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What do I do with my LIC Jeevan Suraksha policy?

On maturity of such pension policy, a maximum of 1/3rd of the maturity amount can be withdrawn as lump-sum

My Jeevan Suraksha Policy will mature in January 2017. Which option I should opt? I am a heart patient since last twelve years and maturity amount is Rs 3.3 Lacs.
-Praveen Chandra Gautam

On maturity, a maximum of 1/3rd of the maturity amount can be withdrawn in lump-sum while the balance has to be necessarily converted into an annuity. In your case, you will be able to withdraw upto Rs 1.1 lakh in lumpsum and buy an annuity with the balance Rs 2.2 lakh to derive regular income.

Following are the annuity options to choose from.

1. Life Annuity - You get guaranteed pension for life. The income stream tends to be the highest given that the investment amount will not be paid back.
2. Increasing Annuity - Pension is paid till you are alive but at an increasing rate.
3. Life Annuity with Return of Corpus (or Purchase Price) - Guaranteed pension for your life, and the initial investment amount is returned to a nominee. This will pay you the lowest annuity.
4. Annuity Guaranteed for Certain Periods - Guaranteed pension to for a fixed period of 5, 10, 15, 20 years. It stops after that. In case of death during the period, the equivalent of pension is paid to the nominee for the remaining period. The key difference is that in this option even if on your death the annuity will be paid for the fixed period as selected.
5. Annuity Guaranteed for Certain Periods, and for life thereafter - Same as above option the difference being that if you survive the term, you continue to get the same pension for entire life.
6. Life Annuity with Contingent Survivor or Last Survivor - Annuity is paid to you till your life and after you if your spouse is alive the annuity is paid to her for the rest of her life.

You may contact your insurer to get detailed information about your actual income stream you will get under each of these options. The annuity is based on the accumulated value at the time of maturity and will be at the prevailing annuity rates.

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