Blog 43 - Vada-Pav, Dubai, Ola, and Option ‘D’

Hello friends! How is the monsoon? Now there is a break, though, so it’s a respite, sort of! Haven’t you planned any picnics? Common friends, this is the time, and you should drive to 'Bhushi Dam', sit under the fizzy waters, and munch on the piping hot 'Vada-Pav' with green chili. Life has indeed become nice nowadays. One can wish and then just drive off. Now, this is about you and me!! But don’t underestimate Grandma and Grandpa. They book an OLA or UBER cab through their mobile and roam where they want. When bored, they order their favorite food on Swiggy or Zomato. They use Skype to chat with their grandchildren. Leave aside the above; they even make a Dubai or Singapore trip alone if they wish. They are also mentally & financially willing to undergo knee replacement surgery without tension or fear. In fact, they would casually inform with ease that they had an 'Angioplasty' as if they had had a morning walk. That’s why I said in the beginning that life has indeed become nice. If you wish to taste such a life, you need excellent financial planning! Right? I will offer you an exceptional option. Just see if it convinces you. Friends, if you wish to have an immediate annuity after investing a lump sum amount, then one option is provided – 'Annuity guaranteed for 15 years and life thereafter.' In this option, consider the first part, ' Annuity guaranteed for 15 years', when chosen by and the person dies after five years, then the heir shall get the same Annuity for the remaining ten years. In short, if the person who has chosen the annuity under the said option dies within 15 years, then the heir shall have the same Annuity for the balance of years up to the completion of 15 years. And now the second half of the option is 'and life thereafter,' which means that the person shall get the same Annuity after 15 years till the person survives. In this option, the invested amount is not returned. Now the exception feature of this scheme is if the person is 56 years old or more and has invested ₹. 10 lakhs in the LIC’s 'Jeevan Akshay – VII' scheme, then the person shall get a guaranteed annuity at the rate of 8.16% pa. Friends, you may think that what’s the use if we don’t get back the invested money? But you are going to get a guaranteed annuity at the rate of 8.16% for 15 years, which amounts to ₹. 12,24000. And if the person survives beyond 15 years, then the same amount of Annuity will continue to be paid at the rate of 8.16% (Yearly ₹. 81,600). If the option of 'Refund of invested amount' is chosen, then the Annuity shall be ₹ 65,600 pa. And suppose the person dies after 15 years, then the heir would get the invested amount, i.e., Rs. 10 lacs. At that time, the value of Rs.10 lacs would be ₹. 3,88,000 (at the rate of 6.5%) due to devaluation over fifteen years. Now think if you choose to get the Annuity of ₹. 81,600, then ₹. 16,000 (₹. 81,600 - ₹. 65,600) more for yourself, you will enjoy life with the above-stated conveniences. As such, the heir would not benefit from the ₹. 3,88,000 anyways that they would get after 15 years.