Sukanya Samridhi Yojana and LIC Jeevan Labvh policy are two completely different savings schemes. While the former is specific to securing the financial future of girl children in the country, the latter is an insurance policy that anybody in the age bracket of 8 to 59 years can invest in.Read more
As already mentioned, a comparison between the two will result in vast differences, given that both serve entirely different purposes. The following table highlights distinguishing features of each of these schemes so that you can make a decision that perfectly suits your needs.
|Factors||Sukanya Samriddhi Yojana||LIC Jeevan Labh|
|Type of Plan||It is a small deposit scheme to create a savings corpus for girl children.||It is an endowment-based insurance scheme that serves as a life cover along with savings.|
|How to buy?||The government introduced scheme is now offered in association with all the leading banks of the country and post office.||The policy can only be purchased through the official network of LIC.|
|Eligibility Criteria||Any parent/guardian with a girl child below the age of 10 years.||Anybody in the age bracket of 8 to 59 years.|
|Primary Purpose||To save for and fund the higher education and marriage of a girl child.||To create a life cover for the policyholder and secure dependents’ financial future on her/his death.|
|Policy Term||The policy matures after 21 years from the date of opening the account.||A policy term of 16 years, 21years, or 25 years can be chosen at inception.|
|Payment period||Deposits can be made for 15 years from the date of opening the account.||Premiums can be paid for 10 years, 15 years, or 16 years depending on the policy term chosen.|
|Deposit Amount vs. Sum Assured||Minimum Deposit Amount: Rs.250 Maximum Deposit Amount: Rs.1.5 Lakhs||Minimum Sum Assured: Rs.2 Lakhs Maximum Sum Assured: No limit|
|Interest Rate||High at 7.6%||Low|
|EEE Tax Benefit
Tax savings U/S 80C
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Let's briefly study the two plans to establish unique features associated with each.
The Sukanya Samridhi Yojana is a savings scheme for girl children below the age of 10 years. It was launched under the ‘Beti Bachao Beti Padhao’ campaign by the prime minister of India. This scheme was specially designed to meet the financial needs of young girls and as a measure to promote higher education for them. This encourages parents to work towards their betterment instead of considering them a burden.
The plan comes with several advantages that have led to a lot of people investing in it. The primary driver is the high rate of interest which is 7.6% for the current year. Couple that to the EEE (exempt exempt exempt) tax benefit, and you have created for your daughter a significant savings corpus.
The following section discusses the key features of Sukanya Samridhi Yojana
Deposit Amount - The minimum deposit amount is fixed at Rs.250, and the maximum amount has been capped at Rs.1.5 Lakh every year. Deposits can only be made for 15 years from the date of opening the account.
Account Details - A Sukanya Samriddhi Yojana account can only be opened in the name of a girl child under the age of 10 years. Further, only one account can be opened per child. However, in the case of twins, a maximum of two accounts can be opened for each child.
Interest Rate - The interest rate associated with the Sukanya Samriddhi Yojana is one of the highest in the country. The government revises the rate every quarter. Currently, the interest rate for the Sukanya Samriddhi account is 7.6% per annum. The accrued interest amount is added to the account at the end of every financial year.
Partial Withdrawal - Up to 50% of the balance in your Sukanya Samriddhi Yojana account can be withdrawn by the account holder for education purposes on the condition that she has attained the age of 18 years or completed 10th standard.
Tax Benefit - The tax benefit under the scheme has mainly driven the interest of people. Under the EEE tax benefit, the deposited amount, the amount of interest, and the maturity benefit are all exempt from tax.
All the above-mentioned pointers make the Sukanya Samriddhi Yojana a good option if you have a girl child and you want the best for her future.
LIC’s Jeevan Labh is an endowment policy that serves to protect the future needs of your family if you are not around. This life insurance policy allows you to save for the financial needs that may arise in the future. The benefit amount in the form of death or maturity benefits will enable you to fund any capital needs in case of an emergency or otherwise.
Some of the key elements of LIC Jeevan Labh are:
Flexible Options - The policy allows you to choose from three possible policy terms, viz. 16 years, 21 years, or 25 years. The corresponding premium payment amount for the chosen policy terms are 10 years, 15 years, 16 years, respectively.
Death Benefit - On your unfortunate demise, the nominees assigned by you are entitled to the sum assured on death. As a policyholder, you have the option to choose to receive the benefit amount in installments.
Maturity Benefit - Even if you manage to survive the entire duration of the policy term, LIC is liable to pay you the sum assured on maturity. With the maturity benefit as well, you have the option to receive it in installments by opting for the settlement option.
Profit Participation - You are entitled to get bonuses along with the death and maturity benefit amount based on the profits made by the company in a financial year. The bonus rates are declared by the company based on its annual valuation.
Despite the differences that we discussed above, Sukanya Samriddhi Yojana and LIC Jeevan Labh resemble the savings aspect. Both schemes offer enough scope for account holders to save and create a decent corpus to fund various high-capital requirements. Remember, the Sukanya Samriddhi Yojana can only be purchased if you have a daughter below the age of 10, while there are no such limitations to LIC Jeevan Labh.
Now that you are aware of the difference between Sukanya Samriddhi Yojana and LIC Jeevan Labh, you are in a good position to make a suitable choice per 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
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