LIC New Jeevan Shanti: Pension, Rates, & Review [2026]

Overview

LIC New Jeevan Shanti 758 is a single-premium, non-linked, and non-participating deferred annuity plan. A one-time investment in this plan guarantees a fixed pension (annual income) for life.

Key Features and Eligibility

Minimum Investment (Purchase Price): ₹1,50,000
Maximum Investment Limit: None
Entry Age: Minimum 30 years and Maximum 79 years
Deferment Period: Between 1 and 5 years (number of years after which pension is required)
Pension Options: Single Life and Joint Life

Benefits of The Scheme

Guaranteed Income: Pension rates are fixed at the time of taking the policy and are available throughout life.
Modes of Payment: Pension can be taken monthly, quarterly, half-yearly, or annually.
Death Benefit: In case of death of the policyholder, the purchase price or the amount fixed as per the rules is paid to the nominee, which is the higher of 105% of purchase price plus accrued additional benefit minus annuity.

If you have a lump sum sitting around and want guaranteed lifetime income rather than market-linked returns, LIC New Jeevan Shanti plan (UIN: 512N338V08) is built for that trade-off. It's a single-premium deferred annuity: you invest once now, and the plan pays a fixed pension starting a few years later, for as long as you live.

This review covers LIC New Jeevan Shanti plan details such as how the plan works, how the deferral period and age affect your payout.

It will provide clarity regarding the death benefit mechanics, surrender and loan rules, LIC's scale and reliability, and, honestly, who this plan suits and who's better off elsewhere.

What Is the LIC New Jeevan Shanti Plan?

LIC New Jeevan Shanti pension plan is a Non-Par, Non-Linked, Individual, Savings, Deferred Annuity plan. Non-Par means it pays no bonus or share in surplus. The benefits are fixed at purchase regardless of LIC's actual investment performance. It sits alongside LIC Jeevan Akshay VII, the immediate-annuity version of the same idea, where income starts right away instead of after a wait.

Ditto's Insight

The deferment period is the entire point of this plan. If you don't need a waiting period before income starts, an immediate annuity like Jeevan Akshay VII usually compares more precisely, since you're not locking money away for years before it starts working for you.

LIC New Jeevan Shanti: Single Life Versus Joint Life Annuity Options

You pick one of two options at purchase, and it cannot be changed afterward.

Option 1, Single Life: Pays the annuity for as long as you're alive. Payments stop entirely on the policyholder’s death, and the death benefit goes to the nominee.
Option 2, Joint Life: Covers the policyholder and a second annuitant, who must be a spouse, a sibling, or a lineal family member (parent, child, grandparent, or grandchild). Payments continue as long as either of them is alive, and only stop when the last survivor dies.

Single Life pays a noticeably higher annuity than Joint Life for the same purchase price, since Joint Life covers two lives instead of one. LIC's own illustration shows roughly a 3%-4% lower annual payout under Joint Life.

How the Deferment Period Changes Your LIC New Jeevan Shanti Pension

Additional Benefit on Death affects the death benefit, not the annuity rate. A longer deferment improves your quoted annuity rate, partly through LIC's base pricing and partly through explicit purchase-price incentives that scale with deferment. Here's LIC's own incentive table, showing the extra amount added to the annuity rate per ₹1,000 of purchase price, by deferment period and purchase price slab:

Deferment Period	₹5L-₹9.99 Lakh	₹10L-₹24.99 Lakh	₹25 Lakh and above
1 year	2.90	3.90	4.15
2 years	3.30	4.30	4.55
3 years	3.70	4.70	4.95
4 years	4.10	5.10	5.35
5 years	4.50	5.50	5.75

The pattern holds across every slab: each extra year of deferment adds to your rate, and a higher purchase price bracket adds further. This can't change after purchase, so decide your deferment period carefully upfront.

Note

Purchase prices under ₹5 lakh get no incentive addition.

Death Benefit and Additional Benefit Accrual Under LIC New Jeevan Shanti

If the annuitant (or last survivor, under Joint Life) dies at any point, LIC pays the higher of two amounts: 105% of the purchase price, or the purchase price plus the accrued additional benefit on death minus any annuity already paid.

This additional benefit only accrues during deferment, at a monthly rate tied to your annuity rate, and stops once payouts begin. So death cover peaks right before deferment ends, and once payments start, each payout reduces the death benefit further since it's deducted against what's already been paid. Even though the 105% of purchase price is the minimum guaranteed amount, that means your nominee always gets at least that much.

LIC New Jeevan Shanti Pension Illustration by Age and Deferment

The figures below are based on LIC's official illustration for a 45-year-old primary annuitant with a ₹10 lakh purchase price, a 5-year deferment period, and a 35-year-old joint annuitant (under Option 2):

Annuity Option	Yearly	Half-Yearly	Quarterly	Monthly
Option 1: Single Life	₹86,100	₹42,189	₹20,879	₹6,888
Option 2: Joint Life	₹82,800	₹40,572	₹20,079	₹6,624

Monthly payouts cost roughly 4% of your annual rate versus yearly, since LIC reduces rates for more frequent payments. There are a lot of 3rd party websites available online to calculate an estimate, we recommend using LIC’s e-sales portal to get a customized quote.

IRR by Age at Death (Option 1):

Age at Death	Pension Received Years	Total Received(Calculated)	Pre-Tax IRR%(Calculated)
50 (at vesting)	0	₹13.87 Lakh	6.76%
55	5	₹14.81 Lakh	4.27%
65	15	₹23.42 Lakh	5.65%
75	25	₹32.03 Lakh	6.03%
85	35	₹40.64 Lakh	6.19%
95	45	₹49.25 Lakh	6.26%

On Returns:

According to the numbers on LIC's own illustration, the picture becomes clearer. On a ₹10 lakh purchase price at age 45 with a five-year deferment, the guaranteed pension works out to roughly 5.7% a year if you live to 65, rising to about 6.3% if you live to 100. That is the ceiling. No matter how long you live, the return cannot climb past it.

For context, a 10-year government bond currently yields 6.85%, and the Senior Citizen Savings Scheme (SCSS) pays 8.2%. On rate alone, New Jeevan Shanti does not beat either.

What it offers instead is permanence. The SCSS resets to prevailing rates at every renewal, and a government bond simply matures and returns your principal. Both require you to reinvest at an unknown future rate. New Jeevan Shanti locks in a rate on day one that cannot fall and cannot run out, at a cost of roughly 1.5 percentage points per year. That trade-off makes sense if longevity risk is your primary concern, and less so if you are optimising for yield.

On the Death Benefit:

The death benefit grows every month during the deferment period, peaking at roughly ₹13.9 lakh on a ₹10 lakh investment just before payouts begin. Once pension payments start, each instalment is subtracted from the remaining death benefit. Only after the benefit reaches its minimum guaranteed amount of 105% of the purchase price, roughly four years into payouts, does each pension payment become net new money. The death cover is protection for the waiting period, not a bonus that continues alongside your pension for life.

Surrender and Loan Rules Under LIC New Jeevan Shanti

You can surrender anytime for the higher of Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV). GSV equals your GSV Factor times purchase price, minus any annuity already paid, with factors of 75% in years 1-3 and 90% from year 4 onward. Surrendering early costs a real chunk of your capital, a loss that only partly narrows over time.

A policy loan is also available after three months of issuance, capped at 80% of surrender value. Loan interest is deducted from your annuity payments, so a loan quietly reduces your income rather than sitting as a separate bill. During the deferment period, though, you must pay loan interest out of pocket, but defaulting on it terminates the policy.

CTA

LIC: Performance Metrics

Metric	Life Insurance Corporation of India (LIC) Average (FY 2024-26)	Industry Average
Claim Settlement Ratio (CSR)	98.16%	99.00% (Mean)
Amount Settlement Ratio (Average FY 2023-25)	95.48%	94.83% (Mean)
Annual Business Volume	₹2,36,689.82 crore	₹3,778.58 crore (Median)
Volume of Complaints per 10,000 Claims	4.34	13.1 (Median)
Solvency Ratio	2.15x	2.00x (Median)
Annual Death Claims Paid	₹19,224.97 crore	₹237.24 crore (Median)

Sources: Public disclosures from the LIC India website and annual reports from the IRDAI official website. To explore these metrics in detail, refer to Ditto Data Lab.

Pros and Cons of the LIC New Jeevan Shanti Plan

Pros

Rate locked at purchase, immune to future rate cuts
Backed by LIC's scale and consistent claim-paying record
Genuine choice between Single and Joint life cover, with flexible payout modes
Death benefit during deferment protects capital if the policyholder dies before payouts start

Cons

No maturity benefit and no inflation adjustment on your fixed payout
Annuity income is added to your taxable income and taxed at your applicable slab rate
Early surrender locks in a real capital loss
Annuity option can never be changed once chosen
Opportunity cost of capital since it cannot be deployed in more productive investments.

Who Should Buy the LIC New Jeevan Shanti Plan? (and Who Should Avoid it)

This plan suits people at or near retirement who have a lump sum, want zero market risk, and are comfortable trading flexibility for a guaranteed number for life. It's a poor fit if you're years from retirement, since locking a large sum away early means missing potentially better long-term growth elsewhere, and it's a poor substitute for life cover. If you need protection for dependents, loans, or long-term goals, a standalone term insurance plan does that job far more efficiently.

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Conclusion

LIC New Jeevan Shanti does one thing well: a guaranteed, unchangeable pension for life, locked in the day you buy it. However, that certainty costs you flexibility, inflation protection, and tax efficiency, making it suitable only for retirees who specifically want that trade-off.

If you're still building your career and thinking about protecting your family's finances rather than annuitizing a retirement corpus, that's a different conversation, worth having with an advisor before locking money away. Our pension plans guide is a good next stop for comparing this against the National Pension System and other annuity options.

Frequently Asked Questions

Is LIC New Jeevan Shanti a good deferred pension plan for someone retiring in five years?

LIC New Jeevan Shanti can work well if you want a guaranteed, unchangeable income locked in today, especially since a 5-year deferment gets you the highest incentive on your annuity rate under the current structure. The trade-off is that your money is locked away with limited liquidity for those five years and beyond, so it's worth being certain you won't need this capital for anything else before committing.

What is the maximum deferment period allowed under LIC New Jeevan Shanti?

The maximum deferment period allowed under LIC New Jeevan Shanti is 5 years, subject to your vesting age not exceeding 80. So if you're closer to LIC's maximum entry age of 79, your deferment period gets automatically capped lower to keep your vesting age within that limit.

Can I surrender LIC New Jeevan Shanti during the deferment period, and what do I lose?

Yes, you can surrender at any time. You'll receive the higher of the Guaranteed Surrender Value or Special Surrender Value, and the GSV factor is 75% of your purchase price (minus any annuity paid) for the first three policy years, rising to 90% from year four onward. Surrendering early always means a real loss on your original investment.

How much loan can I take against an LIC New Jeevan Shanti policy?

You can take a loan up to 80% of your surrender value, available three months after the policy is issued, structured so the annual interest doesn't exceed 50% of your yearly annuity amount. The current loan interest rate is 9.50% per annum, compounding half-yearly, for loans sanctioned from May 1st 2025 to April 30th 2026.

What does my nominee receive if I die during the LIC New Jeevan Shanti deferment period?

Your nominee gets the higher of 105% of your purchase price, or your purchase price plus the accrued additional benefit on death that built up during deferment. This is paid regardless of whether you chose Single Life or Joint Life, though under Joint Life it only triggers on the death of the last survivor.

Can LIC New Jeevan Shanti be bought jointly with my spouse?

Yes, under Option 2, Joint Life. Your spouse or another lineal family member (parent, child, grandparent, or grandchild)or a sibling can be the second annuitant. Payments continue as long as either of you is alive, though the annual payout is lower than Single Life since it's structured to cover two lives.

How is LIC New Jeevan Shanti different from LIC Jeevan Akshay VII?

Jeevan Shanti is a deferred annuity: you wait 1 to 5 years before payments start, while Jeevan Akshay VII is an immediate annuity that starts paying right away. Jeevan Akshay VII also offers far more annuity structures (10 options versus Jeevan Shanti's 2), including increasing annuities and joint-life options with partial continuation. If you don't need or want a deferment period, Jeevan Akshay VII is usually the more direct comparison.

Who should actually consider LIC New Jeevan Shanti over the alternatives?

Retirees who already have adequate health insurance cover and emergency savings, want zero market risk on a portion of their corpus, and specifically value a rate that can never fall regardless of future interest rate cuts. It also suits risk-averse buyers who know they won't need this capital for other goals, since the plan is explicitly built to trade liquidity for certainty.

Can I buy LIC New Jeevan Shanti with less than ₹1.5 lakh?

Yes, in one specific case. If you're buying the plan for the benefit of a dependent with a disability (Divyangjan), the minimum purchase price drops to ₹50,000 and the usual minimum annuity limits (₹12,000/year, ₹1,000/month) don't apply at all.

However, a few conditions come with it. You must buy Option 1 (Single Life) on your own life, with the dependent named as nominee. The disability must meet the definition of "person with benchmark disability" under Section 2(r) of the Rights of Persons with Disabilities Act, 2016. And if you've paid less than ₹1.5 lakh, the death benefit can't be taken as a lump sum, it must be used to buy an immediate annuity for the dependent, who then receives that income for life regardless of LIC's usual minimum annuity, minimum entry age, or purchase price rules. For everyone else, the minimum stays ₹1.5 lakh.

Does buying LIC New Jeevan Shanti online get me a better pension?

Yes, and it is a meaningful difference most buyers miss. LIC offers a direct-sale incentive that increases your annuity rate when you buy online without going through an agent or broker. New customers buying online get a 2% increase on their tabular annuity rate for purchase prices under ₹10 lakh, and 2.5% for ₹10 lakh and above. Existing LIC policyholders, or nominees of a deceased policyholder, get a slightly higher bump of 2.15% for purchases under ₹10 lakh and 2.5% above that. If you buy through an agent instead, existing policyholders get only a 0.15% incentive, which means going direct online is worth roughly 2% more on your annuity rate for the same money.

Two things worth noting before you proceed. If you qualify under more than one category, you can claim only one incentive, not both. And unlike the purchase-price incentive, which adds a fixed amount per ₹1,000 of purchase price, these are percentage increases on your tabular rate, so they work in addition to, not instead of, the purchase-price incentive.

Do I pay GST on the purchase price of LIC New Jeevan Shanti?

No, not anymore. For premiums paid on or after September 22, 2025, GST on all individual life insurance policies, including annuity and pension plans, was reduced to zero. Before this change, single-premium annuity plans like New Jeevan Shanti were taxed at an effective rate of 1.8%, since GST of 18% was applied to 10% of the premium under the annuity valuation rule. On a ₹10 lakh purchase price, that worked out to roughly ₹18,000 in GST. Today that amount is zero, meaning your entire purchase price goes directly toward buying the annuity with nothing deducted toward tax. GST on term insurance and all other life insurance policies such as annuity and pension plans was reduced to zero in September 2025.

Last updated on: 7 Aug, 2026