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

  • preeti gupta

    I m 27 yrs old. I have rs10000 monthly for disposal for savings
    Curremtly i dont have any insurance policy or any otjer investment products. Please advise where should i put the money for secure futire and good return.

    • Preeti, If you do not have insurance, make this as your primary objective. Consider taking any term insurance policy like LIC Amulya Jeevan or ICICI Pru Term insurance or HDFC Click 2 protect. It may cost you less than Rs 4,000. Balance you can start investing in diversified mutual funds like Birla Sun Life Frontline or HDFC Top-200 or Franklin India blue chip fund etc.

    • Chirag

      Invest 1,00,000 in PPF annualy. That is the best investment in all terms. For insurance, take a term plan from LIC. 

  • Rajeev Kizhakke Valappil

    I pay Rs. 60000/- for this policy in march 2013, but I didnt get bond (Taliparamba Branch)

  • Suraj

    Hi,

    i have recetly done a big investment which is buying a house. I have done the half payment of the house and remain will be based on the construction of the house. I am 30 and working in Bangalore. I have not done any other investment. No PPF, PF, FD, withdrow all of Mutual funds for house 🙂

    I am planning to invest atlest 1lac now. Do you suggest me to invest in LIC / PPF or Market ?  If your answer is to first invest in LIC thn provide me few best options.

    Thanks

    • Suraj, What is the purpose of your investment? LIC is only for insurance. Some people even look for insurance cum investmetn products in LIC. I feel you would get very less returns of < 6%. Why do you want in such products. I would not suggest you to invest lumpsum in stock market. But you can invest systematicaly (SIP) in stock market or in Mutual funds. PPF look only for tax savings. LIC for insurance. For lumpsum you can invest in debt mutual funds where you would get 9% to 11% returns. 

  • lakshmana d c

    Hai

     i want 5 years planing for 5 lakhs pls tell  the deatails.

    • Lakshman, it would depend on various parameters. What is your risk appetite. If you are high risk, invest in sector based mutual funds. If you are moderate risk taker, invest in diversified mutual funds or large cap mutual funds. Low risk investors, invest in bank FD or debt mutual funds or balanced mutual funds or Post office MIS scheme.

  • Vaibhav

    i have just starter a job and my annual salary is 2.5 p.a..so please guide me where to invest a fix amount per month(around 5000)

    • Vaibhav, Start investing in debt and balanced mutual funds. Once you are familiar, you can invest in diversified mutual funds and other investment optoins

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