LIC launches Jeevan Umang Insurance Plan – Should you invest?
LIC has launched its new plan Jeevan Umang insurance plan on 16th May, 2017. LIC Jeevan Umang is another whole life insurance plan (Table no.845). This new plan from LIC is a non-linked with profits plan. It indicates 8% guaranteed payment every year after completion of premium payment term, however the risk coverage would continue for the wholfe life of life insured. What are the features of LIC Jeevan Umang Insurance plan? What are the benefits of LIC’s Jeevan Umang Plan? What are additional riders available in this Insurance plan? Should you consider such whole Life Insurance Plans?
Features of LIC Jeevan Umang Insurance Plan
This life insurance plan is launched yesterday i.e. 16th May, 2017
- It is non-linked with profits plan.
- It is whole life plan. Means, even after premium payment term is completed, life insured is protected with life insurance for the entire life till maturity.
- Premium Policy Term (PPT) is available for 15, 20, 25 and 30 years tenure.
- Min age of entry is 90 days and maximum age of entry is 55 years. However, it depends on policy tenure option.
- a) Maximum age of entry is 55 years for 15 years premium payment term.
- b) Maximum age of entry is 50 years for 20 years premium payment term.
- c) Maximum age of entry is 45 years for 25 years premium payment term.
- d) Maximum age of entry is 40 years for 30 years premium payment term.
- Minimum basic sum assured is Rs 2 Lakh.
- Maximum basic sum assured – No upper limit
- Maximum age of policy maturity is 100 years.
- Loan facility upto 90% of surrender value is available in this plan after completion of 3 full years of premiums.
- There are Riders available (optional) in this plan.
- Policy Unique Identification Number is 512N312V01 and Plan Table no. is 845.
- This plan is replica of LIC Jeevan Tarang which LIC closed earlier. Even such plan was providing survival benefit after premium payment term and continues till the maturity i.e. whole life of life insured.
What is Date of Commencement of Risk under this plan?
All benefits are dependent on comment of risk. Hence it is important to understand this.
If Life insured is 8 years and above, commencement of risk is immediate. However if life insured is < 8 years, commencement of risk attains once the life insured is 8 years or once the policy completes 2 years of time frame. E.g. 1) if life insured is 5 years age, then commencement of risk is at the age of 7 years of the life insured (2 years completed). 2) Another example is if life insured is 7 years of age, his commencement of risk is within 8 years (since they attained 8 years of age)
What are the Benefits available in this LIC Jeevan Umang Insurance Plan?
1) Death Benefit
In case of death of policy holder, the death benefit is paid based on date of commencement of risk.
Death happens before commencement of risk: All premiums paid without any interest would be paid.
Death happens after commencement of risk: Sum Assured on Death + Vested Simple Reversionary Bonus + Final Additional Bonus (if any) would be payable to nominee. However such Sum Assured on Death would be highest of the following:
a) 10 Times of annualised premiums
b) Sum assured on Maturity
c) Basic Sum Assured
2) Survival Benefits
If life insured survives after the premium payment term, Guaranteed Survival Benefit of 8% of Sum Assured is payable every year till the maturity or death of life insured whichever is earlier. First Survival Benefit is paid at the end of the premium payment term and subsequently every year. E.g. if the Sum Assured is Rs 10 Lakhs then 8% i.e. Rs 80,000 is paid every year after premium payment term till maturity.
3) Maturity Benefit
If the life insured survives till the end of the policy term, Sum Assured on Maturity + Vested simple reversionary bonus + Final Additional Bonus (if any) is payable to the policy holder.
Let me explain Jeevan Umant Plan with a few illustrations
Mr.Ramesh aged 30 years, taken 15 years premium payment plan for Rs 2 Lakhs. The premium payable is Rs 16,433 per annum.
a) If Mr.Ramesh unfortunately dies before 45 years of age (before premium payment term, his family would get Rs 2 Lakhs + Vested Bonus + Final Additional Bonus (if any).
b) If Mr.Ramesh Survives after 45 years of age (after premium payment term. He would get Rs 8% of Sum Assured every year i.e. Rs 2 Lakhs x 8% = Rs 16,000 per year till the maturity as survival benefit. He would get Rs 2 Lakhs + Vested bonus + final additional bonus on maturity.
c) If Mr.Ramesh Survives after 45 years of age (after premium payment term. He would get Rs 8% of Sum Assured every year i.e. Rs 2 Lakhs x 8% = Rs 16,000 per year till the maturity as survival benefit. Assume that he dies after premium payment term after taking few years of survival benefits. His family would get Rs 2 Lakhs as death benefit along with vested bonus + final additional bonus (if any).
What are the various Riders available in this plan?
Following optional riders are available in this plan
a) LIC Accident Death and Disability Benefit Rider
b) LIC Accident Benefit Rider
c) LIC New Term Assurance Rider
d) LIC New Critical Illness Benefit Rider
One should note that these riders come with additional premiums.
Can we surrender this LIC Jeevan Umang Insurance Plan?
In case you are not happy with this LIC Plan, you can surrender this policy after 3 full year premiums are paid. If you found this policy not suitable immediately after you have taken the policy, you can surrender within 15 days of free look up period.
What are the rebates available in Jeevan Umang of LIC?
There are two rebates available, Premium payment mode rebate and High Basic Sum Assured Rebate.
a) Premium Payment Mode Rebate
b) High Basic Sum Assured Rebate
What is the Premium Chart look like fore LIC Jeevan Uman?
You can download premium chart in PDF version at this link.
Should you invest in LIC Jeevan Umang?
Like I indicated earlier LIC is a trusted brand, however its insurance plans give low returns. A 30 year old would pay Rs 16K premium for 15 year policy and at 45 years of age, he would get same Rs 16K back per annum for life till maturity along with risk coverage. Do you want to consider such plans? Plans from LIC would give approx returns of 4% to 6% per annum along with risk coverage. You should take term insurance plan and balance savings can be invested in a bank FD or mutual fund which would yield better returns. On other hand, if you are low risk taker and do not willing to take risk from stock markets, it is safe to invest in such LIC Plans.
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LIC launches Jeevan Umang Insurance Plan – Should you invest