Is LIC Jeevan Labh a Good Policy?

About LIC Jeevan Labh

LIC Jeevan Labh Policy is a type of endowment insurance scheme that protects 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 of India. 

Some of the key features of the Jeevan Labh plan offered by LIC 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 - 10, 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 purchase 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.

• The policy offers a loan facility that helps when you need liquid money for emergencies.

Should You Purchase LIC Jeevan Labh Policy?

The revised LIC Jeevan Labh 736 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. Here are some LIC Jeevan Labh benefits: 

• Flexibility: LIC 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. You can also use LIC Jeevan Labh Calculator to estimate the premium and returns amount.

• Profit Participation: 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.

• Tax Benefits: 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.

• Rebates: Another noteworthy feature that makes this plan a good choice for buyers is the rebate on premium payments for higher sums assured.

• Risk-free: It is a non-linked insurance scheme and therefore does not participate in market-linked financial instruments. This leads to relatively low but risk-free returns that do not fluctuate due to external factors.

All the above-mentioned factors make LIC Jeevan Labh a low-risk and well-favored life insurance scheme.

Limitations of LIC Jeevan Labh Policy

Despite the numerous reasons to invest in this policy, there are certain limitations that you should be aware of 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.

• A major factor limiting this plan's purchase 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 LIC Jeevan Labh disadvantages may discourage you, it is important to keep in mind that life insurance in any form is extremely crucial. Each policy will have pros and cons, and one should thoroughly research before making a decision. However, having any life insurance policy is better than not having it at all.

The Final Word!

We have discussed both the benefits and the limitations 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 limitations, 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 LIC Jeevan Labh review and see for yourself if the policy fits your needs.

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