LIC Jeevan Umang – Whole Life Plan with Money back every year and Maturity Benefits – Should you opt?
LIC Jeevan Umang Insurance Plan Review
LIC Jeevan Umang is a whole life insurance plan. In this life insurance plan, one has to make premium payments for a specific period. They would get money back every year (after that), would receive the maturity amount after the policy tenure and the risk coverage would be there till 100 years of age. This is the only plan from LIC that is covered for whole life. Should you opt for LIC Jeevan Umang? What are the various benefits available in LIC Jeevan Umang Plan No 945? Are there any negative factors in this plan?
Also Read: Best LIC Term Insurance Plan for One Crore
What are Whole Life Plans?
Whole Life Plans are the Insurance plans that are bought for the length of your life. The policy stays in force throughout the life of the insured. In India, under the Whole Life plans, if the policyholder survives till the age of 100, then Matured Endowment Coverage is provided to the policyholder as maturity benefit. There is guaranteed death benefit to the beneficiary of the policy in the event of the unfortunate demise of the policyholder during the tenure of the policy. The initial cost of the policy is higher than the term insurance plans because of the length of the policy.
Features of LIC Jeevan Umang Policy No. 945
The distinctive features of the LIC Jeevan Umang Policy are:
LIC Jeevan Umang Policy is a non-linked, participating whole-life assurance plan that combines the benefit of income along with providing financial protection to the family.
This is whole life insurance plan i.e. it provides life coverage till 100 years of age.
Premium payment terms are 15, 20, 25 and 30 years of age.
After the end of the premium paying term, one can get 8% of the sum assured regular payouts every year.
Large sum assured of above Rs 25 Lakhs available with 2% discounted premiums.
The simple reversionary bonus is paid on maturity (on death if it is early).
Premiums can be paid regularly at yearly, half-yearly, quarterly, or monthly mode.
Loan facility available after the policy acquired a surrender value. This creates liquidity of the funds.
There are various riders available in the plan to make it more comprehensive.
One can opt to take the death benefits in installments instead of a lump sum.
The premiums paid are eligible under an income tax exemption u/s 80c.
Eligibility details of this Whole Life Plan
The following is the eligibility criteria of the Whole Life Plan:
|LIC Jeevan Umang – Eligibility|
|Minimum Basic Sum Assured||Rs. 2,00,000 (Should be in multiples of Rs. 25,000)|
|Maximum Basic Sum Assured||No limit|
|Policy Term||(100 – age at entry)|
|Premium Paying Term||15,20,25, or 30 years|
|Minimum age to attain the policy||90 days|
|Maximum Age to attain the policy||55 years|
|Minimum Age at the end of premium paying term||30 years|
|Maximum age at the end of premium paying term||70 years|
|Age at maturity||100 years|
What is the date of commencement of risk?
Before we get into more details, let us check when the risk commences.
1) In case the age at entry of the Life Assured is less than 8 years, the risk under this plan will commence either one day before the completion of 2 years from the date of commencement of policy or one day before the policy anniversary coinciding with or immediately following the completion of 8years of age, whichever is earlier.
2) For those aged 8 years or more, the risk will commence immediately from the date of issuance of the policy.
Benefits in LIC Jeevan Umang Policy
LIC Jeevan Umang Policy offers the following benefits provided that the policy is in force:
1) Death Benefit: On the death of the Life Assured during the policy term:
- On death before the commencement of Risk: Return of premium/s paid without interest shall be payable.
- On Death after the commencement of Risk: Death Benefit which is defined as the sum of “Sum Assured on Death” and vested Simple Reversionary Bonuses and final additional bonus (if any) shall be payable.
2) Survival Benefit: If the life assured survives through the premium paying term, a survival benefit equal to 8% of Basic Sum Assured shall be payable each year till the life assured survives or till the policy anniversary prior to the date of maturity, whichever is earlier.
3) Maturity Benefit: On the life assured surviving till the end of the policy term, Sum Assured on Maturity (“Sum Assured on Maturity” is equal to Basic Sum Assured) is payable along with vested Simple Reversionary Bonuses and Final Additional Bonus, if any. You can check the illustration in this article about Jeevan Umang Maturity calculator.
4) Participation in profits: Depending upon the company’s experience with regard to policies issued under this plan, the policy is eligible to participate in profits during the policy term.
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What are the various options in this LIC whole life insurance plan?
LIC Jeevan Umang Policy can be more comprehensive by opting for various options available under this plan like optional riders and the option to take the death benefit in installments.
I – Optional Riders
The following riders are available in this plan on the payment of an additional premium. The policyholder can opt between either of the LIC’s Accidental Death and Disability Benefit Rider or LIC’s Accident Benefit Rider.
LIC’s Accidental Death and Disability Benefit Rider – In case of accidental death, the Accident Benefit Rider Sum Assured will be payable as a lump sum along with the death benefit under the base plan. In case of accidental disability arising due to accident (within 180 days from the date of the accident), an amount equal to the Accident Benefit Sum Assured will be paid in equal monthly installments spread over 10 years and all the future premiums for Accident Benefit Sum Assured shall be waived.
LIC’s New Term Assurance Rider – This rider is available at the inception of the policy only. If this rider is opted for, an additional amount equal to Term Assurance Rider Sum Assured shall be payable on the death of the Life Assured.
LIC’s Accident Benefit Rider – In case of accidental death, the Accident Benefit Rider Sum Assured will be payable as a lump sum along with the death benefit under the base plan.
LIC’s New Critical Illness Benefit Rider – If this rider is chosen, on first diagnosis of any one of the specified 15 Critical Illnesses covered, the Critical Illness Sum Assured shall be payable. This rider is available at the inception of the policy only
LIC’s Premium Waiver Benefit Rider – this rider can be opted for on the life of Proposer of the policy (as the Life assured is minor), at any time coinciding with the policy anniversary. If this rider has opted for, on the death of the proposer, payment of premiums in respect of base policy falling due after the date of death till the expiry of rider term shall be waived.
II – Taking death benefits in installments
Instead of taking the death benefit in a lump sum, the insured may choose to take the death benefit in the instalment spread over 5 or 10 or 15 years. The installments shall be payable monthly, half-yearly, quarterly, or yearly as opted. The amount opted for by the Policyholder/Life Assured (ie. Net Claim Amount) can be either in absolute value or as a percentage of the total claim proceeds payable. The interest rates applicable for arriving at the instalment payments shall be as fixed by the company from time to time.
LIC Jeevan Umang Premium Chart
Here is the table that depicts sample premium chart for a basic sum assured of Rs 200,000 for different ages and different premium paying term.
Where can I check the Jeeva Umang Calculator?
You can check Jeevan Umang 945 premium calculator here.
What are the rebates in this policy?
One can avail high sum assured rebates (discount in premium).
|LIC Jeevan Umang – High Sum Assured Rebate|
|Basic Sum Assured||Rebate on tabular premium|
|2,00,000 to 4,75,000||Nil|
|5,00,000 to 9,75,000||1.25% of Basic Sum Assured|
|10,00,000 to 24,75,000||1.75% of Basic Sum Assured|
|25,00,000 and above||2.00% of Basic Sum Assured|
What are the Exclusions in LIC Jeevan Umang Insurance Plan?
The following are the exclusions in this policy:
If any life assured, irrespective of sane or insane, commits suicide at any time within 12 months from the date of commencement of risk, LIC is liable to give only 80% of the total premiums paid, provided the policy is in force. This clause is not applicable in case the age at entry of the Life Assured is below 8 years.
In case, the Life Assured (sane or insane) commits suicide within 12 months from the revival of the policy, an amount which is higher of 80% of the total premiums paid till the date of death or the surrender value available as on the date of death, shall be payable.
Please note that the premiums referred here do not include any tax, extra premiums, and any Rider premium except Term Assurance Rider.
Negative factors in this LIC Jeevan Umang
Now let us check on negative factors in this plan
1) Since this is a whole life plan, the premiums are high
2) Bonue rate can vary and final additional bonus is not guaranteed.
3) Sum assured is not paid if the life insured commits suicide in < 12 months of taking this plan.
LIC Jeevan Umang – Whole Life Plan – Explained with an example
Let us check how this plan works with an illustration.
Here is how the guaranted and non guaranteed benefits are computed till whole life (Click to enlarge this picture).
Also Read: Best Term Insurance Plans for 2020-21
Should you opt for LIC Jeevan Umang No. 945?
LIC Jeevan Umang is a whole life plan. One need to make payment for specific tenure, however the risk coverage would be till 100 years of age. One can get maturity benefits and 8% as annual payouts over the premium payment term till survival for life long. The premiums are high as it is a whole life plan and not comparable with any term insurance plans. The returns would be low, but are guaranteed. Low risk / Conservative investors who are looking for safe investments, but can compromise with low returns can consider such plans.
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is there reduced pay out options in this plan ?
please let me know
The payouts are fixed Sreecharan