- Introduction to LIC Jeevan Labh Plan
- Who should invest in LIC Jeevan Labh Policy
- How LIC Jeevan Labh Policy Works
- Key Features of LIC Jeevan Labh Plan
- Advantages of LIC Jeevan Labh Policy
- Benifits offered under LIC Jeevan Labh plan
- Tax benefits under LIC Jeevan Labh plan
- Loan Facility offered under LIC Jeevan Labh Policy
- What happens if LIC Jeevan Labh Policy Lapses
- What happens if the LIC Jeevan Labh Policy Holder Dies
- What happens if the LIC Jeevan Labh Policy is Closed before time
- Free Look Period offered for LIC Jeevan Labh plan
LIC Jeevan Labh policy. Table 836, UIN-512N304V0I, is an endowment plan that gives a decent return as well as covers the Life risk and accidental risk of the life assured during the term of the policy. This is a non-linked policy which means that the investment made in the policy will not be invested in the share market thus it is free from market fluctuations and risks and its returns thereby does not depend on the stock market.
Who Should Invest in LIC Jeevan Labh Policy:
- This policy is very beneficial for a child’s future needs of education, marriage or any other expenses like house building etc. It can also be taken by a teenager, an adult or a person nearing his superannuation.
- The eligible age group is 8 years to 9 years of age. The minimum sum assure is 2 lakhs and there is no maximum limit.
- A child can opt for it when he/she completes 8 years of age and a person of 59 years of age ca take for a maximum term of 16years.
- A person aged 54 years can take a policy for a maximum term of 21 years and a person of 50 years of age can take a policy for a maximum term of 25 years.
The policy’s unique selling proposition is that it can provide more coverage while the life assured pays for a limited term. For instance, a person of 50 years of age can take a policy for 25 years term while his premium paying term will only be for 16 years.
Thus, he will have to pay premium only for 16 years but his risk coverage for 25 years that it till he attains 75 years of age. Similarly, a person of 59 years of age can take a policy for 16 years term but will have to pay the premium only for 10 years. Likewise, a person of 54 years of age can opt for a policy term of 21 years but will have to pay the premium for 10 years.
The policy term is thus calculated so that maximum maturity age is 75 years is all cases as in above mentioned instances, although the premiums paid is for a lesser period. Thus a person in higher age bracket will have lesser premium paying term although his premium rate will be a bit higher due to his higher age
How LIC Jeevan Labh Policy works :
- After taking a decision to opt for this product the proposer can take the policy either directly going to a branch or through an LIC agent or a broker.
- You can opt premium paying option according to your convenience and capacity to pay it either in monthly, quarterly, Half yearly of Yearly mode.
- You will get a rebate on the mode selected only for yearly and half yearly mode. For instance, if you opt for yearly mode you will get 2%% rebate on the premium and if you opt for half yearly mode you will get 1% rebate on the premium payable.
- There will be no rebate on quarterly or monthly mode of paying the premium.
- If you can pay annual premium assuming that you have capacity to pay a comparatively higher amount being only once in a year that yearly mode is not only most convenient but also the cheapest as it will attract 2% rebate offered by LIC on yearly modes of payment.
- It is convenient as you will pay only once in a year and will have no botheration of paying twice (half yearly mode) of four times (quarterly mode) of paying the premium. Therefore, yearly mode of paying premium is recommended if you have the capacity to pay once in a year.
- Once the premium is paid you will get the policy document in about 15 days’ time giving entire policy conditions including date of commencement, date of maturity, premium amount and mode of paying premium and maturity date and sum assured.
- You also get a free look option which offers you an option to cancel the policy within 15 days of its receipt if any conditions of the policy does not suit you or is different from what the agent or the representative of the company promised at the time of sale of the policy.
- You will be covered for all the risks mentioned in the policy document from the date of commencement of the policy mentioned in the policy document.
It is advisable to maintain a policy file and put all the papers relating to the policy in this file.
- The premium paid receipts should be filed year wise as an evidence of premiums paid and also for income tax purposes.
- Tell your spouse or other family members about the policy file location and also remember the date of premium payment as it is crucial as late payment will invite interest penalty and missed payment will render the policy lapsed and all benefits will be withheld.
Key features of LIC Jeevan Labh policy:
- Jeevan Labh is an endowment with profit policy meaning thereby that insured is covered for the risk policy term for risks provided therein and he also gets the benefit of investment on maturity in form of sum assured and bonus accrued for the number of years the policy was in force.
- Premium paying term is much lesser than the policy term. For instance, a person of 50 years will have to pay premium only for 16 years but will have coverage for 25 year that is till he attains the age of 75 years.
- It is ideal plan for providing for a child’s future expenses like higher education, marriage or purchase of property, as it can be taken for a child who has completed 8 years of age and its maturity can be at the time of anticipated future expenses to be incurred on child.
- Accidental and term riders can be obtained by payment of nominal extra premium.
- Income tax benefits is available.
- Rebate on High Sum Assured is available as below
1.25% for sum assured of 5 lacs to 9,90,000
1.50% for sum assured of 10 lacs to 14,90,000.
1.75% for sum assured 15 lacs and above.
- Rebate on annual mode of premium payment is 2% and for half yearly mode is 1%
Advantages of LIC Jeevan Labh policy:
- It is an endowment policy providing for risk coverage as well as a decent return on investment.
- Since it is a non-linked policy it is a low risk option of insurance and investment as the amount invested will not be invested in stock markets.
- It is most suitable policy for children’s education and for providing for their future anticipated expenses.
- Since the premium paying term under the policy is much lesser than the policy term the policy holder gets additional risk coverage without paying any premium for the period over and above the premium paying term.
- Policy holder is provided option of taking high sum assured rebates and higher mode of premium payment rebates which in effect substantially reduces the premium for the entire term of the policy.
Benefits offered under the LIC Jeevan Labh policy:
- Maturity benefit: If policy holder survives the term of the policy he will be paid sum assured under the policy plus accrued bonus plus final additional bonus.
- Death Benefit: In case of death of life assured during the term of the policy and if all the premium till the date of death are paid, then death benefit I paid to the nominee. It will include Sum Assured under the policy plus accrued bonus plus Final Additional Bonus.
- Accidental Death: In case of accidental death during the term of the policy additional sum assured equal to sum assured plus Sum Assured plus bonus and Final additional bonus will be paid.
Tax benefits under LIC Jeevan Labh plan:
- Premium paid under this plan is eligible for exemption under section 80 (c ) of the income tax act. The maximum exemption of Rs.1.5 lacs can be availed under this section of income tax act.
- Maturity: The amount of maturity benefit received under this plan is exempted under section 10(D) of income tax act. The sum assured should be at least 10 times the premium paid to be eligible for exemption under this section.
- Death Claim: there is no tax liability on death claim paid under the plan irrespective of the amount paid.
Loan Facility offered under LIC Jeevan Labh plan:
Loan facility can be availed by the policy holder on the policy acquiring surrender value, that it when three annual premiums are paid.
What happens if LIC Jeevan Labh policy lapses:
The policy lapses if the premium is not paid with the days of grace of 30 days for quarterly, half yearly and yearly mode and 15 days for monthly mode of payment of premium, death claim is not payable subject to other conditions including the number of years the policy has run before it lapses due to non-payment of premium. Therefore, it is of utmost importance that premiums are paid by due date or at the most within the days of grace.
What happens if LIC Jeevan Labh policy holder dies:
If the life Assured dies during the term of the policy Death Benefit would be payable. It would be Sum Assured plus vested bonus accrued under the policy till the date of death plus final additional bonus.
What happens if LIC Jeevan Labh policy is closed before time:
If policy is closed before time that is before all the premium due are paid there are two situations:
- If policy is closed before three yearly premiums are paid it does not acquire any paid-up value and it lapses due to non-payment of premium and nothing is payable.
- However, if at least three full years premiums are paid and any subsequent premium is not paid non-forfeiture regulation operates and policy is not wholly void but the sum assured shall be proportionate to the premiums paid and such value is payable to the policy holder. Bonuses are payable only up to the period the premiums are paid and on death or maturity the reduced sum assured along with the vested bonus is paid.
Free Look Period offered for LIC Jeevan Labh plan:
In the event of the policy holder finding any of the policy condition not according to what was explained by the agent or company representative or he finds certain conditions not suited to him he can return the policy within 15 days of its receipt to the office of the company.