Life Insurance Corporation of India (LIC) has launched a New Whole-Life plan called as ‘LIC Jeevan Umang on 16th May, 2017. This new plan from LIC is a traditional, Non-linked, with-profits, Whole Life Assurance and Limited Premium Payment Option plan.
Main feature of LIC’s New plan – Jeevan Umang
It provides annual Survival Benefits from the end of the PPT (Premium Paying Term) till policy maturity and also pays lump sum amount at the time of maturity (or) on death of the policyholder (during the policy tenure).
In this post, let’s understand the key features & benefits of LIC Jeevan Umang Policy.
Key Features of LIC Jeevan Umang Whole Life Plan
Below are the main eligibility conditions to buy LIC’s new policy – Jeevan Umang;
- Minimum Age Entry: 90 days
- Maximum Age at Entry:
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- 55 years for 15years premium period
- 50 years for 20years premium period
- 45 years for 25years premium period
- 40 years for 30years premium period
- Minimum age at the end of PPT : 30 years
- Maximum age at the end of PPT : 70 years
- Age at Policy maturity: 100 years
- Policy Term (Tenure) : 100 – age at entry. (For example: If a 30 year old individual buys LIC Jeevan Umang policy then the policy term would 100 years minus 30 years = 70 years.)
- PPT (Premium Paying Term options): 15, 20, 25 & 30 years
- Minimum Basic Sum Assured: Rs 2 Lakh
- Maximum Basic Sum Assured: Not Applicable
- Optional available Additional Riders: Accident Death Benefit & Disability Rider, New Term Assurance Rider & New Critical Illness Benefit Rider.
- Loan facility upto 90% of surrender value is available in this plan after the completion of 3 full years of premium
- Policy Unique Identification number is 512N312V01 and the plan table no is 845.
Benefits of LIC Umang Plan
Death Benefits under Jeevan Umang Plan:
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- On death before the commencement of Risk: An amount equal to the total amount of premium/s paid without any interest shall be payable. (Life assured aged 8 or more, risk will commence immediately.)
- On death after the commencement of Risk: Death Benefit is defined as sum of ”Sum Assured on Death” and vested simple reversionary bonuses and Final Additional Bonus, if any shall be payable to the Nominee. Where ”Sum Assured on Death” is defined as the highest of;
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- 10 times of annualized premium (or)
- Sum assured on Maturity (or)
- Absolute amount assured to be paid on death that is Basic Sum Assured.
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- Survival Benefits:
- On the life assured surviving to the end of the premium paying term and all the premiums in policy have been paid, Guaranteed survival benefits at the rate of 8% of Sum Assured will be available annually after completion of the premium paying term till maturity or death whichever is earlier.
- First survival benefit shall be paid at the end of the premium paying term and thereafter on completion of each subsequent year till life assured survives or policy anniversary prior to the date of maturity, whichever is earlier.
- Maturity Benefits under Jeevan Umang Plan:
Maturity benefit = Basic Sum Assured + Simple Reversionary Bonuses + Final Additional Bonus (if any) shall be payable to policyholder on surviving to the end of the policy term.
Example
Mr.Ganesh aged 30 years, taken 15 years premium payable plan for Rs 2 lakhs. The premium payable is Rs16433 per annum.
- If Mr Ganesh unfortunately dies before the payment tenure of 15 years ie before the age of 45 years his family would get Rs 2 lakhs+ Bonus+ Additional bonus(if any)
- If Mr. Ganesh survives after 45 years of age he would get 8% of the sum assured every year i.e Rs 2 lakhs * 8% = Rs 16000 per year till the maturity as survival benefit. He would get Rs 2lakhs+ Bonus + Additional bonus(if any)
- If Mr. Ganesh survives after 45 years of age he would get 8% of the sum assured every year i.e Rs 2 lakhs * 8% = Rs 16000 per year but passes away before getting the maturity benefit his family can claim the death benefit of Rs 2lakhs + bonus +additional bonus (if any).
Should you invest in LIC Umang?
You need do to pay Rs 7,879 as premium for a Sum Assured of Rs 2 Lakh. If your priority is to get sufficient life cover at cheaper premium rates then you can buy a Term insurance plan. A 30 year policy holder (non-smoker) can buy an e-Term insurance policy from LIC itself with a life cover of Rs 50 Lakh by paying a premium of Rs 7,812 p.a. for 30 years. If you are looking for higher returns then this policy would not suit you much. The returns are primarily dependent on the quantum of bonuses declared by LIC. Also, note that these bonus amounts are not paid to you immediately. They are accrued and paid on maturity or claim. Compounding is not done. If your investment objective is better returns then there are plenty of other investment options available in the market.
