LIC Jeevan Labh (Plan 736)

Read on to know more about the LIC Jeevan Labh 736 plan in detail.

LIC Jeevan Labh (Plan 736)- An Overview

LIC Jeevan Labh Plan 736 (previously known as LIC Jeevan Labh 936) is a non-linked, with-profit Endowment Assurance plan with a limited premium paying frequency that combines the benefits of life protection and savings. The Jeevan Labh policy by LIC of India is an ideal choice for savings, increased returns, and insurance protection, all in one product. It provides high returns at a lower premium compared to the sum assured it gives in return.

LIC Jeevan Labh Plan Eligibility Criteria

Let’s take a look at the eligibility criteria of the Jeevan Labh LIC policy.

Key Features of LIC Jeevan Labh (Plan 736)

Limited Premium Payment Option: Pay premiums for a limited term, such as 10, 15, or 16 years, while enjoying coverage for an extended period.

Flexible Coverage Duration: Choose the policy term for how long you need life protection from 16, 21 and 25 years policy term options.

Customizable Premium Payment Terms: Select a premium payment schedule that suits your financial convenience.

Death Benefit Payout Flexibility: Opt to receive the death benefit as a lump sum or in instalments, based on your preferences.

Rider Benefits for Enhanced Protection: Adding riders to your policy can raise your life cover. However, this will require you to pay an additional premium. (You can add a rider for accidental death or a premium waiver benefit rider, or several such options).

High Sum Assured Rebates: The greater your sum assured, the bigger your premium discount will be. Take, for instance, a situation where your sum assured is between 10 and 15 lakhs; the rebate amount in that case will be 3% of the BSA.

Loan Facility: Policy loans can be availed to address liquidity needs during the policy term.

Easy Plan Calculation: You can calculate your Jeevan Labh LIC plan premium and maturity amounts through the LIC Jeevan Labh premium calculator and the LIC Jeevan Labh 836 maturity calculator, respectively, which are available on the official LIC website.

Benefits of LIC Jeevan Labh 736 Plan

Here is a list of benefits of the Jeevan Labh LIC policy

Death Benefit
The insurer pays the death benefit to the beneficiary in case of the insured person's death during the policy's tenure. The death benefit under Jeevan Labh plan 736 (formerly called LIC Jeevan Labh plan 936) will be either of the following -

• Basic sum assured amount

• 7 times the annualized premium

The final death benefit on the policyholder's death will include the highest of these two plus a vested simple reversionary bonus and a final additional bonus (if any). The death benefit shall not be less than 105% of the total paid premiums.

Maturity Benefit
If the policyholder survives the entire policy tenure and has been paying due premiums till the end, he/she get the maturity benefit. It equals the basic sum assured plus a vested simple reversionary bonus and final additional bonus (if any).

• Option to receive Death or Maturity Benefit in Instalments
  Under the LIC of India Jeevan Labh Plan, receiving the death benefit in installments instead of the full amount at once is a helpful option. This option is available in both active (in-force) and paid-up policies.
  The policyholder or the life assured (if 18 years or older) can choose to receive the death claim over 5, 10, or 15 years, either fully or partially. This can be a fixed amount or a percentage of the claim amount.

Profit Participation
The LIC Jeevan Labh plan is participating in nature, and if the plan is fully active, the policyholders are liable to receive the simple reversionary bonuses mentioned by the company. A final additional bonus will also be given when a death claim has been filed for death or maturity.

Tax Benefits
The premium paid towards the Jeevan Labh LIC policy up to the maximum limit of Rs.1.5 lakh in a financial year and the maturity proceeds are tax-exempt under Section 80C and 10(10D) of the Income Tax Act, 1961.

How Does LIC Jeevan Labh 736 Plan Work?

Let’s use an example to understand how Jeevan Labh LIC plan works:

Say that Ravi (30 years old) wants to purchase the LIC Jeevan Labh 736 plan with the following coverage options -

Basic Sum Assured (BSA) – Rs. 10 Lakhs

Policy Term - 21 years

Premium Paying Term - 15 years

LIC Bonus Rate 2020-21 – Rs. 44 per Rs. 1000 BSA

Using the LIC Jeevan Labh Premium Calculator, the annual premium comes to Rs. 54,707.

Death benefit to the family if Ravi dies in the 10th year of the policy

Higher of (7 x 54,707 = Rs. 3.82 Lakhs) or the BSA (Rs. 10 lakhs), which means the nominee will receive the latter.

Over 10 years, the bonus will be equal to Rs (44 x 10,00,000/1,000) x 10 = Rs. 4.4 Lakhs.

The total death benefit will be equal to Rs (10,00,000 + 4,40,000) = Rs. 14,40,000.

Maturity benefit if Ravi survives the entire policy term of 21 years

He will get the BSA (Rs. 10 lakhs) plus accrued bonuses.

The total bonus amount for 21 years will be equal to Rs (44 x 10,00,000/1,000) x 21 = Rs. 9.24 Lakhs.

The final maturity value at the end of 21 years will be equal to Rs. 19.24 lakhs.

Note: You can easily calculate the premium using LIC Jeevan Labh Calculator. The calculator for Jeevan Labh plan is available as LIC Jeevan Labh 936 premium and maturity calculator or LIC Jeevan Labh 836 premium and maturity calculator. All of these work similar to a standard LIC calculator.

Policy Tenure: The entire length of time a policy is in force and capable of providing coverage; Premium Paying Term: The length of time for which the policyholder is required to pay premiums to keep the insurance policy in force; LIC Jeevan Labh premium chart: A table showing the premium amounts depending on the policyholder's age, sum assured, policy term and premium paying term.

LIC Jeevan Labh Additional Riders

Under LIC Jeevan Labh Policy, there are four optional riders, which the policyholder can avail by paying an additional premium. Only 1 of the two accidental benefit riders can be purchased with the LIC Jeevan Labh Plan. Rider benefits can be purchased along with the base plan to increase the policy coverage.

LIC’s Accidental Death and Disability Benefit Rider

You can add this rider to your active LIC Jeevan Labh plan at any time, as long as both the rider and base policy have at least 5 years of premium payments remaining. It’s available until the policyholder turns 65, with coverage lasting up to age 70. If the policyholder dies in an accident, a lump sum is paid. If an accident causes a disability (within 180 days), the same amount is paid in monthly installments over 10 years. Plus, future premiums for both this rider and an equal portion of the base plan are waived.

LIC’s Accidental Benefit Rider

You can buy this rider at any point during the premium payment term of the base Jeevan Labh LIC plan, on the condition that the base plan has at least five years remaining in its premium paying term. The benefits of this rider are available only during the premium paying period. Unlike the other rider, this one covers only accidental death, not disability.

LIC’s Term Assurance Rider

This rider can only be added when you purchase your LIC Jeevan Labh policy. Once included, it remains active for the entire policy term. In the unfortunate event of the life assured's death during this period, a lump sum amount equal to the Term Rider Sum Assured on Death will be paid to the nominee.

LIC’s Premium Waiver Benefit

This rider can be added to an active LIC Jeevan Labh policy, but only on a policy anniversary and within the premium-paying term, with at least 5 years remaining. It’s allowed only if the life assured is a minor when opting for the rider. It’s not available if the total of the rider term and the proposer's age exceeds 70.
If the proposer passes away, future premiums under the base policy are waived during the rider term. After the rider term ends, any remaining premiums must be paid by the life assured; otherwise, the policy becomes paid-up. Total premiums for all riders combined cannot exceed 30% of base plan premiums.

LIC Jeevan Labh Policy Details

Below are some Jeevan Labh LIC policy details that will help policyholders understand the plan better.

Grace Period
A grace period of 30 days should be given for payment of annual, half-yearly, and quarterly premiums and 15 days for monthly premium payment mode from the date of the first unpaid premium.

Free-look Period
If the policyholder is not satisfied with the T&CS of the policy, the policy will be returned to the company within 30 days from the receipt date of the physical or electronic copy of the policy documents.

Paid-Up Value
If the life assured fails to pay premiums after regularly paying them for at least 1 year, the policy acquires a paid-up value. The sum assured then reduces based on the premiums paid.
The reduced paid-up sum assured is equal to:
Number of premiums paid/ total number of premiums to be paid X sum assured on death or maturity.
Additionally, a paid-up policy will not be eligible to participate in future profits. However, any vested simple reversionary bonuses will remain attached to the paid-up policy. Riders do not accumulate any paid-up value, and their benefits will cease if the policy lapses.

Loans
With Jeevan Labh LIC allows a loan facility after the first year’s premium is paid. This benefit provides financial support when needed, making the LIC 736 plan details even more attractive.
Under In-force policies

• Before payment of two full year’s premiums- 50%

• After payment of two full year’s premiums- 80%

Under Paid-up policies

• Before payment of two full year’s premiums- 40%

• After payment of two full year’s premiums- 70%

Policy Revival
Under the LIC Jeevan Labh Plan 736, a lapsed policy can be revived within 5 consecutive years from the date of the first unpaid premium and before maturity, subject to terms and conditions.

Rebate
LIC Jeevan Labh Plan (previously, LIC Jeevan Labh Plan 936), offers premium rebates that enhance its value. It combines savings and protection with cost-saving benefits.
Premium Frequency Rebate:

• Annual premiums: 2% rebate

• Half-yearly premiums: 1% rebate

• Quarterly and Monthly premiums: Nil.

High Sum Assured Premium Rebate:

• ₹2-4.9 lakh: Nil.

• ₹5-9.9 lakh: 2% rebate

• ₹10-14.9 lakh: 3% rebate

• ₹15 lakh and above: 3.50% rebate

Policy Surrender Value
LIC Jeevan Labh Plan 736 (previously plan no. 936) acquires a surrender value if the premiums are paid for at least two full policy years. Policyholders will receive either the Guaranteed Surrender Value or the Special Surrender Value, whichever amount is higher. It depends on the total premium paid, the year of surrender, and the policy term.

Policy Termination
The plan shall automatically and instantly terminate on the occurrence of these events:

• When the lump sum death benefit or the final installment of the death benefit is paid.

• When the surrender benefits under the policy are settled.

• If the settlement option was not chosen on the maturity date.

• Upon payment of the final installment under the settlement option.

• In case of default in loan interest payment.

• If the policy has not acquired paid-up status and is not revived within the revival period.

• Upon payment of the amount due, a free look cancellation.

• In the event of forfeiture.

Required Documents for LIC Jeevan Labh Plan

To avail of the benefits offered by the LIC Jeevan Labh plan 736 (previously called LIC Jeevan Labh 936), these documents should be kept handy -

• Address Proof

• Other KYC Documents: Adhaar Card, PAN Card, Tax Details, etc.

• Age Proof

• Properly filled proposal form/ application form

• Medical diagnosis reports as required

• Medical history

LIC Jeevan Labh 736 vs LIC Jeevan Labh 836 vs LIC Jeevan Labh 936

Here is a detailed comparison table highlighting the key differences between the LIC of India Jeevan Labh Plan versions 736, 836, and 936.

Policy Exclusions of LIC Jeevan Labh

The LIC Jeevan Labh plan rejects any claim filed in case of the suicide of the life assured.

If the life assured commits suicide within 1 year of the policy's initiation, 80 % of the premiums paid to date are returned to the beneficiary. If the life assured commits suicide after the completion of 1 year from the date of policy revival, acquired surrender value or 80% of premiums paid to date is offered based on whichever is higher.

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