LIC Jeevan Labh

LIC Jeevan Labh is a popular limited premium paying life insurance plan that offers a combination of risk cover and savings. It is a non-linked, endowment plan designed to provide financial protection against death, coupled with a savings element that can be utilized to meet specific future needs like children’s education, marriage, or retirement.

Key Features of LIC Jeevan Labh:

1. Type of Plan:
   • Combination of Endowment and Term Insurance.
   • It provides financial protection through a combination of risk cover (for death) during the policy term, and savings benefits at the end of the policy term in case of survival.
2. Policy Term:
   • The policy offers flexibility in the policy term, ranging from 16 to 25 years, depending on the option you select.
3. Premium Paying Term:
   • The premium paying term is limited, which means the policyholder has to pay premiums for a shorter duration than the policy term (typically 10 years or 15 years).
4. Sum Assured on Death:
   • Sum Assured on Death is the minimum amount payable in case of the policyholder’s death before the policy matures. The sum assured can be selected based on your requirements.
   • Additionally, the policy includes bonuses that may increase the payout.
5. Bonus Facility:
   • Being an endowment plan, LIC Jeevan Labh participates in the corporation’s life insurance business and is eligible to receive bonuses.
   • The bonus is declared annually and can be either simple reversionary bonuses or final additional bonuses.
6. Loan Facility:
   • You can avail of a loan against the policy from LIC if the policy has acquired a surrender value.
7. Risk Cover:
   • Provides a life cover for the policyholder during the policy term. In case of death, the nominee receives the sum assured on death along with any bonuses accrued.
8. Maturity Benefit:
   • If the policyholder survives the entire policy term, they receive the sum assured on maturity, along with any bonuses accumulated over the policy term.
9. Flexibility in Premium Payment:
   • Premium payments can be made on an annual, semi-annual, quarterly, or monthly basis.

Benefits of LIC Jeevan Labh:

1. Risk Cover + Savings:
   • Provides both a death benefit and maturity benefit, making it a good combination of life cover and savings.
2. Tax Benefits:
   • Premiums paid towards the policy qualify for tax deduction under Section 80C of the Income Tax Act.
   • The sum assured and bonus received are tax-free under Section 10(10D), provided certain conditions are met.
3. Flexible Sum Assured:
   • The sum assured can be chosen according to the policyholder’s financial goals and needs.
4. Suitable for Family Protection:
   • Offers a life cover, which makes it a good choice for protecting the financial future of the policyholder’s family.
5. Participating Plan:
   • The plan participates in the corporation’s profit-sharing and offers bonuses that increase the overall returns.
6. Loan Facility:
   • You can avail of a loan against the policy if you need urgent funds.

Eligibility Criteria:

• Age: Minimum 8 years (completed), and maximum 59 years (near the end of the policy term).
• Policy Term: 16 to 25 years.
• Premium Paying Term: 10 to 15 years, depending on the policy term.
• Minimum Sum Assured: ₹2,00,000 (can go higher depending on the chosen coverage).

Riders Available:

LIC Jeevan Labh allows you to enhance your coverage by adding additional riders:

1. LIC’s Accident Benefit Rider: Provides additional coverage in case of accidental death or permanent disability due to an accident.
2. LIC’s Critical Illness Rider: Offers coverage for life-threatening conditions like cancer, heart attack, stroke, kidney failure, etc.
3. LIC’s Disability Benefit Rider: Provides financial protection in case of disability due to an accident.

How LIC Jeevan Labh Works:

1. You choose a policy term (e.g., 20 years) and a premium paying term (e.g., 10 years).
2. You pay premiums for the specified period (10 years).
3. During the policy term, if you pass away, your nominee receives the sum assured on death along with bonuses.
4. If you survive the policy term, you receive the sum assured on maturity along with accumulated bonuses.

Example of LIC Jeevan Labh (Basic Calculation):

Let’s say you opt for a 20-year policy with a sum assured of ₹5,00,000 and a premium paying term of 10 years.

• Premium: You will pay premiums for 10 years, but your policy term will be 20 years.
• Death Benefit: If you pass away within the first 20 years, your nominee will receive ₹5,00,000 (Sum Assured on Death) + Bonuses.
• Maturity Benefit: If you survive the full term, you will receive ₹5,00,000 (Sum Assured on Maturity) + Bonuses.