LIC, one of the largest insurers of India offers a wide range of life insurance products and services, ranging from term plans to savings and investments. When it comes to a young population, LIC’s Jeevan Labh plan is one of the right choices. The endowment plan offered by LIC fulfills the requirements for life cover and savings as a lump sum in this investment policy.Read more
To save money systematically or randomly, numbers of options are available in the form of FD, equity, or bond, and mutual funds. Moreover, tax benefits are an important saving parameter to check under LIC policies. So, Let’s discuss why LIC Jeevan Labh plan is a popular choice among young Indians:
The LIC Jeevan Labh, a non-linked and participating investment plan is a popular option among young Indians because of the flexibility of premium payments. It provides long-time coverage. The plan offers a limited premium payment option and also, the dual benefits of savings and protection. LIC Jeevan Labh policy not only provides financial help to the policyholder’s family in case of an unfortunate event but also takes care of the future financial requirements of the family even in the absence of the policyholder.
The Premium Payment Term (PPT) is divided into three options – 10, 15, and 16 years for a complete term of 16, 21, 25 years correspondingly. In other words, this simply means that if one pays the premium for 10 years, then the total time with the insurance cover will be in force for PPT 16 years. Likewise, with the PPT of 15 years, the plan will be in force for 21 years, and for 16 years of the Premium payment term, the plan will be in force for 25 years. It is suggested to pay a complete premium on time if you want utmost returns from LIC Jeevan Labh Policy.
The minimum age for entry under this plan is of eight years and the maximum age for entry is of 59 years. The maximum maturity/vesting age is of 75 years. The minimum SA (sum assured) is Rs. 2 Lakh without any upper age limit, dependent on the levels of income. This plan also ensures liquidity requirements through the availability of its loan service.
If the policyholder dies during the policy tenure, the nominee/beneficiary will receive the paid amount of premium with the coverage amount. The coverage of the insurance plan doubles the amount of natural death cover, is payable in case of accidental death. Under this LIC Jeevan Labh Plan, if the policyholder dies within the policy tenure, then all the due premium amounts should be payable as a death benefit (called the Sum Assured amount on death), along with bonuses such as simple vested reversionary and additional final bonuses, if any.
Sum Assured amount on demise: The nominee will receive the highest of,
7X of annualized amount premium
Absolute assured amount paid at the time of death
The death benefit should be lower than 105 percent of the paid premiums till the death date. These premiums are free of taxes.
The maturity benefits of LIC Jeevan are quite profitable in comparison to any other policy obtainable by the Life Insurance Corporation of India (LIC). Sum Assured (SA) received on the date of maturity (equivalent to the SA (basic)), along with the certain type of bonuses simple vested reversionary and additional final bonuses, if any, will be payable by the insurer in a lump sum amount upon the survival after the plan tenure. However, all the due amount of premium is required to be paid in the premium payment term (PPT). 4.5% of tax is allowed on premium in the first year and from the 2nd year, 2.25% of tax on the premium is allowed.
Below is the table illustrating the annual premium amount for Rs. 2 Lakh basic sum assured for standard lives.
|Age (in years)
|Premium Paying Term/Policy Term (in years)
|16 Years Term, 10 years PPT
|21 years term, 15 years PPT
|25 years term, 16 years PPT
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2 percent of tabular premium in annual mode
1 percent of tabular premium in half-yearly mode
No tabular premium in monthly and quarterly mode
Basic Sum Assured:
2,00,000 – 4,90,000 – Nil
5,00,000 – 9,90,000 – 1.25 percent of basic sum assured
10,00,000 – 14,90,000 – 1.50 percent of basic sum assured
15,00,000 and above – 1.75 percent of basic sum assured
The above premium rates indicate why LIC Jeevan Labh is a preferred choice for young individuals. This is because it provides a profitable lump sum at maturity. Tax rebates are available on paid premiums u/s 80C of the Income Tax Act, 1961. If the policyholder is of 30 years of age, the policy of 25 years will be ended at 55 years of age. So, at later ages, the lump sum money will stabilize the future. Also, after the completion of the Premium Payment Term (PPT), the insurance cover will be in force. In case of the insured’s demise, the nominee/beneficiary will get the lump sum and life coverage amount.
Determine your insurance requirements before purchasing the LIC plans. It is always advisable to buy insurance at an early age because the chances of death are lesser and hence the premiums are lower. Accordingly, the lump sum amount will be a good orderly saving plan for the policyholder. Under this plan, the maturity amount is free from any taxes u/s 10(10D) of the Income Tax Act. LIC Jeevan Labh is a preferred choice for young Indians but it depends solely on their financial requirements. As discussed above, policyholders have the option to choose 25 years term with 16 years PPT, 16 years term with 10 years PPT, and 21 years term, 15 years PPT under LIC Jeevan Labh Plan.
*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:- http://bit.ly/3J20bXZ