LIC Jeevan Utsav (Plan No. 871) is on the market 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 know 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 rather a lot. 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), workers need to submit funding proof to their employers to keep away from the tax deduction. Therefore, workers who’re unplanned about tax saving from the start will clearly be in a determined mode on the lookout for sure choices to speculate and save.
To focus on such people, in the event you observed the historical past of LIC, they launch new merchandise within the month of November finish or to start with of December.
Therefore, don’t rush to speculate on this product with the only real intention of saving the tax and it is a new product. As a substitute, 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.
Further riders out there on this plan are – Unintended Loss of life and Incapacity Profit Rider, Accident Profit Rider, New Time period Assurance Rider, New Vital Sickness Profit Rider, and Premium Waiver Profit Rider.
The modes of premium cost allowable are Yearly, Half Yearly, Quarterly, and Month-to-month (by means of NACH solely) or by means of wage deductions (SSS).
LIC Jeevan Utsav (Plan No. 871) – Advantages
The advantages are LIC Jeevan Utsav (Plan No. 871) will 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, supplied the coverage is in pressure.
GUARANTEED ADDITION – Assured Additions will accrue on the price of Rs.40 per R.1,000 Primary Sum Assured on the finish of every coverage yr throughout the Premium Paying Time period. There shall 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 every year GA accumulation shall be 20,000. Allow us to say the policyholder dies after 3 years from the date of graduation of coverage (danger), then LIC can pay 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 can pay Rs.5,00,000 (Sum Assured) + Rs.1,60,000 GA (Rs.20,000 per yr GA *8) = Rs.6,60,000.
Observe that although the policyholder survived past the premium paying time period, the GA as talked about above, shall 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 further 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 greater than ‘Primary Sum Assured’ or ‘7 instances 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 below this plan will start 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 start instantly from the date of issuance of the coverage.
# LIC Jeevan Utsav (Plan No. 871) Survival Advantages
Right here, there are two choices supplied.
1) Common Earnings Profit – On survival of the policyholder, a Common Earnings Profit equal to 10% of the Primary Sum Assured shall be payable on the finish of every coverage yr ranging from the yr as specified under, supplied all due premiums have been paid.
For Premium Paying Phrases 5 Yrs to eight Yrs – Common Earnings 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 Earnings 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 Earnings Profit – On survival of the policyholder, a Flexi Earnings Profit equal to 10% of the Primary Sum Assured shall be payable on the finish of every coverage yr ranging from the yr as specified under, supplied all due premiums have been paid.
For Premium Paying Phrases 5 Yrs to eight Yrs – Common Earnings 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 Earnings 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.
Nevertheless, on this choice policyholder can defer and accumulate such yearly advantages. LIC can pay curiosity on the deferred and accrued Flexi Earnings 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 shall be ignored for the aim of calculation of curiosity.
You might be 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 isn’t a maturity profit below this plan.
The entire advantages of this plan will be defined within the under picture.
LIC Jeevan Utsav (Plan No. 871) – Must you 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 in the event you assume a 30-year policyholder lives as much as 100 years, the return on funding shall be lower than 6%. If the demise occurs earlier than that, then returns will additional cut back.
Therefore, although in no matter approach 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 entice. As a substitute, perceive absolutely the product characteristic.
Nevertheless, in the event you really feel LIC is the most effective (not the product) and the lower than 6% returns are BEST on your long-term funding, then you possibly can go forward and make investments.
