LIC New Jeevan Anand Plan

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LIC New Jeevan Anand Plan Review

LIC’s New Jeevan Anand Plan is a traditional savings cum and insurance protection plan. This plan is eligible to receive bonus. The risk coverage under this plan continues even after the policy term and the death benefit is paid even if the insured dies after the completion of the policy term. 
 
Launch Date Table Number Product Type Bonus UIN
9th October, 2013 815 Endowment Yes 512N279V01
 

How LIC New Jeevan Anand Plan works

The policyholder chooses the Sum Assured and the Term of the plan when buying the policy. Based on the age of the insured, sum assured and the policy term selected, the premium is determined. The policyholder is required to pay premiums for the entire duration of the policy term. 

If the insured survives till the end of the policy term and all premiums have been paid, a Maturity Benefit would be paid to the policyholder. Maturity benefit would be equal to the Sum Assured + Bonus Amounts which have been received throughout the policy term + any Final Addition Bonus if declared. Now whenever the death of the policyholder happens (even after the policy term), the nominee will additionally get the Sum Assured amount as the Death Benefit.

However, if the insured dies during the policy term, then Death Benefit would be payable to the nominee which would be as follows: the Sum Assured on Death + Vested Bonus till date of death + any Final Addition Bonus. 

The Sum Assured on Death will be as follows: Higher of 125% of the Basic Sum Assured or 10 times the annual premiums paid subject to a minimum of 105% of total premiums paid till death.
 
We will explain the working of LIC New Jeevan Anand with the help of an example.

Example – Naveen, aged 35 years, buys LIC’s New Jeevan Anand Plan. 
Sum Assured = Rs. 5 lakhs
Policy term = 20 years. 

The Annual Premium comes to Rs. 30,273 inclusive of all taxes which is payable for the entire duration of 20 years. 

Other Assumptions:

Simple Reversionary Bonus declared every year = Rs. 45 per 1000 Sum Assured. That means a bonus of 45 x (5,00,000/1,000) = Rs. 22,500 every year. Please note that there is no guarantee that this same bonus rate will be applicable – it could be higher or lower every year.

Final Addition Bonus = Rs. 20 per 1000 Sum Assured. That means a Final Addition Bonus of 20 x (5,00,000/1,000) = Rs. 10,000 when the policy ends.

Scenario 1 – Naveen survives till the end of the policy tenure

In this case, the Sum Assured of Rs. 5 lakhs would be paid along with the simple reversionary bonuses and any Final Bonus declared by the company. 
He gets: Sum Assured + Bonuses declared for 20 years + Final Addition Bonus if declared. That means he get the Maturity Amount of Rs. 5,00,000 + (Rs. 22,500 x 20) + Rs. 10,000 = Rs. 9,60,000 
Also as and when he dies even after the policy term, his nominee will also be eligible to receive the Sum Assured of Rs. 5,00,000

Scenario 2 – Naveen dies in the 17th year of the plan
Here, Naveen’s nominee would get the Sum Assured on Death along with the vested bonus and any Final Bonus. The Sum Assured on death would be higher of 125% of the Basic Sum Assured or 10 times the annual premiums paid subject to a minimum of 105% of total premiums paid till death. So, 
125% of the Basic Sum Assured = 125% of Rs. 5 lakhs = Rs. 625, 000
10 times the annual premium = (30, 273*10) = Rs. 302, 730
105% of all premiums paid = 105% * (30, 273*17) = Rs. 540, 373.
Therefore, the Sum Assured on Death would be the highest of the above options = Rs. 625, 000
His Nominee gets: Death Benefits Payable = Rs. 6,25,000 + Rs. (22,500 x 17) + Rs. 10,000 = Rs. 10,17,500
 

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LIC New Jeevan Anand Policy Benefits

  • Maturity Benefit –On maturity the Basic Sum Assured + accrued bonuses + any Final Bonus is paid to the policyholder.
  • Death Benefit –The death benefit depends on the period when death occurs. 
    • If death occurs during the plan tenure, the Sum Assured on Death + vested bonuses + any Final Bonus is paid to the nominee. 
    • If death occurs after the plan tern, the Basic Sum Assured is paid in addition to the Maturity Benefit already paid. 
The Sum Assured on Death is higher of the following:
  • 125% of the Basic Sum Assured
  • 10 times the annual premium
Subject to a minimum of 105% of the total premiums paid till death.
  • Bonus – Depending on the performance of the company, simple reversionary bonuses are declared under the plan. A Final Bonus might also be paid with the maturity or death benefit. 

 

LIC New Jeevan Anand Maturity Calculator

You can use this to get a fairly accurate estimate of the Maturity Value of LIC New Jeevan Anand plan of yours. The amount of LIC New Jeevan Anand Returns is totally tax free.

New Jeevan Anand Maturity Value Calculator
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Sample Premium Illustration for LIC New Jeevan Anand

Here is the sample tabular premium rates payable by a healthy, non-tobacco user male for different combinations of age and policy term. The Sum Assured is taken to be Rs.5 lakhs.


 
Age  Term 15 years Term 25 years Term 35 years
20 years 39,525 22,150 14,975
30 years 41,225 23,375 16,150
40 years 44,100 25,700 18,550
 

Key features of the LIC New Jeevan Anand Plan

  • The plan participates in bonus declarations which enhance the benefits payable.
  • Premiums are required to be paid for the complete plan duration.
  • The plan provides an additional Accidental Death and Disability Benefit Rider which provides an additional benefit in case of accidental death or disability. 
  • Loans can be taken under the plan if the plan acquires a Surrender Value. 
  • Rebates in premiums are allowed for choosing a high level of Sum Assured and also for paying premiums annually or semi-annually. 


Tax Implication of LIC New Jeevan Anand Plan

Premiums – The premiums paid for the plan are exempt from taxation under Section 80C of the Income Tax Act. The maximum exemption that can be availed is Rs.1.5 lakhs. To claim this exemption, the premium should be restricted to 10% of the Sum Assured selected. 

Maturity Claim – Any amount received on plan maturity is exempt from taxation under Section 10(10D). To claim this exemption, the Sum Assured should be at least 10 times the premium amount paid. 

Death Claim – Death claims received under the plan are free from taxation under Section 10(10D). There is no maximum limit on exemptions of death claims. 


Surrendering, making the policy paid-up or cancelling the plan

Paid-up Value – If the policyholder has paid the first three years’ premiums and future premiums have been not paid, the policy becomes a paid-up policy. The Basic Sum Assured under the plan is reduced in proportion of the number of premiums paid against the total number of premiums payable. Future bonuses are not added and on death or maturity, the reduced Sum Assured along with the vested bonuses is paid.

Surrender Value - If the policyholder wants, he can surrender his policy and avail the Surrender Value. The policy acquires a Surrender Value only if the first three years’ premiums have been paid. Higher of the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV) is paid on surrendering the plan. GSV and SSV are calculated as follows:
  • GSV = (total premiums paid* GSV Factor) + (vested bonus * GSV factor of Bonus)
  • SSV is declared by the company based on its performance. 

Free-look Period – If the policyholder is not happy with the plan, he can cancel the policy within 15 days of the plan issuance. This period is called the free-look period. Upon cancellation, the premium paid net of any applicable expenses would be returned.

Exclusions in LIC New Jeevan Anand Plan

  • If the insured dies due to suicide within 12 months of policy inception only 80% of the premium paid is refunded. 
  • If suicide is committed within 12 months of policy revival, higher of 80% of the premium paid or the Surrender Value is paid.

How to buy the LIC New Jeevan Anand Plan

The plan is an offline plan which can be bought only through the company intermediaries like agents or brokers. One can also buy the plan by visiting the company’s branches or by contacting the company executives. 

Documents required for buying the LIC New Jeevan Anand Plan

To buy LIC’s New Jeevan Anand Plan, one has to submit the following documents:
  • Plan Proposal Form duly filled in and signed
  • Cheque or cash for the first premium
  • A passport sized photograph
  • A valid Identity Proof
  • A valid Address Proof
  • Date of Birth Proof

How to make a claim in LIC New Jeevan Anand Plan 

How to make a maturity or surrender claim?
A maturity claim is easy to make. The policyholder would have to fill and sign the claim discharge form and submit it to the insurer for availing the maturity benefit along with original policy document, NEFT Mandate Form and age proof if age was not admitted earlier. 
In case of surrender, the policyholder should inform the company in writing to avail the surrender value.

How to make a death claim?
In case of a death claim, the nominee should fill up the claim discharge form and submit it to the company along with:
  • Original policy document
  • NEFT Mandate Form for direct settlement of claim into the nominee’s bank account
  • Proof of Title which is the nominee’s Identity Proof
  • Proof of Death - death certificate 
  • Medical treatments availed prior to death 
  • Proof of age if age was not admitted in the policy
  • Police inquest report, newspaper cuttings reporting the accident, copy of driving license for road accidents, post-mortem report, etc. might be required in case of an accidental or unnatural death.

FAQs on LIC New Jeevan Anand Plan

How much bonus is declared under the plan?
The rate of bonus is not fixed. It varies depending on the performance of the insurer and is paid only if the insurer makes a profit in any financial year.

What type of bonus is declared under the policy?
The plan pays simple reversionary bonuses for every year the policy is in force. On death during the plan tenure or on maturity, a Final Bonus might also be paid in addition to the vested bonuses. 

Are riders available under the plan?
Yes, the plan offers an optional Accidental Death and Disability Benefit Rider which can be taken for a minimum Sum Assured of Rs.1 lakh and a maximum of Rs.1 crore by individuals aged between 18 years to 70 years. 

Are there any rebates on the premium?
The plan offers two types of premium rebates. First the high Sum Assured rebate which offers a rebate of 1.50% to 3% if the Sum Assured is Rs.2 lakhs and above. The second rebate offered is for paying the premium in annual or half-yearly mode. For annual mode the rebate is 2% of the tabular premium while for half-yearly mode the rebate is 1%. 

Does the plan provide a loan facility? 
Yes, policyholders can avail of a loan under the plan if they have paid at least the first 3 years’ premiums and the plan has acquired a Surrender Value. 
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