LIC’s Jeevan Labh 836 was designed to offer an endowment-based insurance scheme for the public. The plan comes with benefits of life protection as well as savings. A popular feature of the plan is the policyholders can avail of loans to support their liquidity needs. The amount of loan that one can avail of can be easily estimated with the help of LIC’s Jeevan Labh 836 loan calculator.Read more
Let’s discuss the plan benefits in brief to give you an idea about the policy.
LIC revised Jeevan Labh 836 to the newly introduced LIC’s Jeevan Labh 936. It is a limited premium paying, a participating plan that financially secures the family of the life assured on their untimely demise. In addition, the policy participates in the company's profits, which ensures increased income in the form of bonuses.
Important benefits offered by LIC’s Jeevan Labh 836 are:
Death Benefit - The assigned beneficiaries of the life are assured to receive a death benefit equal to the sum assured at inception. The amount can then be used to fund various needs in the future. Bonuses, as applicable, are added to the sum assured and paid out to the claimant. Notably, the death benefit amount can be received in installments over 5,10, or 15 years, if the life assured chooses to.
Maturity Benefit - If the policyholder survives the policy term, (s)he is entitled to a sum assured on maturity along with applicable bonuses. This feature is an opportunity for the life assured to maximize their savings capital.
Bonuses - Based on LIC’s annual valuation, the company declares simple reversionary and final additional bonuses. The bonuses, however, depend on the profits made by the company.
Loan - LIC Jeevan Labh 836 loan facility is available for policyholders to take care of their capital needs. LIC Jeevan Labh 836 loan calculator can help you figure out the maximum amount that will be granted by the insurer as a loan.
We will discuss the loan facility in further detail in the next section.
With LIC’s Jeevan Labh 836 (now withdrawn), you can avail of loans to finance urgent needs that may arise during the policy term. Please note that there are certain conditions that you should be mindful of for the loan to process successfully.
You can raise a request for LIC’s Jeevan Labh 836 loan facility only while the policy is in force.
The loan amount is subject to the surrender value acquired by the policy.
A loan can only be availed if the policyholder pays two years’ premiums in full. This is because the policy starts acquiring a surrender value after two years.
There is a cap on the maximum amount that can be availed by the life assured.
The maximum loan amount for in-force policies is defined as 90% of the surrender value.
The maximum loan amount for paid-up policies is defined as 80% of the surrender value.
The interest on your loan shall compound on a half-yearly basis at a rate specified by LIC.
LIC holds the right to foreclose your LIC Jeevan Labh policy should you default on your interest payment.
The minimum tenure of the loan is set at 6 months.
In the event of the policyholder’s death during the loan period, LIC will deduct the interest amount and the outstanding loan amount from the death benefit payable.
Note that LIC uses the reducing balance method to estimate the interest payable. This method takes into consideration the outstanding principal loan amount (instead of the entire principal amount) to calculate the interest. This is because you have already paid a proportion of the principal in the form of premiums. As you pay your EMIs, the outstanding loan amount decreases along with the interest payable in this method.
As discussed above, the loan amount has to be within the defined maximum limit set by LIC. It is 90% of the surrender value in the case of in-force policies and 80% in the case of paid-up policies. Further, the interest rate on the loan availed varies from person to person and is compounded half-yearly.
Let’s assume a sample person who has assured a sum of Rs.10 Lakhs for a policy term of 21 years. The annual premium amount comes out to be Rs.48,000.
Now let’s calculate the maximum amount of loan that (s)he can avail of from the 5th policy year up to the 10th year based on the corresponding surrender value. The maximum loan amount that can be granted is 90% of the surrender value in this case because it is an in-force policy.
|Policy Year||Total Premium Paid (Rs.)||Surrender Value Factor (%)||Final Surrender Value (Rs.)||Maximum Loan Amount (Rs.)|
The above table offers a good estimate of the loan amount that you can avail of across different policy years for the sample considered. You can easily calculate it against the sum assured chosen by you and the corresponding premium payments. For your information, the surrender value factors are declared by LIC on the policy brochure. You can refer to LIC Jeevan Labh 836 Surrender Value Calculator to understand how we came to the final surrender values in the table above.
Financial emergencies do not come knocking on the door. They come unannounced and oftentimes, under the worst possible circumstances. It is, therefore, prudent to have a financial backup. The loan facility offered by LIC's Jeevan Labh ensures that you have help whenever you need it. As discussed above, you can make use of the LIC Jeevan Labh 836 Loan Calculator to come at a decent estimate of the amount that you need against the maximum that you can avail.