LIC Jeevan Labh is a non-linked, participating policy with a limited premium paying term. The life assured receives life coverage for up to 25 years against the premiums paid. Further, on surviving the policy tenure, one can also enjoy maturity benefits. This endowment-based policy has been popular among the masses owing to its wide-ranging benefits and flexibility.Read more
It is a type of endowment insurance scheme that serves to protect the future of the life assured’s family, in addition to offering scope for increased savings. The duality of this plan has made it one of the best-selling policies by LIC.
Some of the key features of the plan are:
Policyholders can choose from a policy tenure of 16, 21, or 25 yrs.
Corresponding to the policy terms mentioned above, the premium paying terms (PPT) are - ten, 15, and 16 yrs, respectively.
Policyholders can choose to receive death benefits in installments throughout 5, 10, or 15 years.
The sum assured on maturity is payable as a lump sum or in installments.
Anybody in the age bracket of 8 to 59 years is eligible to invest in the LIC Jeevan Labh policy.
Furthermore, there is no limit to the maximum sum that one can assure under this policy.
Given the participating nature of the policy, policyholders receive additional bonuses based on the company profits.
One can enhance their life cover with extra protection against accidental deaths, disability, and critical illnesses through various riders that come with this plan.
If you find yourself amid a financial emergency, you can avail of loans under this policy as well.
The revised LIC Jeevan Labh policy offers a host of benefits. The fundamental aspect of the policy is to offer financial security to the dependents of the life assured. If you choose to invest in this policy, you can rest assured that the future of your family is secured and their needs are looked after in the event of your unfortunate demise.
Further, LIC’s Jeevan Labh offers significant flexibility in terms of the policy term, the premium paying term, age, among others. This allows you to personalize the policy based on your current and potential future needs.
Above all, profit participation entitles the policyholder to simple reversionary bonuses, in addition to assured maturity benefits if you survive the policy term. All of these are opportunities for you to maximize your savings and create a sufficient corpus to fund your long-term goals.
On purchasing the policy, you can also enjoy tax savings. The premiums paid and the maturity amount is exempted from IT U/S 80C and 10(10D) of the IT Act, 1961.
Another noteworthy feature that makes this plan a good choice for buyers is the rebate on premium payments for higher sums assured. In addition, you are protected against market fluctuations that may be a risk with market-linked investments.
All the above-mentioned factors make LIC Jeevan Labh a low-risk and well-favored life insurance scheme.
Despite the numerous reasons to invest in this policy, there are certain limitations that you might want to consider before making a purchase. For instance:
The annualized returns are significantly lower than other savings schemes such as the public provident fund (PPF).
The policy does not acquire any surrender value for the first two years of the policy term. Should you choose to close the policy in these two years, LIC is not liable to offer any benefits.
It is a non-linked insurance scheme and therefore does not participate in market-linked financial instruments. As such, the returns are significantly lower.
A major factor that limits the purchase of this plan is that LIC does not disclose the rate of returns and bonuses.
The premium amount is fixed at the time of policy inception, so one does not have the option to increase or decrease the premium as per their choice.
Another factor is the service tax levied by the government on insurance policies which increases the premium amount payable.
While these factors may discourage you, it is important to keep in mind that life insurance in any form is extremely crucial. There will be pros and cons attached to each policy, and one should thoroughly research before coming to a decision.
We have discussed both the benefits and the shortcomings of LIC’s Jeevan Labh policy. Any of these factors should not deter you from buying insurance. The ultimate goal should be to leave behind a financial backup for your family in your absence. Despite the shortcomings, LIC Jeevan Labh comes with attractive features and would make for a good comprehensive alternative to having no insurance at all. However, you should conduct your research and see for yourself if the policy fits your needs.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ