LIC Jeevan Shagun – Should you buy this new plan?

LIC Jeevan Shagun Single Premium insurance planLIC Jeevan Shagun – Should you buy this new plan?


Jeevan Shagun refers to Life’s good and auspicious day. On 58th anniversary, LIC has launched new plan, LIC Jeevan Shagun Table no. 826. LIC Jeevan Shagun is non linked, single premium, money back insurance plan with profits. This single premium insurance plan is available only for a 90 day period starting from 1st September, 2014. This new plan is making buzz in the market now and I thought I should write LIC Jeevan Shagun review about it. What are the features of LIC Jeevan Shagun insurance plan? Should you consider this LIC Jeevan Shagun money back plan?

Features of LIC Jeevan Shagun Money back plan


This week, LIC has launched its new plan Jeevan Shagun which is basically to attract individuals who want to consider savings cum insurance protection. Below are its features

  • Minimum age of entry: 8 years
  • Maximum age of entry: 45 years
  • Tenure of policy: 12 years
  • Single premium policy
  • Flexible policy offering multiple benefits
  • Sum Assured: 10 times of tabular single premium
  • Minimum Sum Assured: Rs 60,000
  • Maximum sum assured: No limit
  • Insurance plan available between 1st September, 2014 to 30th November, 2014 (90 days) only. Short period product, but is more attractive
  • Percentage of sum assured is paid at the end of the duration at maturity.
  • Liquidity through loan facility

Also Read: Should you buy SBI Smart Shield Term insurance plan?

What are the benefits available in LIC Jeevan Shagun money back plan?


a) Death Benefit


  • Within 5 years from the date of policy: Basic sum assured i.e. 10 times the tabular single premiums shall be payable
  • Beyond 5 years from the date of policy: Basic sum assured i.e. 10 times of tabular single premium  along with loyalty additions (if any) would be payable.

b) Survival Benefit:


On survival of life insured, the following benefits would be paid:

  • At the end of the 10th policy year, 15% of maturity sum assured.
  • At the end of the 11th policy year, 20% of maturity sum assured.
  • At the time of maturity / end of the 12th policy year, 65% of maturity sum assured.

What is the surrender value of this Jeevan Shagun Policy?


If you are not happy with the policy during the tenure of the plan, you can surrender this insurance plan and below would be paid:

  • Less than 1 year from the date of policy, 75% of single insurance premium paid.
  • More than 1 year from the date of policy, 90% of single insurance premium paid excluding survival benefits and taxes (if any).

Can we get loan on this LIC Jeevan Shagun insurance plan?

Yes, you can get loan on this insurance plan as follows:

  • 2nd to 3rd year of policy – 50% of surrender value
  • 4th to 6th year of policy – 60% of surrender value
  • 7th to 9th year of policy – 70% of surrender value
  • 10th to 12th year of policy – 90% of surrender value

How the premiums are calculated?


Premium for every Rs 1,000 sum assured would be Rs 508 for 20 years age individual, Rs 521 for 30 years individual and Rs 595 for 40 years individual.

Also Read: Why should you consider settlement ratios before you buy insurance policies?

Jeevan Shagun explained with sample example

If a 30 years age individual would take Rs 60,000 maturity sum assured, he need to pay Rs 31,275 (60,000 / 1,000 x 521) single premium for this 12 year policy. He would get following amounts on death and on maturity.

LIC Jeevan Shagun illustration

Download complete details from LIC website here

Should you opt for LIC Jeevan Shagun single premium policy?


This is a single premium policy which can be used for savings cum protection purpose. However, one has to compromise on the returns. Generally LIC policies would provide returns between 5% to 7%, depending on the schemes and loyalty additions etc. apart from risk coverage. Low risk appetite investors who want to stay away from financial markets (stocks, mutual funds, etc.) can opt for such policies. Alternatively like I always say, one can consider term insurance plans for risk coverage purpose and balance, invest in bank FD schemes which can provide better returns.

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Suresh
LIC Jeevan Shagun Money back plan

The Author

Suresh KP

Suresh KP i.e. me have written 1,800+ articles on this blog. I love doing analysis on various Best Investment Plans like mutual funds, Stocks, IPO's, NCD Bonds, Insurance products. If you like our blog, you can share some of the good articles on your Facebook or Twitter. This would be the BIGGEST gift which you would be giving to us.

63 Comments

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  1. sir, pls give me advise
    i hv invested through sip as below
    axis equity (G)– —————- 1000/month
    birla sunlife tax relief 96———- 1000/month
    icici pru tax (G) ———- 1000/month
    reliance vision (G) 1000/MONTH
    RELIANCE DIVERSIFY POWER (G) 1000/MONTH

    PLS GIVE ME ADVISE IS IT OK OR NOT???
    ALSO GIVE ME NAME OF OTHER GOOD FUNDS THROUGH SIP FOR INVEST…. I M 33 YRS OLD.

  2. Hi… Suresh sir. I have following 2 question. 1) I want to invest in diversified mf for 8 to 10year. Which is best diversified mf to invest through sip. 2) Gold prize are falling at present. Is it right time for new investor to invest in gold mf throug sip? And which is best gold mf? I want to invest for 8 to 10year. I can take medium risk.

    1. You can invest in reliance equity opps fund, UTI MNC Fund. etc.You can invest in gold ETF’s or gold mutual funds.

  3. Sorry for the Mistake in the returns i calculated. It is not 78000, it is approx 85000.

  4. Hi Suresh,

    Thank you for such a wonderful analysis and a clear calculation sheet. As we can see on the returns, it is no where near to the 50% of what we get on FDs. So, i hope everyone should be little more cautious in purchasing such plans. I am not sure why, the Insurance Products are having very less returns similar to it. Even a Tax Saver FD could get us more returns comparitively.

    The only advantage they are showing to us is the Life Cover, which brings is taking 90% of our revenue growth to them.

    With an average 8.5% returns on FDs, the money would have been grown to 78000 within 12 years.

    I hope everyone should now have the tendancy of calculating the average return in FDs before investing in such Policies. I thank you personally, to bring this tendancy within me.

    Regards,

    Vignesh. S

    1. I think we should always consider the tax implication while comparing the investment and returns based on your personal tax-bracket during both these instances.

      If you had invested say 30000/- in this year and you we were in in 30% tax bracket, you could have effectively invested only 70% of your earnings [thats around 23000/- …if you had invested in some other non-tax deductible options you would have give 7000/- to the taxman]
      Also on maturity if your FD is taxable, your earnings [78000-31000=47000] would have been taxed, with 30% bracket it could be around 14000/- diluting your earning. So effective money in your hand would have been 64000/- only.
      If you consider original tax saving while investing and tax saving at the maturity investing here could give better returns as compared to regular FDs. I see effective return 9.5% in this case.
      And on top of it we have added benefit of Risk-Cover of around 3 Lacs for these 12 years.

      These calculations may not hold good if your tax-saving limit is already exhausted OR investment amount is much larger which can not utilize the 80cc/c limits.

      So I think all computation should be based on our own financial scenario[tax-bracket, your tax-saving options, budget, risk-coverage and return goals and its weightage, risk-appetite and also your financial scenario changes year-on-year, need to be evaluated every year for whats beneficial checking different options in the market.

  5. Hi Suresh,

    Is the final return taxable ?

    1. Insurance proceeds at maturity are always tax-free

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