a single life, or option 2, offering a life annuity with the return of premium for a single life. Options 3-7 present variations, incorporating features such as life annuity with a 50% or 100% return of premium upon reaching specific ages.

Joint life annuity choices, represented by option 8 and option 9, broaden coverage to couples by providing life annuities for joint lives. In these alternatives, the policy persists upon the survival of the primary and/or secondary annuitant throughout the deferment period, ensuring financial support for the surviving spouse.

In the scenario of a joint life annuity with a return of premium, the enhanced annuity option enables the surviving annuitant to receive a lump-sum payment at a discounted cash value after the initial death, providing increased flexibility.

For individuals interested in a single premium annuity, choices 10 and 11 provide life annuities with the return of the purchase price for single and joint lives, respectively. These alternatives propose a one-time premium payment solution, delivering annuity benefits customized to individual or joint requirements.

How do policyholders benefit?

The benefits provided by the plan are guaranteed and unchanging, regardless of experience. These benefits encompass a death benefit equivalent to a percentage of the total premiums paid and annuity payments determined by the selected mode. Furthermore, certain choices include the early return of premium and various distinctive features.

Throughout the deferment period, if the annuitant survives, no payout occurs. However, in the unfortunate event of the annuitant’s demise, the plan assures a death benefit equal to 105% of the total premiums paid until the date of death, providing financial assistance to the nominee. Following the deferment period, the selected annuity option becomes active, delivering periodic annuity payments in arrears for as long as the annuitant remains alive.

Upon the annuitant’s death, annuity payments halt instantly, bringing the policy to a close without any additional obligations.

What is unique to Jeevan Dhara – II plan?

Distinctive to Jeevan Dhara - II are choices such as life annuities with the return of premium, providing extra financial flexibility. Moreover, the scheme presents liquidity alternatives, allowing policyholders to obtain a lump-sum sum in exchange for a decrease in annuity payments and other benefits, offering an additional level of financial control.

You have the option to purchase the Jeevan Dhara II plan either through offline channels, utilizing agents or intermediaries, or directly online via the official LIC website.