Key features and benefits of LIC Jeevan Labh Plan

Let us understand what is LIC Jeevan Labh Plan.

Nov 27, 2019 05:11 IST India Infoline News Service

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LIC Jeevan Labh is a simple endowment plan. It is a non-linked, limited premium paying, with-profits endowment life insurance plan. This plan offers a combination of both savings as well as protection to the insured. You pay premiums for a limited period of time and at the end of the policy term, you will get the maturity benefits. 

LIC Jeevan Labh Plan overview

LIC Jeevan Labh Plan offers death as well as maturity benefits with additional profit participation bonus. This plan has been rated high as one of the best-selling endowment plans offered by LIC. Being available to age group of 8-59 years, this plan offers a host of benefits to the policyholder. It is a limited premium payment plan i.e.  you don’t have to pay the premiums for the entire duration of the term of the policy.  
 
LIC Jeevan Labh Plan 836 key features:
  • Minimum age to apply for the scheme is 8 years
  • Maximum maturity age for the scheme is 75 years
  • Policy term options can be selected from the three options i.e. 16 years/21 years/25 years
  • Premium paying term options are 10 years, 15 years or 16 years respectively
  • Minimum sum assured is Rs 2lakh
  • At the event of death, the policyholder's nominee will receive Sum Assured + Bonus + Final Additional Bonus (if any)
  • At maturity benefit, the policy holder will receive Sum Assured + Bonus + Final Additional Bonus (if any)
  • Offers a premium payment frequency of either yearly, half-yearly, quarterly, monthly as well as salary savings scheme
  • Offers a loan facility if the policy holder has paid the premiums for 3 years regularly and if the plan has reached a surrender value
  • Offers a free look period of 15 days from the date of policy issuance
  • Offers a revival period of 2 years. A policyholder can revive the policy from the date of the first unpaid premium by paying the arrears as well as the interest and other expenses 

LIC Jeevan Labh plan benefits: 

The benefits payable under an in-force policy are as under: 
  • Death benefit: Death benefits are paid out as the sum of ‘Sum Assured on Death’ plus Simple Reversionary Bonuses plus Final Additional Bonus (if any). The sum assured on death is the highest of either 10 times of annual premium paid or the basic sum assured. The death benefit will not be lower than 105% of overall premium amount paid as of date of death.
  • Maturity benefit: On maturity of the policy, the policyholder will receive the sum assured on Maturity as lump sum, which is equal to basic sum assured plus vested Simple Reversionary Bonuses and Final Additional Bonus, if any.
  • Profit participation: This policy is participating in nature and policyholders are entitled to get the Simple Reversionary Bonuses as declared by the company if the policy is in full force. A Final Additional Bonus may also be given when a claim has been filed for maturity or death.
  • Rebate: The LIC Jeevan Labh policy offers a rebate on 2% of the yearly premium and 1% of the half-yearly premium payments. Also, a rebate of 1.25% of the total sum assured is offered in case the sum assured is Rs5 lakh to Rs9.9lakh. A rebate of 1.50% of the basic sum assured is offered if the amount of sum assured is Rs10 lakh to Rs14.9 lakh. If the sum assured is Rs15 lakh and above, a rebate of 1.75% if offered.
  • Loans: LIC Jeevan Labh offers a loan facility once you complete 3 years of the policy period and if the premiums were paid regularly. The policy also should have acquired a surrender value to be eligible for a loan facility.
  • Tax benefits: The premiums paid towards the LIC Jeevan Labh policy is exempted from income tax under the Section 80C of the Income Tax Act, 1961. Besides, the maturity amount receivable is also tax free under Section 10(10D).
 
Snapshot of LIC Jeevan Labh features & benefits
Minimum Age For Policy 8 years
Maximum Age For taking Policy 59 years
Tenures of Policy 16 years, 21 years and 25 years
Premium paying term For 25-year policy - 16 years
For 21-year policy - 15 years
For 16-year policy -25 years
Maturity Benefit Guaranteed equal to sum assured
Bonus Reversionary bonus and final bonus. It is NOT guaranteed
Riders Accidental Death Benefit rider& Disability rider
Term assurance rider
Minimum sum assured 2,00,000
Maximum Sum assured No Limit
Mode of premium payment Yearly, half-yearly, quarterly and monthly.
Rebate 2% less premium for yearly payment
Rebate is also available for a basic sum assured above Rs 5 lakh.
 

LIC Jeevan Labh Policy riders: 

The riders offered by LIC Jeevan Labh Policy are:
  • LIC’s Accidental Death and Disability Rider: LIc Jeevan Labh policy offers comprehensive protection against accidental death and disability to the policyholders and their nominees in the form of disability benefit rider. This add-on cover is available at an additional premium payment. This rider is only available to those over 18 years of age.
  • LIC’s New Term Assurance Rider: This is another add-on cover that has been carefully conceptualized and introduced by LIC to ensure comprehensive financial protection for the nominees of the life insured. Upon the death of the policyholder, during the term of the policy, an additional amount equivalent to term assurance rider sum assured is paid out to the nominees. However, the term assurance rider sum assured is only paid out if the rider cover is in effect. Also, the maximum coverage amount provided under term assurance rider is Rs25 lakhs.
  • Other features of the LIC Jeevan Labh plan:
  • Revival period: Offers a revival period of 2 years. A policyholder can revive the policy from the date of the first unpaid premium by paying the arrears as well as the interest and other expenses.
  • Free look period: Offers a free look period of 15 days from the date of policy issuance.
  • Grace period: Offers a grace period of 30 days in case you miss the due date to make the premium payment in case of yearly, semi-annual and quarterly mode. The grace period is 15 days in case of monthly payment mode.
  • Policy lapse & surrender value: If you surrender the policy or simply fail to pay premiums in the first 3 years of its existence, you get nothing back. In other words, for the policy to acquire a surrender value, you should have paid your premiums for at least the first three years. If you surrender the policy after 3 years, you get a ‘Guaranteed Surrender Value.’ This is the sum total of the premiums you paid multiplied by the ‘guaranteed surrender value factor.’ This goes from 30% in year 3 to 80% in the final year. In other words, if you surrender before maturity you do NOT get all your premiums back. 

LIC Jeevan Labh exclusions:

If the insured commits suicide within one year of the policy period, then the insurance company doesn't offer any sum assured to the nominee. However, in case of suicide beyond one year of the policy period, 80% of the premiums without any interest are paid to the nominee. 

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