LIC Jeevan Sugam Insurance Plan – Review

LIC Jeevan Sugam insurance plan-ReviewLIC Jeevan Sugam Insurance Plan – Review

Last week India’s largest insurance company, LIC has launched a single premium insurance plan, Jeevan Sugam Insurance Plan. In this article, we would discuss about the key features of this LIC Jeevan Sugam insurance plan, Benefits, risks and to whom this insurance plan is best suitable for.

LIC Jeevan Sugam Insurance Plan

LIC Jeevan Sugam is a non linked single premium insurance plan. This insurance plan is close ended and is available for a limited time only.

Key features of LIC Jeevan Sugam insurance plan

Jeevan Sugam insurance plan is a single premium insurance plan where the risk cover is there up to 10 times the single premium paid. Maturity amount equals to maturity sum assured along with loyalty additions (if any).

Also read: Top Health insurance plans in India for Parents / Seniors

Eligibility, terms and conditions:

  • Minimum age entry: 8 years
  • Maximum age entry: 45 years
  • Death sum assured: 10 x single premium (< 5 years from policy date) and 10 x single premium + loyalty additions (if any) after 5 years from policy date
  • Minimum maturity sum assured: Rs 60,000
  • Maximum maturity sum assured: No limit
  • Policy term: 10 years
  • Premium: Single premium

Benefits of LIC Jeevan Sugam Insurance Plan

Death Benefits:

On death within 5 years from the date of commencement of policy: Sum assured i.e. 10 times the single premium (net of service tax) excluding any extra premium charged would be payable

On death after 5 years from the date of commencement of policy: Sum assured i.e. 10 times the single premium (net of service tax) excluding any extra premium charged + loyalty additions (if any) would be payable

Maturity Benefit: Maturity sum assured along with loyalty additions (if any) would be payable on maturity of 10 years.

Loyalty additions would be purely based on LIC’s claim experience.

Income tax benefit: Life Insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable income each year under section 80C of income tax act and the maturity amounts are tax free under section 10(10) D subject to fulfillment of terms and conditions.

Additional incentives:

Yes, the incentive amounts would be paid if the maturity amount exceeds Rs 150,000. The incentive is computed on maturity amount. If the maturity sum assured chosen is Rs 4 lakhs, then the incentive would be 4.5% on Rs 4 Lakhs = Rs 18,000. The total maturity amount would be Rs 418,000 + loyalty additions (if any).

Maturity amount               Incentive

150,000                             Nil

151,000 to Rs 399,000         3.5%

Rs 400,000+                       4.5%

Loan Facility:

Loan facility is available in this insurance plan up to 42% of the Surrender Value in the 1st policy year and up to 60% of the Surrender Value from the 2nd policy year onwards as on the date of sanction of loan. Surrender Value for 1st year is 70% of single premium paid and thereafter it is 90% of single premium.

You may also like this article: How to choose best term insurance plan

Premium computations:

Premiums would be computed based on the sum assured + age of the insurer.

Final thoughts, should we buy this LIC Jeevan Sugam policy?

Assuming that a youngster of 30 years has taken this policy for a maturity amount of Rs 100,000, then the amount of single premium would be Rs 56,200. If we compute the IRR (Investment rate of return) keeping away the loyalty additions, then it works out to be Rs 5.92%. Similar way, if we compute for 40 years insured person, for Rs 100,000 maturity amount the single premium works out to be Rs 62,935 and IRR comes to 5.28%.

This policy would be best suitable for youngsters who want insurance risk coverage + income tax benefit. If you are already invested in other insurance policies and you have sufficient investments to cover section 80C exemptions, this plan may not benefit you. If you are looking purely from investment perspective, there are better investment options like PPF, NSC etc., which gives higher returns than the returns provided by LIC Jeevan Sugam.

Readers, I invite your valuable suggestions and feedback on this article.

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Suresh
LIC Jeevan Sugam Insurance Plan

Suresh KP

43 comments

  • satish datey

    sir

    presently i have 4 policies  i am 37years ,married have a 8 year old son. My yearly income is Rs.1300000.

    kotkak -smart advantage for 20 years started on2009 sum insured is 1500000.

    kotak money back for 20 years started on 2010 sum insured is Rs 200000

    Lic bima gold sum insured is 270000 ,will mature on feb 2037

    and Lic jivan saral  sum insured is Rs 300000 ,will mature on oct. 2045

    sir kindly guide me ,do i need to buy more insurance ? hows jivan sugam policy for me? i can invest upto 70000/- as a single premium . should i continue with above policies?

    kindly reply

    satish datey

     

    • Satish, all insurance policies would have positves and drawbacks. Since you have invested in money back policies they provide returns ranging between 5% to 6.5% p.a. Instead of buying more money back policies, check whether you have sufficient insurance and consider taking term insurance policies which comes wit high risk coverage but low insurance premium. Balance you can invest in high return investment options like mutual funds or bank fixed deposits or others

  • satish datey

    sir,

    i want to invest Rs. 10000 p.m indifferent SIPs .pl.guide me which are the best players and for what duration should i invest. Actually i want To sum up amount for my childs future study > he is 8 years old.i have 2 running sips from birla sunlife frontline_growth worth rs.1000 each.

    regards

    satish

     

  • arjun

    Suresh

    An insurance officer came and told me that one policy of mine LIC Jeevan Shree paid by my dad for around 58 grand is lying idle as he didnt continue paying premiums regurarly…i thanked him for that…he wants me to invest in a new policy and i feel obliged as i had thought that the money was lost till he came on his own….For invst on the 1st of April i invest 1 lakh in PPF and 31K in NPS …so tax beenfits are useless for me…i have no debt also…any lic policy with good returns comparable to FD so i can clear the obligation…on the net i didn't find a single policy comparable

    • Arjun, I could see the frustration in your mail. I look only from one angle. Insurance policies are meant for risk coverage and not for providing returns on your investment. All insurance policies provide returns of 4% to 6% per annum as their objective is not for providing returns.  How one can compare a FD with insurance policy where former objective is only returns and later objective is risk coverage + returns. My suggestion to you Arjun, if you think you want good returns on your yearly investment, consider taking term policy where you need to pay small amount for high risk coverage and invest balance in equity linked saving schemes (ELSS) and public provident fund. This way all your objectives are met.

  • Devendra Singh

    sir i want invest for my deaughter she is 1.3years  please saugest me for hi return when she is after 18 years  

    • Devendra, Invest in large cap and diverisfiied mutual funds. These are good for long term and you would get high returns if you invest for 10-15 years.

  • Mahendra kumar agrahari

    sir, my son is 06 month old, i want to invest some amount for his future/education.my income is 30 thousand per month. I m putting 10 thousand in pf.
    Please guide me.

    • Mahendrakumar, Apart from PF, what other investment you have done?  Depending upon your risk capacity, you can invest variety of investment options like stocks, mutual funds, bank FD’s. If you are looking for mutual funds, please invest in largecap and diversified mutual funds like ICICI Prufocussed blue chip, UTI Opps fund  and Reliance equity oppos funds.

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