The foundational aspect of LIC Jeevan Labh and LIC Jeevan Lakshya is to offer benefits of protection and savings. However, a comparison between the two will draw unique features that serve to address the varying needs of policyholders. Let’s briefly discuss the two plans and find out how they are different from each other.Read more
LIC Jeevan Lakshya is designed to offer a financially secured future for the family of the policyholder. An important aspect of this plan is its annual income benefit that is offered to the dependents in the event of the policyholder’s unfortunate demise. Further, LIC offers a maturity benefit on surviving the duration of the policy term.
Some other important features of the plan include.
If the policyholder dies while the policy is still in force, assign nominees are eligible to receive the sum assured on deaths.
The annual income benefit scheme offers the nominees a sum equal to 10% of the basic sum assured every year till the date of maturity, following the death of the policyholder.
If the life assured survives the duration of the policy they are entitled to an amount equal to the basic sum assured as maturity benefit.
LIC Jeevan Lakshya participates in the profits of the company which entitles one to receive additional bonuses along with the sum assured on death or maturity.
One can avail of the following riders:
LIC's accidental death and visibility benefit the rider.
LIC’s accident benefit rider.
LIC’s new term assurance rider.
LIC’s new critical illness benefit rider.
LIC Jeevan Labh is an endowment-based insurance policy that offers assured benefits in addition to returns in the form of bonuses. If you wish to secure the future of your family financially, LIC pays the sum assured on death to your family under the Jeevan Labh cover. Notably, the policy also offers a loan facility that you can avail of for urgent capital requirements.
Let’s look at some of the common features of LIC Jeevan Labh:
Beneficiaries are entitled to the sum assured on death of the life assured. Further, the benefit amount can also be received in installments throughout 5, 10, or 15 years.
The sum assured on maturity is payable in installments or a lump sum payout. This amount acts as your savings.
The riders available under this policy are:
LIC’s accidental death and visibility benefit rider
LIC’s accident benefit rider
LIC’s new term assurance rider
LIC’s new critical illness benefit rider
LIC’s premium waiver benefit rider
Based on LIC’s financial valuation LIC Jeevan Labh entitles policyholders to receive a part of the profits made by the company in the form of bonuses.
|LIC Jeevan Lakshya||LIC Jeevan Labh|
|Annual Income Benefit|
|10% of the Basic Sum Assured||XX|
|Age At Entry|
|Minimum: 18 years Maximum: 50 years||Minimum: 8 years Maximum: 59 years|
|Maximum Maturity Age|
|65 years||75 years|
|13 to 25 years||16/ 21/ 25 years|
|Premium Paying Term|
|Policy term minus 3 years||Limited (10/ 15/ 16 years)|
|Higher of: 7 times the annual premium; or 110% of the Basic Sum Assured||Higher of: 7 times the annual premium; or Basic Sum Assured|
|Minimum Sum Assured|
|Sum Assured On Death|
|125% of basic sum assured or; 7 times the annualized premium||Absolute sum assured or; 7 times the annualized premium|
|A simple reversionary bonus is payable on maturity of the policy, irrespective of the policyholder's survival.||A simple reversionary bonus is added from the date of risk commencement till the end of the policy term, or death (whichever is earlier)|
Endowment Policy - Both are endowment-based life insurance policies offering benefits of savings and protection.
Benefits in Installments - Death benefits can be received in installments if the policyholder chooses to. Further, with the settlement option, one can receive the maturity benefits in installments as well across 5,10,15 years.
Profit Participation - Under both LIC Jeevan Labh and LIC Jeevan Lakshya, one can enjoy a share of the profits made by the company in addition to death and maturity benefits.
Loan Facility - If you need capital to fund urgent requirements, both policies allow policyholders to avail of loans subject to the surrender value acquired.
Riders and Add-Ons - As already mentioned above both these policies feature a host of riders that one can add to their life cover. These riders can be used for enhanced protection against accidental deaths, critical illnesses, etc.
Market Risks - Both these policies are non-linked, meaning that the funds invested in these are not associated with market fluctuations. Therefore, these are low-risk policies offering assured returns.
To offer an estimation of the kind of benefits receivable under LIC Jeevan Labh and LIC Jeevan Lakshya, we have considered a sample 35-year-olds person who has assured a sum of Rs. 5 lakhs. Based on the policy term and the premium paying term demonstrated in the table below, we have calculated the maturity benefits against each plan.
|Features||LIC Jeevan Lakshya||LIC Jeevan Labh|
|Age||35 years||35 years|
|Sum Assured||Rs.5 Lakhs||Rs.5 Lakhs|
|Policy Term||25 years||25 years|
|Premium Paying Term||22 years||16 years|
|Total Premium Amount||Rs.4,75,433||Rs.3,70,268|
As indicated in the table above despite the total premium amount being significantly higher for LIC Jeevan Lakshya, the maturity benefit is higher in the case of LIC Jeevan Labh (although not significantly). Please note that the premium paying term for each of these plans differs as per the policy term chosen. This illustration should not be construed as definitive and one should carefully evaluate their options after careful research.
LIC Jeevan Lakshya and LIC Jeevan Labh are fundamentally based on the idea of comprehensive insurance, for potential buyers. However, as highlighted above these two plans come with unique features that serve to fulfill the varying needs of policyholders. Remember that insurance in any form is extremely crucial if you are the only earning member and have dependence to take care of. It is therefore advisable to thoroughly research each aspect to come to the final decision. The comparison should be a good start to base your research on.
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