LIC Jeevan Labh

LIC Jeevan Labh is a participating, non-linked limited premium paying individual savings plan, which offers the combined benefit of savings and protection. LIC Jeevan Labh not only provides financial aid to the family of the insured in the event of any eventuality but also takes care of the future financial needs of the family even in the absence of the insured person.

As one of the leading insurance provider in India, LIC policies are a popular choice for customers when it comes to buying insurance cover. Along with the extensive range of policies offered by LIC, LIC Jeevan Labh is one of the bestselling endowment insurance plan offered by the LIC of India. LIC Jeevan labh comes with a host of benefits for the insurance buyers. Let’s read further to know in detail about LIC Jeevan Labh Policy.

How LIC Jeevan Labh Works?

LIC Jeevan Labh can be availed by individuals between the age group of 8 years-59 years, this limited premium paying endowment plan ensures death benefit to the nominee in case of an emergency and also offers maturity benefit to the insured in case he/she survives the entire tenure of the policy. The policy also takes care of the liquidity requirements of the family through the loan facility. 

Eligibility Criteria of LIC Jeevan Labh Policy

Let’s take a look at the eligibility criteria of the policy.

Salient Features of LIC Jeevan Labh Plan

Here are some of the salient features of the LIC Jeevan Labh Plan.

• The plan offers the option of limited premium payment.
• This plan is available for a policy term of 16, 21, and 25 years making goal-based investment easier for investors.
• This non-linked, with profit plan, ensures both comprehensive protection plus assured returns for the investors in the form of death and maturity benefits.
• Policyholders can avail loan facilities on this plan, after paying a regular premium for three years.
• Tax benefits can be availed under Section 80C and 10(10D) of the Income Tax Act.
• The plan offers the option to the avail death benefit in installments.

Benefits Offered by LIC Jeevan Labh Plan 

The following are the benefits offered by LIC Jeevan Labh Plan. 

Death Benefit

The death benefit is paid by the insurer to the beneficiary of the policy if the insured person dies an unfortunate death during the tenure of the policy. The death benefit payable to the nominee of the policy is the sum assured on death plus vested simple reversionary bonus and final additional bonus (if any). The sum assured on death is defined as:

• Higher of 7 times the annualized premium or;
• Basic sum assured amount

The death benefit paid to the nominee of the policy should not be less than 105% of the total premium paid. 

Maturity Benefit

If the life insured survives the entire policy tenure, provided all the premiums of the policy are dully paid and the policy is in force. Maturity benefit is offered to the insured person as a sum assured on maturity along with vested simple reversionary bonus and final additional bonus (if any). The sum assured on maturity is equal to the basic sum assured amount of the policy.

Participation in Profits

The policy participates in the profits of the corporation and is entitles to receive a simple reversionary bonus declared as per the experience of the corporation, provided the policy is in force. The final additional bonus is also declared under the policy in the year the claim is made either as death or maturity.

Tax Benefits

The policyholder can take advantage of the tax benefits offered under the policy. the premium paid towards the policy up to the maximum limit of Rs.1.5 lakh in a financial year and the maturity proceeds are tax exempted under Section 80C and 10(10D) of the Income Tax Act. 

Rider Benefits Offered by LIC Jeevan Labh

Under LIC Jeevan Labh Policy, there are five optional riders, which can be availed by the policyholder by paying an additional premium. Rider benefits can be purchased along with the base plan to increase the coverage of the policy. let’s take a look at these 5 optional rider benefits in detail.

Accidental Death and Disability Benefit Rider

The policyholder can opt this rider anytime within the premium paying tenure of the base plan provided the outstanding PPT of the base plan is at least 5 years. This rider can be purchase along with the base plans to enhance the coverage of the policy. In this rider option, the accidental death benefit sum assured amount is paid to the nominee of the plan along with the death benefit offered under the base plan. Moreover, this rider option also provides coverage in case of accidental disability to the insured. The accidental disability sum assured amount is paid to the insured in equal monthly installments for a tenure of 10 years. Also, the future premiums of the policy are waived off. 

Accidental Benefit Rider

The policyholder can opt this rider anytime within the premium paying tenure of the base plan provided the outstanding PPT of the base plan is at least 5 years. In this rider option, accidental death benefit sum assured is paid to the nominee of the policy in the event of the accidental death of the life assured within 180 days from the date of the accident. 

Term Assurance Rider

This rider option can be availed at the time of policy initiation. This rider offers the benefit of extra sum assured as additional term assurance to the beneficiary of the policy in case of unfortunate death of the insured person during the tenure of the policy.  the term assurance rider benefit is offered along with the basic death benefit offered by the policy.

Critical Illness Rider

Critical illness rider benefits can be purchase at the initiation of the policy. The benefits offered under this rider option can be availed by the insured person during the policy tenure if he/she is diagnosed with any one of the 15 critical illnesses mentioned under the rider.

Premium Waiver Benefit

Under this rider option, all the future premiums of the plan are waived off in case of the unfortunate demise of the insured person. However, if the tenure of premium payment of the base plan surpasses the rider tenure, then all the due future premiums under the base plan from the date of expiry of the rider will be payable to the life assured. In case, the policyholder fails to pay the policy premium, it will become a paid-up policy. 

Sample illustration of Premium

Here we have shown a sample illustration of the annual premium rate for Rs.2 lakh basic sum assured amount for standard lives.

Rebates

Annual Mode- 2% of tabular premium

Half-yearly mode- 1% of tabular premium

Quarterly, monthly mode- Nil

Basic Sum Assured (B.S.A)

Rs. 2,00,000- Rs. 4,90,000- Nil

Rs.5,00,000-Rs.9,90,000- 1.25% of BSA

Rs.10,00,000- Rs.14,90,000- 1.50% of BSA

Rs. 15,00,000 and above- 1.75% of BSA 

Other Details of LIC Jeevan Umang Plan 

Grace Period

A grace period of 30 days is offered by the insurer to the insured to pay the due premiums, in case the policyholder fails to pay the premium of the plan within the premium paying tenure. Policyholders are granted a grace period of 30 days on non-payment of the unpaid premium for those with yearly, half-yearly, and quarterly premium payment modes. However, the grace period is cut short to 15 days in case a policyholder has selected monthly premium payment mode.

Free-look Period

In case the policyholder is not satisfied with the terms and conditions of the policy then they cancel the policy within a free-look period of 15 days offered by the insurer from the date of policy initiation. 

Policy Surrender

LIC Jeevan Labh Plan acquires a surrender value if the premiums are paid for three full policy years and the policy stays in effect for these 3 years. Here’s what paid out as the surrender value: 

• Guaranteed Surrender Value: The guaranteed surrender value is equal to the percentage of the total premium payments. The percentage of total premium is calculated excluding the net of taxes, extra premiums paid and any extra rider premiums paid. This percentage depends upon the policy term selected by the policyholder and the policy year when the plan is being surrendered. 

Guaranteed surrender value also includes the surrender value of the simple revisionary bonuses, if any. Here the surrender value is equal to the vested bonuses multiplied by the related surrender value factors.  

• Special Surrender Value: Special surrender value is paid out to the life insured upon surrender of the policy, only if the special surrender value is more than the guaranteed surrender value. It is calculated as the discounted value of the sum of the vested bonuses and the maturity paid-up sum assured. 

Paid-up Value

In case the life assured fails to pay the premium for at least 2 years of the policy and the plan is not revived then all the benefits offered by the policy are ceased after the completion of the grace period and no benefits will be offered to the policyholder.

If, two full-year policy premiums are dully paid and subsequent premiums are not dully paid then the policy will continue as a paid-up policy. Under the paid-up policy the sum assured offered as the death benefit is known as Death Paid-up Sum Assured.  The paid-up sum assured is equal to:

Number of premium paid/ total number of premium to be paid X sum assured on death

Similarly, the maturity benefit offered is equal to

Number of paid premium/ total number of premium to be paid X sum assured on maturity 

Required Documents 

To avail of the benefits offered by the LIC Jeevan Labh plan, there are certain documents that should be kept hand. Let’s take a look at it.

• Address Proof
• Other KYC documents: Adhaar Card, PAN Card, Tax Details, etc.
• Age Proof
• Properly filled Proposal form/ Application form
• Medical Diagnosis Reports as required 
• Medical History

Policy Exclusions of LIC Jeevan Labh

The LIC Jeevan Labh policy rejects the claim filed in case of the suicide of the life assured.

1. If the life assured commits suicide within 1 year of the policy's initiation, 80 % of the premiums paid to date are returned to the beneficiary of the policy, provided the policy is in force.
2. If the life assured commits suicide after completion of 1 year from the date of policy revival, higher of acquired surrender value or 80% premiums paid to date will be paid. 

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