Last Updated: 15 Oct 2025 | By Keyur Tirgar, LIC Agent Code: 04699-102
Planning for retirement is one of the most important financial decisions you'll ever make. LIC Jeevan Akshay VII is India's most popular immediate annuity plan that provides guaranteed lifetime pension from the day you invest. In this comprehensive guide, we'll explore everything you need to know about this retirement income plan.
What is LIC Jeevan Akshay VII?
LIC Jeevan Akshay VII (Plan No. 857) is an immediate annuity pension plan offered by Life Insurance Corporation of India. It's a single premium plan where you invest a lump sum amount once, and start receiving guaranteed pension payments immediately from the next payment cycle.
This plan is ideal for individuals who have retired or are nearing retirement and want to convert their retirement corpus into a steady monthly income.
Key Highlights of LIC Jeevan Akshay VII
- Single Premium Payment: Pay once, receive pension for lifetime
- Immediate Pension: Pension starts from the first payment cycle
- Guaranteed Returns: Fixed pension throughout life, no market risks
- Flexible Payout Options: 10 different annuity options to choose from
- Government Backed: Offered by LIC, backed by Government of India
- No Medical Examination Required
- Loan Facility Available: After 3 years of policy commencement
- Tax Benefits: Under Section 80C (subject to conditions)
Who Should Buy LIC Jeevan Akshay VII?
This pension plan is perfect for:
✓ Retired individuals seeking regular income
✓ People aged 30-85 years planning for retirement
✓ Those with retirement corpus (PF, gratuity, investment maturity)
✓ Senior citizens wanting guaranteed lifetime income
✓ Conservative investors preferring safety over high returns
✓ Individuals seeking tax-efficient retirement income
✓ People wanting to leave legacy for spouse/children
Eligibility Criteria
| Parameter | Details |
|---|---|
| Minimum Entry Age | 30 years (completed) |
| Maximum Entry Age | 85 years (completed) |
| Minimum Purchase Price | ₹1,00,000 |
| Maximum Purchase Price | No limit |
| Policy Term | Lifelong (till death of annuitant) |
| Premium Payment | Single premium (one-time) |
How LIC Jeevan Akshay VII Works
The working of this plan is simple and straightforward:
Step 1: You invest a lump sum amount (minimum ₹1 lakh) as single premium
Step 2: Choose from 10 different annuity options based on your needs
Step 3: Select pension payment frequency (monthly, quarterly, half-yearly, or yearly)
Step 4: Start receiving guaranteed pension from the first payment cycle
Step 5: Pension continues as per chosen option (lifetime or fixed period)
Example:
If you invest ₹10 lakhs at age 60 under Option A (Annuity for life), you'll receive approximately ₹7,140 per month for your entire lifetime. The exact amount depends on age, gender, and chosen option.
10 Annuity Options Explained
LIC Jeevan Akshay VII offers 10 flexible annuity options to suit different needs:
Option A: Annuity for Life
- Pension for entire lifetime
- No return of purchase price to nominee
- Highest pension rate
- Best for: Maximum pension income, no dependents
Option B: Annuity Guaranteed for 5, 10, 15, or 20 Years and Life Thereafter
- Pension guaranteed for selected period even if you die
- After guarantee period, pension continues for life
- Balance guaranteed pension paid to nominee if death occurs within guarantee period
- Best for: Ensuring pension for specific period, then lifelong
Option C: Annuity for Life with Return of Purchase Price
- Pension for lifetime
- 100% purchase price returned to nominee on death
- Lower pension rate than Option A
- Best for: Leave lump sum for family while enjoying pension
Option D: Joint Life Last Survivor Annuity
- Pension continues as long as either spouse is alive
- After first death, pension continues for surviving spouse
- No return of purchase price
- Best for: Married couples wanting joint protection
Option E: Joint Life with Return of Purchase Price
- Pension for both lives (last survivor)
- 100% purchase price returned on death of last survivor
- Lower pension rate
- Best for: Couples wanting pension + legacy
Option F: Annuity for Life Increasing at Simple Rate of 3%
- Pension increases by 3% every year
- Helps beat inflation partially
- Lower starting pension
- Best for: Long-term inflation protection
Option G: Annuity with Return of Purchase Price on Death
- Pension for life
- Purchase price returned in annual installments (over 5, 10, 15, or 20 years)
- Starts immediately after policy commencement
- Best for: Gradual return of capital + pension
Option H: Spouse Pension After Death
- Pension for your lifetime
- After your death, spouse receives 50% or 100% of pension (as chosen)
- No return of purchase price
- Best for: Ensuring spouse's financial security
Option I: Guaranteed Pension for 5, 10, 15, or 20 Years
- Fixed pension for selected period only
- 100% purchase price returned at end of period
- Higher pension than lifetime options
- Best for: Short-term pension needs, want capital back
Option J: Annuity for Life with Provision for 50% or 100% of Annuity to Spouse
- Pension for your life at 100% rate
- After death, spouse receives 50% or 100% pension for life
- Return of purchase price on death of last survivor
- Best for: Complete family protection with legacy
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Pension Rates and Calculator
Pension amount depends on:
- Purchase price (investment amount)
- Age at entry
- Gender (females get slightly lower rates due to higher life expectancy)
- Annuity option chosen
- Pension frequency (yearly mode gives highest rate)
Sample Pension Rates (Option A - Annuity for Life)
For ₹10 Lakh Investment (Yearly Mode):
| Age | Male Annual Pension | Female Annual Pension |
|---|---|---|
| 30 years | ₹55,000 | ₹52,000 |
| 40 years | ₹60,000 | ₹56,000 |
| 50 years | ₹66,000 | ₹62,000 |
| 60 years | ₹74,000 | ₹70,000 |
| 70 years | ₹86,000 | ₹82,000 |
| 80 years | ₹1,04,000 | ₹1,00,000 |
Note: These are approximate rates. Actual rates vary. Contact your LIC agent for exact calculations.
Pension Frequency Impact
Pension mode affects the amount received:
- Yearly Mode: Highest rate (100%)
- Half-Yearly Mode: ~98% of yearly rate
- Quarterly Mode: ~97% of yearly rate
- Monthly Mode: ~96% of yearly rate
Recommendation: Choose yearly mode if you can manage cash flow, as it gives maximum pension.
Benefits of LIC Jeevan Akshay VII
1. Guaranteed Lifetime Income
Unlike market-linked investments, pension is guaranteed and fixed for life. No worry about market volatility or economic downturns.
2. Immediate Pension
No waiting period. Pension starts from the next payment cycle after policy purchase.
3. Government Security
Backed by LIC and Government of India, one of the safest investment options.
4. Flexibility
10 different annuity options allow you to customize according to your specific needs.
5. No Medical Examination
Simple purchase process with no health check-up required.
6. Loan Facility
Can avail loan up to 75% of purchase price after 3 years.
7. Tax Benefits
- Purchase price eligible for Section 80C deduction (if paid through recognized retirement funds)
- Pension income taxable as per your income tax slab
- Return of purchase price is not taxable
8. Inflation Protection
Options F offers 3% annual increase, helping counter inflation partially.
9. Joint Life Options
Multiple options for married couples ensure both spouses are protected.
10. Legacy Planning
Several options return purchase price to nominees, creating legacy for family.
Disadvantages and Limitations
Transparency requires mentioning drawbacks:
1. No Premature Withdrawal
Once invested, you cannot withdraw the lump sum. Only pension payments are received.
2. Lower Returns Compared to Market
Returns are around 5.5-7.5% annually, lower than equity or other investments.
3. Pension is Taxable
Pension received is added to your income and taxed as per your slab.
4. Fixed Returns
No benefit from market upside or inflation (except Option F with 3% increase).
5. Not Suitable for Young Investors
Better investment options available for those under 50 years.
6. Purchase Price Not Adjusted for Inflation
The returned purchase price (in options C, E, etc.) has same value, not inflation-adjusted.
Tax Implications
Tax Benefits:
- If purchase price paid from recognized retirement funds (EPF, gratuity), eligible for Section 80C deduction
Tax Liability:
- Pension received is fully taxable as income from other sources
- Return of purchase price (in applicable options) is not taxable
- TDS deducted if pension exceeds threshold limits
Example:
Annual pension: ₹3,00,000
If you're in 30% tax bracket: Tax = ₹90,000
Effective post-tax pension: ₹2,10,000
How to Buy LIC Jeevan Akshay VII
Option 1: Through LIC Agent (Recommended)
- Contact authorized LIC agent (like me: +91 9784309640)
- Discuss your needs and choose appropriate option
- Get personalized pension calculation
- Submit application with documents
- Pay premium through cheque/online
- Receive policy document
- Pension credits start as per chosen mode
Option 2: LIC Branch Office
Visit nearest LIC branch with documents and purchase directly.
Option 3: Online (Limited)
Visit LIC website, though personalized guidance recommended for such important decisions.
Documents Required
- Proposal form (duly filled)
- Age proof (Aadhaar, PAN, Passport, Birth Certificate)
- Identity proof (Aadhaar, PAN, Passport, Voter ID)
- Address proof (Aadhaar, Utility bills, Passport)
- PAN Card (mandatory)
- Bank account details (cancelled cheque)
- Photographs (passport size)
- Nominee details with proof
LIC Jeevan Akshay VII vs Other Pension Plans
Vs Post Office Senior Citizen Savings Scheme (SCSS)
| Feature | LIC Jeevan Akshay VII | SCSS |
|---|---|---|
| Maximum Investment | Unlimited | ₹30 lakhs |
| Lock-in Period | Lifetime | 5 years |
| Interest Rate | 5.5-7.5% approx | 8.2% (current) |
| Age Limit | 30-85 years | 60+ years |
| Premature Withdrawal | No | Yes (with penalty) |
Vs Senior Citizens Fixed Deposit
| Feature | LIC Jeevan Akshay VII | Bank FD |
|---|---|---|
| Returns | Fixed pension | Interest (varies) |
| Safety | Govt backed | DICGC insured up to ₹5L |
| Lifetime Income | Yes | No |
| Tax on Returns | Taxable | Taxable |
Vs National Pension System (NPS)
| Feature | LIC Jeevan Akshay VII | NPS |
|---|---|---|
| Nature | Guaranteed | Market-linked |
| Returns | Fixed | Variable |
| Risk | Zero | Moderate to High |
| Annuity Purchase | Immediate | At retirement |
Frequently Asked Questions
Q1: Can I surrender LIC Jeevan Akshay VII policy?
A: No, there's no surrender value. It's a lifetime commitment.
Q2: What happens if I die within 1 year of buying?
A: Depends on option chosen. Most options have provisions for nominee benefits.
Q3: Can NRIs buy this plan?
A: Yes, NRIs can purchase with certain conditions.
Q4: Is pension amount fixed forever?
A: Yes, except Option F which increases 3% annually.
Q5: Can I increase pension amount later?
A: No, but you can buy additional policy with new premium.
Q6: What is the loan facility?
A: After 3 years, loan up to 75% of purchase price available.
Q7: How is pension credited?
A: Directly to your bank account via ECS/NEFT.
Expert Opinion: Should You Buy LIC Jeevan Akshay VII?
✅ Buy If:
- You're 55+ years and retiring soon
- You have retirement corpus to invest
- You prioritize safety over returns
- You want guaranteed lifetime income
- You have no immediate need for lump sum
- You want government-backed security
❌ Avoid If:
- You're below 50 years (better investment options available)
- You need liquidity (emergency fund access)
- You can handle market-linked investments
- You expect high returns (8%+)
- You might need lump sum back
Conclusion: Is LIC Jeevan Akshay VII Worth It?
LIC Jeevan Akshay VII is an excellent choice for retirees seeking guaranteed lifetime income with complete safety. While returns are moderate (5.5-7.5%), the peace of mind, government backing, and guaranteed pension make it ideal for conservative investors and senior citizens.
The key is to:
- Choose the right annuity option for your family situation
- Don't invest entire retirement corpus (keep some for emergencies)
- Consider inflation impact on long-term purchasing power
- Evaluate against other pension options based on your needs
My Recommendation:
Allocate 40-50% of retirement corpus to LIC Jeevan Akshay VII for guaranteed income, and invest remaining in diversified portfolio for growth and emergency needs.
Need Help Choosing the Right Pension Plan?
Planning for retirement requires careful consideration of various factors. As an IRDA certified insurance adviser and authorized LIC agent (Code: 04699-102), I can help you:
✓ Calculate your pension needs
✓ Compare different annuity options
✓ Choose the best plan for your situation
✓ Complete purchase process smoothly
✓ Provide ongoing support
Contact me for FREE consultation:
📞 Call/WhatsApp: +91 9784309640
📧 Email: tirgarkuriya@gmail.com
📍 Serving: All Over Rajasthan
Don't let your retirement corpus sit idle. Convert it into guaranteed lifetime income today!
Disclaimer: This article is for informational purposes only. Insurance products are subject to terms and conditions of LIC. Pension rates mentioned are approximate and subject to change. Please verify current rates and policy terms before purchasing. Consult your financial adviser for personalized recommendations.
Last Updated: 15 October 2024
Word Count: 2,847 words
