LIC Jeevan Utkarsh Insurance Plan – Should you invest?
LIC has launched its new plan Jeevan Utkarsh insurance plan yesterday i.e. 6th September, 2017. LIC Jeevan Utkarsh is like an endowment life insurance plan (Table no.846). This new plan from LIC is a single premium, non-linked, with profits, Savings cum insurance plan. It comes with New Settlement Option which is one of its kind from LIC. What are the features of LIC Jeevan Utkarsh Insurance plan? What are the benefits of LIC’s Jeevan Utkarsh Plan? What are additional riders available in this Insurance plan? Are there any drawbacks in this LIC Jeevan Utkarsh Insurance Plan?
Features of LIC Jeevan Utkarsh Insurance Plan
This life insurance plan is launched yesterday i.e. 6th September, 2017.
This plan would be available for next 270 days from the date of the launch. Means this is close ended insurance plan.
It is non-linked, with profits, savings cum insurance plan.
This is single premium insurance plan. Means, you just need to pay once and don’t need to make payment every year.
Min age of entry is 6 years and maximum age of entry is 47 years.
Minimum basic sum assured is Rs 75,000.
Maximum basic sum assured – No upper limit
Tenure of the plan is 12 years only.
Loan facility available after 3 months from the date of the plan.
Accidental death benefit and disability benefit riders available in this plan.
This insurance plan Table no. is 846.
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 LIC Jeevan Utkarsh 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 or Death happens within 5 years from the date of policy: All premiums paid without any interest would be paid.
Death happens after commencement of risk or Death happens after 5 years from the policy date: Basic Sum Assured (BSA) + Loyalty Additions (if any) would be paid to Nominee. However such Basic Sum Assured on Death would be minimum of the following:
a) 10 Times of annualised premiums
b) Basic Sum assured
c) 125% of the premium paid
2) Survival or Maturity Benefits: If life insured survives after 12 years of the tenure of the plan, survivor would get Basic Sum Assured + Loyalty Additions (if any).
What are the various Riders available in Jeevan Utkarsh plan?
LIC’s Accidental Death and Disability Benefit Rider can be opted from the inception only.
Minimum Accident Benefit Sum Assured : Rs. 10,000/-
Maximum Accident Benefit Sum Assured: An amount equal to the Basic Sum Assured under the Base Plan subject to the maximum of Rs.100 lakhs overall limit taking all existing policies of the Life Assured under individual as well as group policies including policies with inbuilt accident benefit taken with Life Insurance Corporation of India and the Accident Benefit Sum Assured under the new proposal into consideration.
The Accident Benefit Sum Assured shall be in multiples of Rs 10,000 only.
One should note that these riders come with additional premiums.
Can we surrender this LIC Jeevan Utkarsh Insurance Plan?
In case you are not happy with this LIC Plan, you can surrender this policy anytime however there are terms and conditions.
1) You would get 70% of single premium paid if surrendered < 1 year
2) You would get 90% of single premium paid if surrendered > 1 year
3) You would get 90% of single premium paid + Loyalty Additions (if any) if surrendered > 5 year
What are the rebates available in Jeevan Utkarsh of LIC?
High Basic Sum Assured Rebate available in this plan.
1) Basic sum assured – Rs 75,000 to Rs 145,000 – Rebate is Rs Nil
2) Basic sum assured – Rs 150,000 to Rs 295,000 – Rebate is Rs 15 per Rs 1,000 basic sum assured
3) Basic sum assured – Rs 3 Lakhs to Rs 4.8 Lakhs – Rebate is Rs 20 per Rs 1,000 basic sum assured.
4) Basic sum assured > Rs 5 Lakhs – Rebate is Rs 25 per Rs 1,000 basic sum assured
What is the Premium Chart look like fore LIC Jeevan Utkarsh?
You can download premium chart in PDF version at this link which would be updated once available.
What is the New Settlement Option in LIC Jeevan Utkarsh?
LIC has introduced one unique feature with this plan now. New Settlement Option from LIC is where one can get the maturity or death benefit settlement in installments of predefined period of 5 years, 10 years and 15 years. This feature is available for life assured who is > 18 years of age and for full or partial amount of death or maturity amount. Minimum amount of installment one can get under this option is Rs 5,000 per month or Rs 15,000 per Qtr or Rs 25,000 for half yearly or Rs 50,000 yearly. However, this option needs to be opted at the beginning of the policy and cannot be changed lateron. LIC would decide on the interest to be paid on the death / maturity amount which would be paid under this option.
What are the Benefits of LIC Jeevan Utkarsh Insurance Plan?
Here are the benefits of this insurance plan.
1) It is Single Premium plan so no need to worry about yearly payment of insurance premiums
2) Sum Assured is 10 times of the premiums paid
3) New Settlement Option in this plan makes this plan as unique where one can get the death benefit or maturity benefit in installments instead of lumpsum amount
4) High sum assured rebate available.
What are the Major Drawbacks of LIC Jeevan Utkarsh Insurance Plan?
1) New Settlement Option is just introduced and there are several questions on this option. One does not know how much interest would be paid by LIC yet.
2) This plan comes with 12 years tenure. Insurance should be long term risk coverage and short term insurance is not worth it.
3) One can expect a return of 5% to 6% per annum from such LIC plans
Should you invest in LIC Jeevan Utkarsh?
Like I indicated earlier LIC is a trusted brand. However its insurance plans give low returns of 5% to 6% per annum. Tenure of this plan of 12 years is very low. Risk coverage would be after the commencement of risk. 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 Jeevan Utkarsh Insurance Plan – Should you invest