LIC Jeevan Utsav: A Plan for Lifetime Guaranteed Income

Introduction

            Life Insurance Corporation of India or LIC has launched a new individual, savings and whole life insurance plan. The scheme is an unaffiliated, non-participating scheme. It is a comprehensive life insurance policy that provides lifetime coverage. Unlike term insurance plans that cover a person for a specific period of time, whole life insurance, as the name suggests, provides coverage for the entire life of the insured person. This insurance plan not only provides death benefits to the beneficiaries after the death of the policyholder, but also has a savings component that accumulates cash values ​​over time.

Policy features

            It provides death cover and survivorship benefits: regular and flexi-income benefits. Senior citizens can get guaranteed income for life under this policy. In addition to the basic amount for the premium paying period Rs. 40,000 is assured at the end of every year.

1. Survival Benefits:

            Policyholders who survive the policy pay-out period have two options for availing survival benefits:

• This scheme is available for the age group of 90 days to 65 years. It provides guaranteed lifetime income and lifetime risk protection.
• Minimum premium payment period is 5 years and maximum premium payment period is 16 years
• Sum Assured @ Rs.40 per thousand Basic Sum will be available at the end of premium payment period for every policy year for which premium is paid.

In life insurance assured after the premium payment period, the policyholder can choose:

Option I  – Regular Income Benefit

            10 per cent of the Basic Sum Assured, payable at the end of each policy     year, starting after 3 to 6 years of the deferment period.

Option II –  Flexi Income Benefit

            Policyholders can opt for a Flexi Income Benefit under which 10    percent of the Basic Sum Assured payable can be accumulated and withdrawn later, subject to the terms and conditions of the policy. LIC shall pay interest on such Deferred Flexi Income payments @ 5.5 per cent p.a., compounding yearly.

1. Death Benefit

            Benefits include ‘sum assured on death’ and accumulated sum assured. Death benefit is the total premium paid till death, minus any rider or additional premiums and taxes paid. The sum assured is seven times the basic or annual premium. Policyholders can avail death benefits in monthly, quarterly, half-yearly and annual installments instead of a lump sum.

            Since the policyholder is given a life insurance policy, the death benefit is paid as follows:

• If the life assured dies after the date of commencement of risk, a death benefit equal to the “sum assured on death” and accumulated sum assured will be paid if the policy is in force. This death benefit shall not be less than 105 percent of the total premium paid till the date of death. “Death Sum Assured” means the ‘sum assured’ or ‘7 times the annual premium, whichever is higher.
• Maturity benefits are not available under this scheme as Regular/Flexi Income benefits continue for life as per fellow option.
• Additional cash flow through debt
• Attractive high sum assured discount available.
• This product fulfills the long pending demand for low, flexible premium payment period.
• Five optional riders are available under this scheme. Accidental death of policyholder LIC and
• Disability Benefit Rider or LIC’s Accident Benefit Rider and remaining three riders namely LIC’s New Term Assurance Rider, LIC’s New Critical Illness Benefit Rider and LIC’s Premium Waiver Benefit Rider are available by paying additional premium as per eligibility.
• One can buy this plan offline through licensed agents, corporate agents, brokers and insurance marketing companies. One can visit LIC website and buy online.

LIC Jeevan Utsav Plan Parameter

Table 1

LIC Jeevan Utsav Plan Parameter

Paid-up sum assured under Regular Income Benefit and Flexi income Benefit     

         On survival of Life Assured, the policyholder shall be eligible for Regular Income Benefit and Flexi Income Benefit as specified below at the end of each policy year starting from the year as mentioned in Table 1 of Para 3.B :

Table 2

Paid-up sum assured under Regular Income Benefit and Flexi income Benefit

Guaranteed Surrender Value Factors

                  The Guaranteed Surrender Value Factors applicable to total premiums paid are expressed as percentages and depend on the policy year in which the policy is surrendered and are as specified below:

Table 3

Guaranteed Surrender Value Factors applicable to total premiums paid

                  The Guaranteed Surrender Value Factors applicable to Guaranteed Additions are expressed as percentages and depend on the policy year in which the policy is surrendered and are as specified below:

Table 4

Guaranteed Surrender Value Factors applicable for Guaranteed Additions

Conclusion

            This policy is suitable for those who need regular income and not maturity benefits. It is also suitable for those who have to give to their children or grandchildren as they will receive the amount throughout their lifetime and remember their parents or grandparents whenever they receive the amount.