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September 3, 2018
Table of Contents
1. Overview of LIC Jeevan Labh plan
2. Understanding Insurance Jargon : Sum Assured,Policy Term,Participating …
3. LIC Bonus Rates
4. Should you invest in LIC Jeevan Labh Scheme?
5. How to buy LIC Jeevan Labh
6. How to Claim LIC Jeevan Labh
The plan is available from ages 8 to 59 years. The maximum age at maturity is 75 years.
Minimum basic sum assured is 2 lakh with maximum basic sum assured having no
limit.
In LIC Jeevan Labh there are only 3 policy terms with corresponding premium
paying term. The customer can select any one of these according to their
requirement.The policy terms are 16, 21, and 25 years with premium-paying terms of
10,15 and 16 years respectively. Policy term means till when one would be covered with
insurance. Premium Paying Term, PPT, means till when one has to pay premium.
For example if Rahul , who is 30 years of age, plans to take LIC Jeevan Labh for the term
of 21 years which has premium payment term (PPT) of 15 years . He will be covered i.e
have insurance till he is 50 years old but he will have to pay premium only till 15 years i.e
till he is 45 years. For next 6 years even though he is not paying premium he is still
insured.
LIC Jeevan Labh provides Optional Benefit, Accidental Death and Disability Benefit
Rider by payment of additional premium. If buyer opted for this rider, an amount equal to
sum assured will be payable if death occurs due to accident. In case of permanent
disability due to accident, future premium will be waived and the amount equal to Sum
Assured is payable in 10 years equal monthly installments.
New term assurance rider is also available at the inception of the policy on payment of
additional premium. If policy holder opts for this rider, an amount equal to term assurance
rider sum assured will be payable on the death of the life assured during the policy term.
One can take Loan against LIC Jeevan Labh Plan 836 after payment of premiums for
at least 3 years subject to conditions: Maximum loan for inforce policy-90% of
surrender value and for paid up policies 80% of surrender value.
One can Surrender after 3 years of full premium payment.
Paid-up Value = Basic Sum assured x (No. of premiums paid/ Total no. of premiums
payable)
Premium Payment Mode rebate
2% on yearly,
1% on Half Yearly,
Nil on Quarterly & Monthly
Rebate on High Sum Assured (Per 1000 of Sum Assured)
0% up to 4,90,000
1.25% for 5,00,000 to 9,90,000
1.50% for 10,00,000 to 14,90,000
1.75% for 15,00,000 and above
or the number of years you choose to insure yourself. Policy terms vary from a
single year many years. Premium paying term is the number of years you pay
premium on your policy. Usually the premium paying term is the same as the policy
term. However, some policies offer you the option of selecting a premium paying
term that is lower than the policy term.
Endowment Plan: An endowment plans if policy holder dies during the policy
term, nominee gets the sum assured plus some returns; if he survives the policy term,
he gets back the sum assured and returns. Unlike Term Insurance where if the
insured dies during the policy term his family gets the money, but if he survives the
policy term he or his family does not get anything.
Non Linked : It means that it is NOT Unit linked Insurance Plan or
ULIP which are combined life insurance and investment plans. In ULIP part of the
premium paid by the customer goes towards providing the insurance cover and the
balance is invested in venues of investment desired by the policy holder. These
insurance plans double as mutual funds.In Unit Linked Insurance Plans(ULIP),
the investments are subject to risks associated with the capital markets
i.e linked to the stock market. But this plan is not linked to stock
market.
Participating : Over and above the returns mentioned ,you also get an
additional benefit in the form of reversionary bonuses. Typically, these bonuses
are a percentage of the sum assured and are declared at the end of every year. Once
declared they become guaranteed. These bonuses come from the surplus generated by the
participating fund. The insurer is free to exercise its discretion, while declaring the
surplus.Such plans are called as Participating plans. Bonus is only paid to customers
who have bought a Participating Insurance Policy .Our article Bonus of Life Insurance
Policies explains about Bonus in detail.
Terminal bonus or Final additional bonus : Terminal bonus is paid at maturity
or at the time of claim.
Simple reversionary bonuses : Simple reversionary bonus is a with profits life
assurance bonus, normally declared annually, which is based on the profits of the life
Lets see what a policy holder of LIC Jeevan Labh will get.
On Death of Policy holder – If policy holder dies during the policy term, his nominee
will receive the Sum Assured + Accrued Bonuses + Final additional bonus or FAB (if
any). After this, the policy will cease to exist. The death benefit would not be less than
105 per cent of the total premiums paid as on date of death.
On Surviving till maturity – If policy holder survives till the end of policy term, he will
get the Sum Assured + Accrued Bonuses+FAB (if any). Final additional bonus or
FABThe policy will terminate thereafter.
Every year LIC declares bonus rates on all its Products. LIC’s Bonus rates for 2014-2015, were
declared in Aug,2015. Bonus of LIC Plan is available at http://www.licindia.in/bonus_info.htm
SRB Bonus rates vary according to the type of policy, policy and term of the policy. E.g.
Endowment plan have different Bonus rates than WholeBack Plan. Jeevan Anand policy
with a term of 5 year will have a different bonus rate than Jeevan Anand of 11 years.
As per the last reported bonus rates LIC of India reported different rates for policies with
term <11 years, between 11-15 years, between 16-20 years and >20 years
Final Additional Bonus is dependent on the term of the policy and the sum assured. E.g.
LIC of India’s Jeevan Anand policy of Sum Assured of 3 lakhs for 5 years will have a
different FAB than same policy of 10 lakhs for same 5 years.
Bonus rates of LIC for Whole Life Plans and Endowment Plans over the years are shown in
images below
LIC Terminal Bonus or Final additional bonus for policy term per 1000 Rs of Sum Assured is
shown below
Following are some of the sample annual tabular premium rates (in Rs.) (exclusive of service
tax) per Rs. 1000 Basic Sum Assured. So if someage aged 20 years go for Sum assured or
insurance amount of 2,00,000 for 16 years then Premium would be 85.20 times 200(Its per 1000
sum assured) which is 17,040 while if someone aged 30 years goes for 25 years for 5 lakh sum
assured then from table value is 46.60 i.e premium without service tax is 46.60*300 terms
which is 23,300. You can see the premium for different ages here
One will get returns in the range of 6% to 7% under different options of LIC’s Jeevan Labh plan.
For example If oneaged 35 years opts for LIC Jeevan Labh policy for Sum assured of 2 lakh
Policy term of 16 years and PPT as 10 years, premium is Rs 17,892 with service. He would then
have to pay the premium for 10 years. In the beginning of 17th year he may receive the maturity
benefit of Rs 3.38 Lakh (inclusive of Sum Assured, accrued bonuses and final additional
bonus). The expected return on his investment is around 5.6%.
Life insurance is meant to offer financial protection to dependents in the unfortunate event of
one’s death. Its purpose is to enable one’s dependents to maintain their current life style and
pursue their life goals.Our article Checklist for buying Life Insurance Policy talks about the
questions one should ask before buying a Life insurance policy. Before buying insurance or any
product, think what you are getting and an what cost? Try not complicate your life by
combining investment and insurance in one. Article Mixing Insurance with Investment talks
about why mixing investment with insurance is not a good idea.
Application form/Proposal form: The Revised Proposal Form Numbers are 300, 340 and
360.
Address proof
Age proof
Medical reports(if required).
A lot of new tax saving plans are launched during Jan-Mar as most of salaried individuals have
to submit tax saving investment proof to their employers. So people are in rush to buy the tax
saving plan. The premiums paid on LIC Jeevan Labh policy may give you income tax benefit
under section 80c, but you would be locking yourself paying premium for the premium paying
term. Surrender is only possible after 3 years. Do think beyond taxes when investing in
Financial Products.
If you are looking for an investment avenue to save some taxes, you may consider buying
ELSS Funds/PPF for long-term.
If your requirement is to save taxes plus would like to have life cover, you can consider
buying a pure Term Insurance Plan.
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Comments
Hi! the article is really great for ppl like me who do not have any kindly information regarding
the policies. i am planning to take LIC policy but a bit confused which i shall go for either
the Jeevan labh or Anand or may be any other.. Kindly help guide me
Reply
Anant says
September 14, 2017 at 1:40 AM
How much will i get if i surrender after three years of premium payment?
Reply
Reply
Jeevan Labh with 25 years will give good return than Jeevan Anand
Reply
bemoneyaware says
August 12, 2017 at 4:32 AM
Reply
Nilesh says
April 29, 2017 at 1:15 PM
Nice article
Reply
bemoneyaware says
April 29, 2017 at 4:56 PM
Reply
wheather Jeevan Labh table no. 836 is providing pension after maturity and if so what is the
rate or calculation . my age is 32 sum assured 15 lakh for 25 years.
Reply
Lekshmi r says
September 17, 2016 at 8:04 AM
Reply
T.B.ARAHUNASHI says
March 12, 2017 at 11:28 PM
Reply
Anita says
March 31, 2016 at 7:17 PM
Reply
Anita says
March 31, 2016 at 7:17 PM
Reply
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