Insurance Review : LIC’s Jeevan Umang - Features and Benefits - Grow Wealth Advisors

Is it a Pension Plan? Is it a whole life Plan... No Its both, Its LIC Jeevan Umang

LIC Jeevan Umang (Table No: 845) is a non-linked whole life assurance plan which provides fixed yearly amount (8% of Sum Assured Per Year) after completion of premium payment up to 100 year of age and on lump sum amount on Maturity (completion of 100 years) or death. So basically this plan is a epitomizes LIC motto of “Jindagi ke Sath Bhi, Jindagi Ke Baad Bhi”

LIC Jeevan Umang Plan 845 was launched on from 16th May, 2017.

Basically, LIC Jeevan Umang is a whole life product i.e. it provides life coverage up to 100 years of age. In other words, a whole life plan is a life insurance plan which remains throughout the lifetime of the policyholder.

Key Features 

• Whole life plan with profits
• The coverage will be till 100 years
• 8% of the Sum Assured will be payable each year till end of term. This amount is Tax free
• The premiums paid are exempted under sec 80(c)
• Three riders namely, Accidental Death and Disability Benefit (ADB) Rider, Term Rider and Critical Illness Rider are available under this plan. Note Accidental Risk cover is inbuilt in this plan and is different from ADB rider. Note Rider Sum Assured can not exceed Basic Sum Assured.
• Simple reversionary bonus is payable on maturity or death
• Maturity amount is tax free under 10 (10D).

This plan can be viewed as a Pension plan which gives pension till death to proposer and lump sum to nominee post death of proposer

Eligibility Conditions

Age at Entry	Minimum	90 Days
	Maximum	55 Years for 15 Years Premium Paying Term (PPT)
		50 Years for 20 Years Premium Paying Term (PPT)
		45 Years for 25 Years Premium Paying Term (PPT)
		40 Years for 30 Years Premium Paying Term (PPT)
Premium Paying Term		15 Years, 20 Years, 25 Years or 30 Years
Age to start Survival Benefits	Minimum	30 Years
	Maximum	70 Years
Age at Maturity		100 Years
Policy Term		100 Years - Age at Entry
Sum Assured	Minimum	Rs 2,00,000
	Maximum	No Limit (in multiples of Rs 25,000)
Premium Paying Mode		Yearly, Half Yearly, Quarterly, Monthly

Commencement of Risk 

If policyholder is 8 years or above at time of purchasing of policy, the risk i.e. Life Cover will start immediately.

If policyholder is less than 8 years old, the risk commencement will start after 2 years of policy issuance or completion of 8 years, whichever is earlier. 

Policy Benefits 

Jindagi ke Sath Bhi, Jindagi Ke Baad Bhi

The distinguishing feature of this policy is the availability of 3 benefits. They are summarized below :

Survival Benefit

On the life assured surviving to the end of the premium paying term, provided all due premiums have been paid, a survival benefit equal to 8% of Basic Sum Assured shall be payable each year. The first survival benefit payment is payable at the end of premium paying term and thereafter on completion of each subsequent year till the Life assured survives or till the policy anniversary prior to the date of maturity, whichever is earlier.

Maturity Benefit

On the life assured surviving to the end of the policy term, provided all due premiums have been paid, “Basic Sum Assured” along with vested Simple Reversionary Bonuses and Final Additional bonus, if any, shall be payable.

Death Benefit

Death Benefit, defined as sum of “Sum Assured on Death” and vested Simple Reversionary Bonuses and Final Additional bonus, if any, shall be payable.

Where “Sum Assured on Death” is defined as the highest of

10 times of annualised premium; or

Sum Assured on Maturity; or

Absolute amount assured to be paid on death, i.e. Basic Sum Assured.

This death benefit shall not be less than 105% of all the premiums paid as on date of death.

Illustration 

Lets understand the policy thru a example. In this example, we have taken a below details

Age at Entry : 30 Years

Premium Paying Term : 15 Years

Sum Assured : Rs 10 Lacs

As can be seen in image above, the premium paying term will be till 45 years (30+15). Post this the Tax Free Survival Benefits of Rs 8000 per year (1000000*.08) will begin which will be till death or 100 years of age whichever is later. In event of death anytime during policy term, Basic Sum Assured + Simple reversionary Bonus + Loyalty Additions (LA) will be paid. If policyholders survive the term, Basic Sum Assured + simple reversionary Bonus + Final Additional Bonus (FAB) will be paid

Other features

Loan Facility

Loan can be availed during the policy term provided the policy has acquired a surrender value and subject to the terms and conditions as the Corporation may specify from time to time.

If loan is availed during the premium paying term:

The maximum loan as a percentage of surrender value shall be as under:

For inforce policies- upto 90%

For paid-up policies- upto 80%

If loan is availed after the premium paying term:

The maximum permissible amount of new loan shall be arrived at in such a way that the effective annual interest amount payable on loan does not exceed 50% of the annual survival benefit payable under the policy.

Any loan outstanding along with interest shall be recovered from claim proceeds at the time of exit.

Free Look Cancellation

Free look period-15 days available from the date of receipt of policy bond if the policyholder is not satisfied with the “Terms and Conditions” of the policy.