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LIC Jeevan Labh Plan

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LIC Jeevan Labh Plan - Table No. 836

LIC Jeevan Labh is a simple endowment plan. You pay premiums for a limited period of time and at the end of the policy term, you will get the Maturity Benefits. In case of death of the policyholder anytime during the policy term, the nominee will get the Death Benefit.
LIC Jeevan Labh Policy is a traditional, non-linked, with-profits plan offering investment and insurance benefits. It is a limited premium payment plan - you don’t have to pay the premiums for the entire duration of the term of the policy. We will explain the plan benefits with the help of an example.
 
Launch Date 22 Dec 2015
Plan Details Table No. 836
Policy Type Traditional Endowment Plan





 

How does LIC Jeevan Labh Policy work?

When buying the LIC Jeevan Labh Plan, the customer has to decide on the following:
  1. Sum Assured (this is the amount of cover that you want)
  2. Policy Term (this is the period for which you wish to have the cover). The premium payment term gets decided automatically based on the policy term as follows:
  • If you select a policy term of 16 years, you have to pay premiums for 10 years
  • If you select a policy term of 21 years, you have to pay premiums for 15 years
  • If you select a policy term of 25 years, you have to pay premiums for 16 years

Based on the above 2 factors and the age at which you are taking the policy, your annual premium will be decided. 
Since it is a Participating plan, you will be eligible for the following at various points through the policy term. These are not guaranteed and you will only know the values as and when they are declared by LIC.
  • Simple Reversionary Bonus
  • Final Addition Bonus
 

Benefits in the LIC Jeevan Labh Plan

  • Death Benefit in LIC Jeevan Labh Plan: In case of death of the policyholder at anytime during the policy term, the nominee will receive the sum of the following:
    • Sum Assured
    • Simple Reversionary Bonus which has been declared will date
    • Final Addition Bonus if declared in that year
  • Maturity Benefit in LIC Jeevan Labh Plan: At the time of maturity of the plan, that is when the policy term gets over, the policyholder will receive the sum of the following:
    • Sum Assured
    • Simple Reversionary Bonus which has been declared at the end of every year
    • Final Addition Bonus if declared in that year

COMPARE THIS PLAN WITH OTHER ENDOWMENT PLANS

 

Let us understand the LIC Jeevan Plan better with the help of an example

We have Sumit Roy,, age 35 who wishes to buy this plan. He goes in for the plan with the following:

Sum Assured - Rs. 2,00,000
Term - 25 years. Based on this the premium payment term gets decided
Premium Payment Term - 16 years

Based on these parameters, his annual premium is Rs. 9,290 + Taxes = Rs. 9,708. Here we have assumed the current tax rate of 4.5%


Death Benefit

Scenario 1
If Arvind dies after 3 policy years - The nominee would get the Sum Assured + Simple Reversionary Bonus + Final Addition Bonus

Total Premiums Paid = Rs 29,124

Sum Assured = Rs. 2,00,000

Simple Reversionary Bonus = Rs. 40 per 1,000 Sum Assured for 3 years i.e. (Rs. 40 x 200 x 3) = Rs. 24,000. Here we have assumed that every year a bonus of Rs. 40 per 1,000 Sum Assured is being declared every year. This is just an assumption and it may be higher or lower than this. 

Final Addition Bonus - Nil. Usually Final addition bonus is declared after a much longer premium payment term.

So nominee will get Rs. 2,00,000 + Rs. 24,000 = Rs. 2,24,000 


Scenario 2 : If Sumit dies after 15 policy years - The nominee would get the Sum Assured + Simple Reversionary Bonus + Final Addition Bonus

Total Premiums Paid = Rs 1,45,620

Sum Assured = Rs. 2,00,000

Simple Reversionary Bonus = Rs. 40 per 1,000 Sum Assured for 15 years i.e. (Rs. 40 x 200 x 15) = Rs. 1,20,000. Here we have assumed that every year a bonus of Rs. 40 per 1,000 Sum Assured is being declared every year. This is just an assumption and it may be higher or lower than this. 

Final Addition Bonus - Rs. 20 per 1,000 Sum Assured i.e. (Rs. 20 x 200) = Rs. 4,000. Here we have assumed a one time Final Addition Bonus of Rs. 20 per 1,000 Sum Assured. This is just an assumption and it may be higher or lower than this.

So his nominee will get Rs. 2,00,000 + Rs. 1,20,000 + Rs. 4,000 = Rs. 3,24,000



Maturity Benefit 

Scenario 3 : If Sumit survives till the end of the policy term of 25 years - Arvind will get the  Sum Assured + Simple Reversionary Bonus + Final Addition Bonus

Total Premiums Paid = Rs. 1,55,328

Sum Assured = Rs. 2,00,000

Simple Reversionary Bonus = Rs. 40 per 1,000 Sum Assured for 15 years i.e. (Rs. 40 x 200 x 25) = Rs. 2,00,000. Here we have assumed that every year a bonus of Rs. 40 per 1,000 Sum Assured is being declared every year. This is just an assumption and it may be higher or lower than this. 

Final Addition Bonus - Rs. 20 per 1,000 Sum Assured i.e. (Rs. 20 x 200) = Rs. 4,000. Here we have assumed a one time Final Addition Bonus of Rs. 20 per 1,000 Sum Assured. This is just an assumption and it may be higher or lower than this.

So Sumit will get Rs. 2,00,000 + Rs. 2,00,000 + Rs. 4,000 = Rs. 4,04,000


Check the Bonus Rate of LIC Jeevan Labh Plan
 

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Sample Premium Illustration of LIC Jeevan Labh Policy

Here are the sample tabular premium rates (inclusive of taxes) payable by a healthy, non-tobacco user male for different combinations of age, Sum Assured and policy term. We have gone with the current applicable tax rate of 4.5% for such policies.

Sum Assured: Rs. 2,00,000
Policy Term: 16,21,25 (Years)
Premium Paying Term : 10,15,16 (Years)
Age: 20,30,40 (Years)

Eligibility Criteria for buying LIC New Jeevan Nidhi Plan

  Minimum Maximum
Sum Assured Rs. 2,00,000 No Limit
Policy Term(in years) 16,21,25
Premium Paying Term(in years) 10 for 16 years of policy term
15 for 21 years of policy term
16 for 25 years of policy term
Age at Entry 8 years (completed) 59 years for policy term 16 years
54 years for policy term 21 years
50 years for policy term 25 years
Maximum Maturity Age 75 years
Premium Paying Frequency Annually, Half-yearly, Quarterly, Monthly
 

Tax Implications in LIC New Jeevan Nidhi Plan

  • Premiums – The premiums paid for the plan are exempt from taxation under Section 80C of the Income Tax Act. 
  • Maturity Claim – Maturity amount is exempted from tax under Sec 10(10D) of the Income Tax Act  
  • Death Claim – Death claims received under the plan are free from taxation under Section 10(10D) of the Income Tax Act
 

Other Benefits in the LIC Jeevan Labh Policy

  • 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.
  • Grace Period - In case of Yearly, Half-yearly and Quarterly premium payment mode you have a grace period of 30 days from the premium due date. In case of monthly premium payment mode, the grace period is of 15 days. 
  • Loan - You can avail a long against this policy after you have paid 3 years of premium.
  • Riders  - You have the choice of taking the following riders by paying an extra premium amount:
    • LIC's Accidental Death and Disability Benefit Rider 
    • LIC's New Term Assurance Rider
  • Surrender Value - If you surrender the plan anytime before paying 3 years of premiums, you will not be paid anything back. In case you have paid at least 3 years premiums, the policy will acquire a Surrender Value. The bonus which you get in the policy also has a surrender value. Click here to understand the Surrender Value Calculations in the LIC Jeevan Labh Plan.

If you have any questions on the LIC Jeevan Labh Policy, drop in a line in the comments and we will be happy to help out.


 
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