Sum Assured in LIC Jeevan Labh

LIC Jeevan Labh was launched on 01.02.2020. It is a comprehensive endowment plan that fulfils the financial needs of the beneficiary in case of the uncertain death of the policyholder. The sum assured on death and maturity of the policy depends on the unique needs of each buyer and their premium paying capacity. However, LIC has set the minimum sum assured at Rs. 2 lakhs. Additionally, you can also take a loan against this policy assuring you of liquidity during times of need.

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LIC Jeevan Labh: Sum Assured on Death

Under LIC Jeevan Labh, the sum assured on death is pre-decided by the life assured at the time of purchase depending on the potential needs of the policyholder’s family. Based on the sum assured of LIC Jeevan Labh, you are liable to pay a premium amount for a term of 10, 15, or 16 years. The premium paying term further depends on the policy term that you choose. 

Death benefit, a combination of sum assured plus bonuses, is paid to the assigned beneficiaries only if the death of the policyholder occurs while the policy is in force. 

The sum assured given is higher of: 

  • 7 times the annualized premium or 

  • Basic sum assured

Things to Keep in Mind 

  • The sum assured on death under LIC’s Jeevan Labh policy cannot be less than 105% of the total premium payments paid till death of the life assured.

  • The death benefit can be received by the dependents of the life assured as a lump sum or income, depending on the option exercised by the policyholder.

  • The final amount payable to the assigned beneficiaries is inclusive of the sum assured on death and applicable bonuses in the form of a simple reversionary bonus or final additional bonus. 

  • In case the premiums have not been duly paid for two consecutive years, all the benefits payable shall cease.

  • If premium payments were made for a minimum of two years, LIC Jeevan Labh shall subsist as a paid-up policy. Under a paid-up policy, the LIC Jeevan Labh sum assured on death reduces to an amount called the ‘Death Paid-Up Sum Assured’.

LIC Jeevan Labh: Sum Assured on Maturity 

The sum assured on the maturity of LIC’s Jeevan Labh cover is the maturity benefit that the life assured is entitled to on surviving the entire duration of the policy. The sum assured on maturity is an amount equal to the basic sum assured at the time of policy inception.

Things to Keep in Mind 

  • The sum assured on maturity under LIC’s Jeevan Labh cover is paid along with additional bonuses as declared by LIC post its financial valuation. 

  • Under the settlement option, LIC is liable to pay the sum assured on maturity in installments over 5 to 15 years.

  • Should you choose to discontinue premium payments after two years, the maturity benefit reduces to an amount equal to the ‘Maturity Paid-Up Sum Assured’.

  • However, the reduced sum is only payable to you if the initial two years’ premiums have been paid in full. 

Rebates on Higher Sum Assured with LIC Jeevan Labh

LIC offers discounts if you choose a sum assured of Rs. 5 lakhs and above. The rebates are subject to a fixed percentage of the basic sum assured. 

Sum Assured (in Rs.) Rebate ( in %)
Rs.5,00,000 to Rs.9,90,000 1.25% of basic sum assured 
Rs.10,00,000 to Rs.14,90,000 1.50% of basic sum assured
Rs. 15,00,000 and above 1.75% of basic sum assured

Sum Assured in LIC Jeevan Labh as Installments

The LIC Jeevan Labh policy allows its customers to receive the sum assured on the death of the policyholder or policy maturity in installments over a certain period. 

Should you choose to receive the death benefit in installments, you can pick a period of 5, 10, and 15 years. In case of maturity benefits, you can opt for the settlement option to receive the sum assured in installments on a monthly, quarterly, half-yearly, or yearly basis.

However, you must note the following clauses for installments:

  • If the mode of an installment is monthly, the minimum installment amount is Rs. 5,000.

  • If the mode of an installment is quarterly, the minimum installment amount is Rs. 15,000.

  • If the mode of an installment is half-yearly, the minimum installment amount is Rs. 25,000.

  • If the mode of an installment is yearly, the minimum installment amount is Rs. 50,000.

Wrapping It Up!

The sum assured in LIC Jeevan Labh is an important amount and should only be decided upon after carefully considering inflation and your family’s needs for the long term. The sum assured should be sufficient to take care of all the future needs both in your presence and absence. 

You must note that there is no cap to the maximum sum assured. You must decide the amount which best suits your family’s future financial needs and goals. As the plan offers both death and maturity benefits, you can decide the benefits accordingly.

*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:-
++Returns are 10 years returns of Nifty 100 Index benchmark

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