LIC Jeevan Sugam Insurance Plan – Review

LIC Jeevan Sugam insurance plan-ReviewLIC 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

Death Benefits:

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.

Additional incentives:

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

150,000                             Nil

151,000 to Rs 399,000         3.5%

Rs 400,000+                       4.5%

Loan Facility:

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.

You may also like this article: How to choose best term insurance plan

Premium computations:

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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Suresh
LIC Jeevan Sugam Insurance Plan

Suresh KP

43 comments

  1. Sir I am working in PSU

    I have an PPF account & investment good proportion of my salary in it

    i want to invest a money apart from ppf &NSC

    suggest me where i should invest in LIC or Infrastructure bonds

     

    1. Sachin, what is your investment objective ? LIC is not for investment. It is only for security. Infrastructure bonds are only for tax saving options. If you are looking for tax saving options, look for ELSS. If you are looking for investment, why don’t you try investing in mutual funds. They may carry moderate risk, but you would gain more in long term.

      1. Sir,

        Thanks for your suggestion, Suggest me in which mutual i should invest

        where risk is minimal, also sir, i am not familiar with mutual funds, kindly guide

        me. as for me, objective is to save tax &  get good return by investing in worthful

        sources.

         

    1. Hi Soman, All insurance policies would give returns ranging between 5% to 6.5%. Don’t look insurance policies as invesmtent options. You should look more from security point of view and see what all would be covered with less costs.

  2. Dear Mr. Suresh

    I need to invest 7Lac for my child education who is 8years old.

    Please advise 

    Thanks

    Srini

    1. Srini, you should be clear about whether you want to take. Is it insurance or investment for your child. I feel, you shud look for investment. If you are looking to invest for child education, you should invest in largecap and diversified mutual funds for 8 to 10 years. Please see our top-10 mutual funds article.

  3. What should be the minimum amt of premium in jeevan sugam? what is the last date of this policy?

    1. Pradnya, It would depend on premium rates indicated by age. e.g. 30 years age person, the premium rate is indicated as Rs 562.65 for every Rs 1,000 maturity. So if Rs 60,000 is minimum maturity policy to be taken, the premium would be Rs.562.65 x 60 = Rs 33,759. So a 30 year person need to take a minimum maturty policy of Rs 60,000 and pay a premium of Rs 33,759.

  4. nice information…

    pls let me know about LIC single premium insurance plan with high returns…

    1. Soman, I am planning to write an article on single premium insuance plans and comparison among them. You would see an article early next week.

      1. Lic’s eterm policy. Do they evaluate Sum Assured by referring my economical value. I’m salaried employee earning 10,000 P.M and planing to buy 1cr eterm plan with premium around 14,600 annually for 30 yrs.

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