LIC Jeevan Labh Plan
LIC Jeevan Labh Plan – Table No. 836
LIC Jeevan Labh is a simple endowment plan. You pay premiums for a limited period and at the end of the policy term, you will get the Maturity Benefits. In case of the death of the policyholder at any time 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 |
Benefits
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
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
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.
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.
You can avail a long against this policy after you have paid 3 years of premium.
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
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.
How it works
When buying the LIC Jeevan Labh Plan, the customer has to decide on the following:
- Sum Assured (this is the amount of cover that you want)
- 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
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
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)
Tax Benefit
- 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
Eligibility
| 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 | |
