Introduction:

Jeevan Saral is an endowment policy where policy holder choses a premium amount that he wants to pay and the mode of payment and the rest of the variables like sum assured, maturity amount etc.is determined by the premium option that he has exercised. The monthly premium amount opted by the policy holder will determine the sum assured and other benefit available under the policy.

Who Should Invest in LIC Jeevan Saral Policy:

Unique selling proposition of this plan is that it has a lot of flexibilities that are available mostly under the unit linked insurance policies even when it is an endowment plan with the inherent benefits of such plans. The death benefits under the plan is double the sum assured under the policy plus the return of the premium paid till the date of death excluding extra or rider premiums. If policy holder opts for accidental and disability rider by paying add-on premium this policy offers one of the highest risk covers available in LIC plans.

How LIC Jeevan Saral Policy works :

  1. This policy can be taken by a child of 12 years to a senior citizen of sixty years. In other words, it is a fit all policy for any person who wants return on his investment as well as a good risk cover on his life.
  2. Once a person decides to take this plan he has to opt for a premium amount that he can comfortably pay as per the mode of payment opted for.
  3. The monthly premium amount multiplied by 250 will amount to sum assured under the policy which becomes the basic amount that is payable to him /nominee on Death/maturity. However, this amount will be further increased by loyalty additions as well as additional benefits of the riders taken.

Key features of LIC Jeevan Saral policy:

  1. Premiums to be paid is chosen by the policy holder as per his perceived capacity to pay and the monthly premium chosen as such will be multiplied by 250 to arrive at the sum assured under the plan. In other words, the sum assured is flexible and is determined by the policy holder himself when he opts for a particular quantum of premium that he opts to pay.
  2. Death benefits will include sum assured under the policy plus return of the premiums received till the date of death excluding extra or rider premium or first year premium, plus loyalty additions earned under the policy.
  3. Maturity benefit under the plan is sum assured plus loyalty additions earned under the plan during the term of the policy.
  4. Extended risk cover is allowed for one year after three years premiums are paid.
  5. Policy holder can opt for higher risk cover if he takes a term rider plus accidental and disability rider by payment of extra premium.
  6. Policy holder has the option to surrender the policy and take the payment of policy money in case of a financial emergency or need during the term of the policy. The only condition is that the policy must have run for at least five years to entitle the policy holder to avail of this benefit. This benefit unlike other traditional plans of LIC has an advantage that no surrender penalty is applicable when policy holder surrenders after the policy has run for five years.
  7. Policy earns loyalty additions after it has run for at least nine years that is after nine premiums have been paid.

Benefits offered under the LIC Jeevan Saral policy:

  1. Death Benefit:
    In case of death of the life assured during the term of the policy his nominee gets as follows:
    1. Sum assured amount which is 250 times the monthly premium paid under the policy.
    2. In addition to the above the nominee gets return of all the premium paid till the date of death of the policy holder excluding extra premiums or add on premiums(riders) taken for additional benefits.
    3. In addition to the above death benefit will also include loyalty additions earned under the policy till the date of death.
  2. MATURITY BENEFIT:
    Maturity benefit is paid when policy holder survives the entire term of the policy. In that case he will get the maturity sum assured which will be calculated as per the age which he has taken the policy and the policy term that he had opted for. Maturity benefit will also include loyalty additions earned under the policy.
  3. ACCIDENT AND DISABILITY BENEFITS:
    Accidental and disability benefits is also available under this plan if the policy holder opts to pay extra premiums to take accidental and disability riders. In such case additional sum assured will be payable on the happening of death or disability during the term of the policy subject to terms and conditions.

Tax benefits under LIC Jeevan Saral plan:

  1. 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.
  2. 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.
  3. 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 Saral plan:

Loan facility is available under the policy when the policy has run for three years and has acquired surrender value.

What happens if LIC Jeevan Saral 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.

If policy holder stops paying premium after three years the policy acquires paid up value and would be eligible for benefits as per reduced sum assured that is benefits are in proportion to the premiums paid.

If the policy holder opts for surrender of the policy after 3 years he will be entitled to Guaranteed surrender value which is 30% of all premiums paid minus first year premium. Further he will be entitled to Special surrender value which is 80% of maturity sum assured if up to 4 years premiums has been paid. He will be entitled to 90% of maturity sum assured if four years premium but less than five years premium has been paid. He will be entitled to 100% of maturity sum assured is more than five years premiums has been paid.

What happens if LIC Jeevan Saral 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 Saral policy is closed before time:

If policy is closed before time that is before all the premium due are paid there are two situations:
1. 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.
2. 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. Subject to conditions and years of premiums paid policy holder will be paid Guaranteed surrender value, special surrender value and full sum assured

Free Look Period offered for LIC Jeevan Saral 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.