- Introduction to LIC Jeevan Shikhar Plan
- Who should invest in LIC Jeevan Shikhar Policy
- Key Features of LIC Jeevan Shikhar Plan
- Advantages of LIC Jeevan Shikhar Policy
- Benifits offered under LIC Jeevan Shikharplan
- Tax benefits under LIC Jeevan Shikhar plan
- Loan Facility offered under LIC Jeevan Shikhar Policy
- What happens if LIC Jeevan Shikhar Policy Lapses
- What happens if the LIC Jeevan Shikhar Policy Holder Dies
- What happens if the LIC Jeevan Shikhar Policy is Closed before time
- Free Look Period offered for LIC Jeevan Shikhar plan
Jeevan Shikhar plan UIN no.(52N305VOI) is an endowment plan and is participative that is it partakes the share of profits of the company in form of annual bonuses declared. It is a non-linked plan that is it is not linked to the company’s investment in the share market meaning thereby that returns on this policy is independent of LIC’s investment in stock market. It is a saving cum risk cover plan offering a return on investment as well as protection against death and accidental risks.
Who Should Invest in LIC Jeevan Shikhar Policy:
The unique feature of this plan is that it is a single premium plan meaning thereby that premium is to be paid only once at the time of inception of the plan and all the benefits under the plan will be determined by the quantum of premium paid.
Proposer has option to choose a maturity sum assured that he would like to receive at the time of maturity of the policy and according to this amount of maturity opted, the single premium payable will be calculated. The plan provides life cover of ten times the single premium paid which becomes the sum assured payable at the time of death as death benefit. It provides a decent return at the time of maturity if the policy holder survives the term of the policy
Only one term that is 15 years term, is provided under the policy. The age at entry is between 6 to 45 years that is from a child of 6 years to a person of 45 years and all others in between can take this plan. Minimum sum assured at maturity is one lakh and can be increased at the multiples of 20000 for enhanced sum assured.
Key features of LIC Jeevan Shikhar policy:
- 1. The death benefit under the plan is substantial that is ten times of the single premium paid at the time of start of the policy becomes the sum assured or the amount to be paid as death benefit.
Death benefit will be payable as follows:
(a) On death during first five years of the policy: before commencement of risk return of single premium paid without interest.
(b) After commencement of risk ten times of single premium paid will be payable as death benefit.
(c) On death after completion of five policy years 10 times of the single premium plus loyalty additions will be payable.
2. Policy holder can choose a sum assured at the time of purchase of the policy which he would get at the time of maturity of the policy when he survives the term of the policy.
3. For those aged 8 years and above at the time of policy purchase risk will commence immediately from the date of policy issuance. For those who are less than eight years of age risk will start on the policy anniversary coinciding with or immediately following the age of his attaining eight years.
Advantages of LIC Jeevan Shikhar 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 Shikhar policy:
- When the policy holder survives the term of the policy he will be eligible for the maturity benefit equivalent to ten times of the single premium paid plus loyalty additions acquired by the policy depending on the profits declared by the corporation.LOYALTY ADDITIONS:
As it is a participative endowment plan the policy shall participate in the profits declared by the company which will be added to the policy moneys in form of loyalty additions. The loyalty addition hall be payable on death, surrender or maturity of the policy provided the policy has run for at least five policy years. The quantum of loyalty additions will depend upon the profits declared by the company, the sum assured and terms of the policy.
REBATE ON PREMIUMS:
Rebate on tabular premium at the following rates are applicable per 1000 maturity sum assured amount.
1. For Maturity sum assured between 2 lakhs to 4.8 lakhs the rebate is Rs.15 per thousand sum assured.
2. For Maturity sum assured between 2 lakhs to 4.8 lakhs the rebate is Rs.20/- per thousand sum assured.
3. For Maturity sum assured of Rs.10 lakhs and above the amount is Rs.25/- per thousand sum assured.
Tax benefits under LIC Jeevan Shikhar 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 Shikhar plan:
Policy provides loan facility to the policy holder after 3 months of date of issuance of the policy or after expiry of free look period whichever is later. Quantum of loan is dependent on age at entry and the percentage of surrender value fixed for that age group correlated with the number of policy years the policy has run as detailed below:
No. of pol. Yrs. Age up to 35 Yrs. Age more than 35 yrs.
Up to 3 years 55% of surrender value 35% of surrender value
4th to 6th yrs. 65% of surrender value 50% of surrender value
7th to 9th year 75% of surrender value 70% of surrender value
10th to 12 yrs. 80% of surrender value 80% of surrender value
13th to 15th yrs. 85% of surrender value 85% of surrender value
What happens if LIC Jeevan Shikhar policy lapses:
Since this policy is a single premium policy premium due under the policy is taken in lump sum at the time of inception of the policy. There is no premium liability of the policy holder during the term of the policy. Hence there is no question of the policy lapsing.
What happens if LIC Jeevan Shikhar policy holder dies:
Death benefit will be payable as follows:
1.On death during first five years of the policy: before commencement of risk return of single premium paid without interest.
2.After commencement of risk ten times of single premium paid will be payable as death benefit.
3.On death after completion of five policy years 10 times of the single premium plus loyalty additions will be paid.
What happens if policy is closed before time:
(A) If the policy is closed within first year of policy commencement 70% of the single premium paid will be returned.
(B) If the policy is closed after first year of policy commencement and thereafter in any subsequent year 90% of the single premium paid will be refunded.
What happens if LIC Jeevan Shikhar policy is closed before time:
(A) If the policy is surrendered within first year of policy commencement 70% of the single premium paid will be returned.
(B) If the policy is surrendered after first year of policy commencement and thereafter in any subsequent year 90% of the single premium paid will be refunded.
Free Look Period offered for LIC Jeevan Shikhar 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.