LIC Jeevan Utsav (Plan No. 871) is out there from twenty ninth Nov 2023. Few are misselling it as a ten% GUARANTEED return product. What’s 10% and what’s GUARANTEED right here?
Why is LIC launching this plan now?
Earlier than we transfer on to grasp the LIC Jeevan Utsav (Plan No.871) intimately, allow us to first perceive the explanations or logic behind the launching of this product within the month of November.
TAX SAVING, GUARANTEED, and SAFETY are the few phrases to which we Indians are interested in so much. To take advantage of such a mindset, the monetary world all the time performs sure video games.
As you all are conscious (particularly salaried class), staff need to submit funding proof to their employers to keep away from the tax deduction. Therefore, staff who’re unplanned about tax saving from the start will clearly be in a determined mode in search of sure choices to take a position and save.
To focus on such people, for those who observed the historical past of LIC, they launch new merchandise within the month of November finish or at first of December.
Therefore, don’t rush to take a position on this product with the only real intention of saving the tax and this can be a new product. As an alternative, attempt to perceive the options and eligibility, and if it fits your necessities then go forward.
LIC Jeevan Utsav (Plan No. 871) – Eligibility
LIC’s Jeevan Utsav is a Non-Linked, Non-Collaborating, Particular person, Financial savings, Complete Life Insurance coverage plan. It’s a Restricted Premium plan with Assured Additions all through Premium Paying Time period.
Under is the desk to clarify the LIC Jeevan Utsav (Plan No. 871) Eligibility.
Extra riders out there on this plan are – Unintended Loss of life and Incapacity Profit Rider, Accident Profit Rider, New Time period Assurance Rider, New Essential Sickness Profit Rider, and Premium Waiver Profit Rider.
The modes of premium fee allowable are Yearly, Half Yearly, Quarterly, and Month-to-month (by way of NACH solely) or by way of wage deductions (SSS).
LIC Jeevan Utsav (Plan No. 871) – Advantages
The advantages are LIC Jeevan Utsav (Plan No. 871) might be categorized as under.
# LIC Jeevan Utsav (Plan No. 871) Loss of life Advantages
On the demise of the policyholder and after the date of graduation of danger, Loss of life Profit equal to “Sum Assured on Loss of life” together with accrued Assured Additions shall be payable, offered the coverage is in drive.
GUARANTEED ADDITION – Assured Additions will accrue on the price of Rs.40 per R.1,000 Fundamental Sum Assured on the finish of every coverage yr through the Premium Paying Time period. There will likely be no additional accrual of Assured Additions after the Premium Paying Time period. This implies, that in case your premium paying time period is 8 years and assume that the sum assured is Rs.5,00,000, then annually GA accumulation will likely be 20,000. Allow us to say the policyholder dies after 3 years from the date of graduation of coverage (danger), then LIC pays Rs.5,00,000 (Sum Assured) + Rs.60,000 GA (Rs.20,000 per yr GA *3) = Rs.5,60,000.
Allow us to say the policyholder dies after 10 years from the date of graduation of coverage (danger), then LIC pays Rs.5,00,000 (Sum Assured) + Rs.1,60,000 GA (Rs.20,000 per yr GA *8) = Rs.6,60,000.
Notice that despite the fact that the policyholder survived past the premium paying time period, the GA as talked about above, will likely be calculated just for the premium paying phrases (Just for 8 years however not for 10 years).
Within the case of minors the place the graduation of danger has not began and demise occurred between the beginning of the coverage and earlier than the graduation of danger, then the nominee will obtain the premiums paid as of demise (excluding the tax, rider premiums, and additional premium).
This Loss of life Profit won’t be lower than 105% of whole premiums paid (excluding tax, additional premium, and rider premium) as much as the date of demise.
“Sum Assured on Loss of life” is outlined as increased than ‘Fundamental Sum Assured’ or ‘7 occasions of Annualized Premium (excluding tax, additional premium, and rider premium)’.
Graduation of RISK – In case the age at entry of the Life Assured is lower than 8 years, the danger beneath this plan will begin both 2 years from the date of graduation of coverage or from the coverage anniversary coinciding with or instantly following the attainment of 8 years of age, whichever is earlier. For these aged 8 years or extra, danger will begin instantly from the date of issuance of the coverage.
# LIC Jeevan Utsav (Plan No. 871) Survival Advantages
Right here, there are two choices offered.
1) Common Revenue Profit – On survival of the policyholder, a Common Revenue Profit equal to 10% of the Fundamental Sum Assured will likely be payable on the finish of every coverage yr ranging from the yr as specified under, offered all due premiums have been paid.
For Premium Paying Phrases 5 Yrs to eight Yrs – Common Revenue Profit begins from eleventh 12 months.
For Premium Paying Phrases 9 Yrs, 10 Yrs, 11 Yrs, 12 Yrs, 13 Yrs, 14 Yrs, 15 Yrs, and 16 Yrs – Common Revenue Profit begins from twelfth 12 months, thirteenth 12 months, 14th 12 months, fifteenth 12 months, sixteenth 12 months, seventeenth 12 months, 18th 12 months and 19 Years respectively.
2) Flexi Revenue Profit – On survival of the policyholder, a Flexi Revenue Profit equal to 10% of the Fundamental Sum Assured will likely be payable on the finish of every coverage yr ranging from the yr as specified under, offered all due premiums have been paid.
For Premium Paying Phrases 5 Yrs to eight Yrs – Common Revenue Profit begins from eleventh 12 months.
For Premium Paying Phrases 9 Yrs, 10 Yrs, 11 Yrs, 12 Yrs, 13 Yrs, 14 Yrs, 15 Yrs, and 16 Yrs – Common Revenue Profit begins from twelfth 12 months, thirteenth 12 months, 14th 12 months, fifteenth 12 months, sixteenth 12 months, seventeenth 12 months, 18th 12 months and 19 Years respectively.
Nonetheless, on this possibility policyholder can defer and accumulate such yearly advantages. LIC pays curiosity on the deferred and accrued Flexi Revenue Advantages on the price of 5.5% p.a. compounding yearly for accomplished months from its due date until the date of withdrawal, give up, or demise, whichever is earlier. The fraction of months will likely be ignored for the aim of calculation of curiosity.
You’re allowed to withdraw 75% of (Profit + Curiosity) such stability as soon as in a coverage yr. The remaining quantity will proceed to earn the 5.5% curiosity compounding yearly.
# LIC Jeevan Utsav (Plan No. 871) Maturity Advantages
As it’s a whole-life plan, there is no such thing as a maturity profit beneath this plan.
The entire advantages of this plan might be defined within the under picture.
LIC Jeevan Utsav (Plan No. 871) – Do you have to make investments?
Earlier than we choose based mostly on the options of this product, allow us to attempt to perceive the calculation with the under instance.
You observed that even for those who assume a 30-year policyholder lives as much as 100 years, the return on funding will likely be lower than 6%. If the demise occurs earlier than that, then returns will additional scale back.
Therefore, despite the fact that in no matter means you calculate, the returns are usually not greater than 6%. That is the everyday one-more LIC plan however with an eyewash of 10% profit returns and GUARANTEED ADDITION key phrases.
On this product, a ten% profit is 10% of the fundamental sum assured what you get all through your life. However not 10% RETURNS!! Additionally, GUARANTEED here’s a assured addition of Rs.40 per Rs.1,000 sum assured what you stand up to your premium paying time period (additionally they don’t add a single penny to this accrued GA). Due to these two elements, assuming this product as 10% GUARANTEED returns is a whole fable. Don’t be on this lure. As an alternative, perceive totally the product function.
Nonetheless, for those who really feel LIC is the perfect (not the product) and the lower than 6% returns are BEST to your long-term funding, then you’ll be able to go forward and make investments.