LIC Jeevan Shagun – Should you buy this new plan?

LIC Jeevan Shagun – Should you buy this new plan?

Jeevan Shagun refers to Life’s good and auspicious day. On 58^th 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 1^st 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 1^st September, 2014 to 30^th 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 10^th policy year, 15% of maturity sum assured.
• At the end of the 11^th policy year, 20% of maturity sum assured.
• At the time of maturity / end of the 12^th 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:

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

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

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Suresh KP

Founder at Myinvestmentideas.com

Suresh KP is the Founder of Myinvestmentideas. He is NISM Certified - Investment Adviser and NISM Certified - Research Analyst. He has been analyzing financial markets in the last 20 years.He can be reached at suresh@myinvestmentideas.com

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