Last Updated on October 2, 2023 at 10:38 am
In this article, we look at how LIC’s immediate annuity plan Jeevan Akshay’s annuity rates have over the last 20 years. This study was triggered while preparing a retirement planning illustration based on laddered annuities.
Annuity rates tend to follow interest rates and inflation movements over the long term*. The first version of Jeevan Akshay (Product UIN 512N089V01) was launched in Feb 1988 and was available until June 2000. Annuity rates for this product could not be found online but one can imagine that they would have been extraordinarily high. According to this report, those in the mid-50s would have got 10%-plus.
* The repo rate is an overnight rate while annuity rates represent long term rates. Generally, a lower policy rate slowly permeates to the longer duration end of the rate spectrum. However, a one-to-one correspondence between the REPO rate movement and annuity rate movement will not be seen.
The REPO rate was 13.5% (!) in Sep 2000 and dropped dramatically down to 9% a year later and 8% another year later!. LIC removed the above plan and launched another variant with only 8% rates for 50-somethings (see data below). Also see: RBI Repo Rate History
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! 🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
If anything the single important takeaway from this data is, that as the rate of borrowing goes down with our economy gradually becoming stronger, annuity rates would fall down. Therefore it is crucial while planning for something like this – How to beat inflation after retirement along with guaranteed pension – to keep annuity expectations low and revise them yearly before retirement.
The following policies were considered. This is not an exhaustive list and there are some gaps in between.
- Jeevan Akshay I, Product UIN 512N204V01, Launched 14-Dec-01, Withdrawn 16-Oct-03.
- Jeevan Akshay II, Product UIN 512N221V01, Launched 1 Oct 2003, Withdrawn 20 Dec 2004.
- Jeevan Akshay III, Product UIN 512N227V01, Launched 13 Dec 2004, Withdrawn 17 Mar 2006
- Jeevan Akshay IV, Product UIN 512N234V01, Launched 7 March 2006, Withdrawn 20 Sep 2006
- Jeevan Akshay V, Product UIN 512N234V02, Launched 10 Aug 2006, Withdrawn 10 Sep 2007
- Jeevan Akshay VI (old), Product UIN 512N234V03, Launched 7 Aug 2007, Withdrawn 15 May 2012
- Jeevan Akshay VI (new), Product UIN 512N234V04, Launched 15 May 2012, Withdrawn FY 2016-17
- Jeevan Akshay VI (newer!) Product UIN 512N234V06, Launched Dec 2017, Withdrawn Aug 2019
- Jeevan Akshay VII (old), Product 512N337V01, Launched 25th Aug 2020, Withdrawn 1st Feb 2022
- Jeevan Akshay VII (new), Product 512N337V02, Launched1st Feb 2020.
Finding the annuity rates for the 8th policy was hard so we decided to find out for ourselves using LIC’s online calculator: What are the annuity rates of LIC Jeevan Akshay VII from Feb 2022?
Historical LIC Jeevan Akshay annuity rates
Roman numerals represent the version number of Jeevan Akshay. Select data is also presented in the tables below. We shall consider the annual payout option for “annuity for life” only.
Notice the big drop in rates from Jeevak Akshay I to II. They correspond to a fall in REPO rate from about 8.5% to 7% The small increase from Jeevan Akshay III, IV and V also represent an increase in interest rates. The decrease in annuity rates from VI (newer!) to VII (old) also corresponds to a fall in the REPO rate. The annuity has marginally increased from 2020 to 2022 possibly due to an increase in inflation. Now RBI has followed suit with a higher repo rate!
The rates have dropped the most for senior citizens. Over the last 20 years, the change in rate (point to point) is -14% for 70-year olds, -12% for 60-years, -11% for 50-year olds and -9% for 40-year olds.
Historical Jeevan Akshay Annuity Rates (for life) for 40-year olds
| Years | Age 40 |
| 2002 | 7.2 |
| 2003 | 5.7 |
| 2005 | 6.6 |
| 2006 | 6.8 |
| 2007 | 7.3 |
| 2008 | 7.5 |
| 2012 | 7.5 |
| 2018 | 6.8 |
| 2020 | 6.2 |
| 2022 | 6.5 |
Historical Jeevan Akshay Annuity Rates (for life) for 50-year olds
| Years | Age 50 |
| 2002 | 8.1 |
| 2003 | 6.5 |
| 2005 | 7.3 |
| 2006 | 7.5 |
| 2007 | 8.0 |
| 2008 | 8.1 |
| 2012 | 8.1 |
| 2018 | 7.5 |
| 2020 | 6.9 |
| 2022 | 7.2 |
Historical Jeevan Akshay Annuity Rates (for life) for 60-year olds
| Years | Age 60 |
| 2002 | 9.5 |
| 2003 | 7.8 |
| 2005 | 8.6 |
| 2006 | 8.7 |
| 2007 | 9.2 |
| 2008 | 9.4 |
| 2012 | 9.4 |
| 2018 | 8.7 |
| 2020 | 8.1 |
| 2022 | 8.3 |
Historical Jeevan Akshay Annuity Rates (for life) for 70-year olds
| Years | Age 70 |
| 2002 | 12.4 |
| 2003 | 10.9 |
| 2005 | 11.2 |
| 2006 | 11.4 |
| 2007 | 12.0 |
| 2008 | 12.1 |
| 2012 | 12.1 |
| 2018 | 11.4 |
| 2020 | 10.5 |
| 2022 | 10.7 |
With LIC changing the annuity rates often, future retirees should expect current rates to head south. Private insurers tend to offer a higher rate but this is more due to a smaller market share. Also in terms of buyer trust, it is hard to look past LIC.
References
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)