LIC's Jeevan Labh : Full Labh with Limited Premium
LIC Jeevan Labh is a traditional, non-linked,
with-profits plan offering duel benefits of investment and insurance. You pay
premiums for a limited period of time and at the end of the policy term, you
will get the Maturity Benefits. In case of death of the policyholder anytime
during the policy term, the nominee will get the Death Benefit. This article tries to provide complete
understanding of plan's specifications, premium, maturity, etc. For a complete understanding, an example with latest bonus rate has
also been illustrated.
Key Features
- High Bonus Rate
- Limited Premium Payment
Term.
- Policy Terms of 16, 21
and 25 years available and hence policyholder can choose plan as per
requirement / investment tenure.
- Riders such as Accidental
Rider and Term Rider available
- Premiums are exempted
under 80C
- Payouts (Maturity,
Surrender, Death Claim amount) amount is tax free under 10 (10D)
Premium Paying Term (in years)
|
10 for 16 years of
policy term
|
||
15 for 21 years of
policy term
|
|||
16 for 25 years of
policy term
|
|||
Sum Assured
|
Rs. 2,00,000
|
No Limit
|
|
Policy Term (in years)
|
16/21/25
|
||
Age at Entry
|
8 years (completed)
|
59 years for policy
term 16 years
|
|
54 years for policy
term 21 years
|
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50 years for policy
term 25 years
|
|||
Maximum Maturity Age
|
75 years
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||
Premium Paying Frequency
|
Annually,
Half-yearly, Quarterly, Monthly
|
||
Benefits under LIC’s Jeevan Labh policy
- Maturity
Benefit: At the time of maturity
of the policy, the policyholder will receive the following amounts:
- Sum Assured (plus)
- Simple Reversionary
Bonus which has been declared at the end of every year (plus)
- Final Addition Bonus, if any
- Death
Benefit in LIC Jeevan Labh policy: In
case of death of the policyholder anytime during the policy term, the nominee
will receive the total of the following:
- Sum Assured
- Simple Reversionary
Bonus which has been declared will date
- Final Addition Bonus, if
any
Now that we have gone thru theory of this plan, let’s understand it better with the help of an example
Amit
Kumar, age 30 wishes to buy this plan. He chose following
Sum Assured - Rs. 5, 00,000
Term - 21 years.
Sum Assured - Rs. 5, 00,000
Term - 21 years.
As
this is a limited premium payment plan, Mr Amit only have to pay for 16 years
(Refer table above)
Based on these parameters, his annual premium would be Rs. 27,484 (base premium + GST). From second year onward he has to pay Rs 26892 only.
Now let’s look at 2 scenario:
Based on these parameters, his annual premium would be Rs. 27,484 (base premium + GST). From second year onward he has to pay Rs 26892 only.
Now let’s look at 2 scenario:
A.
Maturity Benefit
If Mr. Amit survives till the end of the policy term of 21 years - He will get the Sum Assured + Simple Reversionary Bonus + Final Addition Bonus
Total Premiums Paid = Rs. 4,03,972
Sum Assured = Rs. 5,00,000
Simple Reversionary Bonus = Bonus rate taken here is Rs. 47 per 1,000 Sum Assured. This is bonus rate given in last 3 financial years. This is just an assumption and it may be higher or lower than this. Bonus is calculated as Sum Assured / 1000 * bonus rate * policy term. So bonus would be (500000/1000*47*21 = Rs, 4, 93,500)
Final Addition Bonus - Rs. 100 per 1,000 Sum Assured i.e. (Rs. 100 x 500) = Rs. 50,000. Here we have assumed a one-time Final Addition Bonus of Rs. 100 per 1,000 Sum Assured. This may be higher or lower than this.
So Mr. Amit will get Rs. 5,00,000 + Rs. 4,93,500 + Rs. 50,000 = Rs. 10,43,500.
If Mr. Amit survives till the end of the policy term of 21 years - He will get the Sum Assured + Simple Reversionary Bonus + Final Addition Bonus
Total Premiums Paid = Rs. 4,03,972
Sum Assured = Rs. 5,00,000
Simple Reversionary Bonus = Bonus rate taken here is Rs. 47 per 1,000 Sum Assured. This is bonus rate given in last 3 financial years. This is just an assumption and it may be higher or lower than this. Bonus is calculated as Sum Assured / 1000 * bonus rate * policy term. So bonus would be (500000/1000*47*21 = Rs, 4, 93,500)
Final Addition Bonus - Rs. 100 per 1,000 Sum Assured i.e. (Rs. 100 x 500) = Rs. 50,000. Here we have assumed a one-time Final Addition Bonus of Rs. 100 per 1,000 Sum Assured. This may be higher or lower than this.
So Mr. Amit will get Rs. 5,00,000 + Rs. 4,93,500 + Rs. 50,000 = Rs. 10,43,500.
Please note the tax saving in this plan would be Rs
1,21, 906 (assuming highest tax bracket). So total returns would be Rs 10.43
lakhs against premium payment of Rs 4.03 Laks (Rs 2.73 lakhs apprx after
considering tax rebates)
B.
Death Benefits
If Mr. Amit met with an unfortunate event after 5 years of policy. The calculations are as follows
Total Premiums Paid = Rs. 1, 35, 052
Sum Assured = Rs. 5,00,000
Simple Reversionary Bonus = Bonus rate taken here is Rs. 47 per 1,000 Sum Assured. This is bonus rate given in last 3 financial years. This is just an assumption and it may be higher or lower than this. Bonus is calculated as Sum Assured / 1000 * bonus rate * policy term. So bonus would be (500000/1000*47*5 = Rs, 1, 17,500)
So nominee of Mr. Amit will get Rs. 5,00,000 + Rs. 1,17,500 = Rs. 6,17,500.
If Mr. Amit met with an unfortunate event after 5 years of policy. The calculations are as follows
Total Premiums Paid = Rs. 1, 35, 052
Sum Assured = Rs. 5,00,000
Simple Reversionary Bonus = Bonus rate taken here is Rs. 47 per 1,000 Sum Assured. This is bonus rate given in last 3 financial years. This is just an assumption and it may be higher or lower than this. Bonus is calculated as Sum Assured / 1000 * bonus rate * policy term. So bonus would be (500000/1000*47*5 = Rs, 1, 17,500)
So nominee of Mr. Amit will get Rs. 5,00,000 + Rs. 1,17,500 = Rs. 6,17,500.
Jeevan Labh Riders
There
are two riders that can be opted in Jeevan Labh
1.
Accident and Disability Rider: Under this rider, if policyholder become disable
due to some accident, then the amount of this cover will be given in form of
monthly installments for 10 years. This rider comes handy as the monthly amount
will take care of any medical expenses resulting from the accident
2.
New Term Assurance Rider. This rider can be very apt addition your base cover.
This is equivalent to a term insurance policy cover which you can get for
additional premium. Upon death of policyholder, amount equal to Term Rider
would be given to nominee. Note the max cover uder this rider is limited to Rs
25 Lakhs.
We
strongly suggest to opt for these riders as per suitability to your existing
cover. With some extra premium policyholder get high coverage.
Other important features
· Grace Period - In case of Yearly, Half-yearly and
Quarterly premium payment mode you have a grace period of 30 days from the
premium due date. In case of monthly premium payment mode, the grace period is
of 15 days.
· Loan against
policy - One can avail a long against this policy after you have paid minimum
3 years of premium.
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