LIC 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
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.
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
151,000 to Rs 399,000 3.5%
Rs 400,000+ 4.5%
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.
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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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LIC Jeevan Sugam Insurance Plan
I have taken 1 Jeevan sugam plan 813 on 2013, as my age at that time was 23 years. How much I will received after completing of 10 years plan. According to plan I have taken plan
of ₹ 41820. So after completion of plan, how much return I wll get.
This is samarendra, i am 34 yr old.
i have already 2 polices, one from LIC ie, 30k per annum and another is from MAX, 30k per annum.
i am looking for another policy, i can invest 40k-50k per annum. but return should be high.
i have gone through few comments, as per your guideline if its insurance policy then return will be less
i want more maturity value, not looking for any insurance
please suggest me which policy will be good.
Looking forward your reply
first of all many thanks for this valuable website which I have found accidently. I am 29 yeasrs old & just joined my new job with a salary with pay scale 7640-440(1)-8080-480(2)-9040-540(5)-11740-625(2)-12990-760(3)-15270-790(2)-16850-840(5)-21050. As I am totally new to the government service ( I have worked in private sector earlier having fixed monthly pay ) , I find it difficult to understand the pay scale . Could you please explain it to me ?? Also, based on this pay scale , could you please help me to decide to choose some investmnet plan ? I am 29 years old, planning to married at 31 . My aim is to back up for any type of emergency, childrens education , health ( but me & my family will get health insurance from the employer, ).Could you please help me to decide my future financial planning ?? Thanks in advance .
Rakesh, I am working in private sector and hence this scale, I would not be able to help you in making you understand. Good that you are planning your financial sbefore marriage. If you are looking for marraige expenses, my suggestion is to invest in bank RD every month as it would be for short term of 2 years. For long term, you should invest in mutual funds through SIP (Rs 1,000 per mutual fund scheme). You can choose like ICICI Pru blue chip fund or UTI Opps fund or Reliance equity opps fund etc.
i am 25 year old i am looking for some investment for 15-20 years.I am looking for invest 2000.00Rs in mutual fund and 1000.00 Rs in some lic policy .can u guide me to choose the best option available in the market.
Thanks and Regards
Hi Nitin, Invest in largecap or diversified funds like ICICI Pru focussed blue chip fund,BNPP Equity fund, UTI India life style fund or UTI Opps fund or Quantum long term equity fund and Birla SL Gen Next. You can pick any of these funds. Regd LIC, you should be clear whether you want to take for insurance protection or for investment. Consider taking LIC term policy if you are looking for protection. For investment look for Recurring deposit or mutual funds as they would provide more returns in long run
i am 49years old working ,i would like to invest single premium for 8 to 10 years,please let me know if any good policy.
Dilip, There are several policies like LIC Jeevan Bachat etc., Majority of them gives 4% to 5% annualised returns.