Insurance regulator asks LIC (Life Insurance Corporation) to lower rates on Jeevan Akshay plan

The insurance regulator wants the rate offered by the pension plan to be brought down in accordance with the return on company’s investment.

Jeevan Akshay, the immediate annuity plan from Life Insurance Corporation of India (LIC) that provides guaranteed the return of 6.75-7 percent has been asked by the Insurance Regulatory and Development Authority of India (IRDAI) to review the return as the yield on 10-year government bond has fallen to 6.5 percent, reports TOI.

The insurance regulator wants the rate offered by the pension plan to be brought down in accordance with the return on company’s investment.

The pension plan has seen a record inflow as it provides regular income for a lifetime of the annuitant on payment of one-time lump sum.

People chose LIC pension policy over higher return instruments like corporate bonds and other government schemes like Pradhan Mantri Vaya Vandana Yojana (PMVVY) with 5 to 10 year tenure, as it offered guaranteed pension for life with an option of 100 percent annuity payable to spouse during lifetime or death of the policyholder.

Young people having surplus funds find Jeevan Akshay as an attractive investment avenue as the minimum age to purchase pension plan is 30 years.

The plan has helped LIC to increase its revenue and market share.

Source - Money Control