LIC Jeevan Lakshya Plan

LIC Jeevan Lakshya - Table No. 833

LIC Jeevan Lakshya Policy is a participating endowment plan which provides both investment and insurance benefits. Since it is a participating plan, bonus benefits will be available. In case of death of the policyholder a regular income is provided to the nominee in addition to a lumpsum at the date of Maturity. There are some additional benefits which you can take in the form of riders. We will explain the benefits of this plan with the help of a few examples.
 

Launch Date	4th March, 2015
Plan Details	Table No. 833
Policy Type	Endowment

 

How does LIC Jeevan Lakshya Policy work?

When buying the LIC Jeevan Lakshya Plan, the customer has to decide on the following:

1. Basic Sum Assured - this is the amount of cover that you want. You can choose a minimum amount of Rs. 1,00,000. There is no upper limit.
2. Policy Term - this is the period for which you wish to have the cover. The term can be anywhere between 13 to 25 years
3. Premium Payment Term - You need to pay the premiums for the Policy Term minus 3 years only.

Based on the basic sum assured, your age and the policy term selected. your annual premium will be decided. 

Since it is a Participating plan, you will receive Simple Reversionary Bonus and Final Additions as and when declared by LIC.
 

Benefits in the LIC Jeevan Lakshya Plan

Death Benefit in LIC Jeevan Lakshya Plan

In case of the death of the policyholder before the end of the policy term, the nominee will receive all of the following:

• 10% of the Basic Sum Assured as an Annual Income Benefit from the next policy anniversary date to the policy anniversary date one year before the Maturity Date. We will explain this better in the example.
• 110% of the Basic Sum Assured payable on the Maturity Date
• Simple Reversionary Bonus which has accrued throughout the policy term payable on the Maturity Date
• Final Addition Bonus if declared payable on the Maturity Date

 The Death Benefit shall not be less than 105% of all premiums paid as on date of death of the policyholder.


Maturity Benefit in LIC Jeevan Lakshya Plan

At the end of the policy term, the policyholder will receive the following:

• Basic Sum Assured
• Simple Reversionary Bonus
• Final Addition Bonus if declared

LIC Jeevan Lakshya Plan with an Example

We have Nitesh Dubey, age 35 who wishes to buy this plan. He goes in for the plan with the following:

Sum Assured - Rs. 2,00,000

Term - 25 years
Premium Payment Term = 25 - 3 = 22 years

Based on these parameters, his annual premium is Rs. 8,645 + Taxes = Rs. 9,034. Here we have assumed the current tax rate of 4.5%.

Death Benefit

Scenario 1 : If Nitesh dies after 4 policy years.

In 4 years, he would have paid Rs. 36,136 as premiums. The Sum Assured of his plan is Rs. 2,00,000.  

His nominee will get the following benefits:

• Annual Income Benefit of 10% of Sum Assured - Rs. 20,000. At the end of the 4th year, the nominee will get Rs. 20,000. This amount would be paid every year till the end of the 24th year.
• 110% of Sum Assured - Rs. 2,20,000. At the end of the 25th year the nominee will get Rs. 2,20,000 
• Along with the Rs. 2,20,000 the Simple Reversionary Bonus which has accrued in the plan along with any Final Addition Bonus will also be paid to the nominee.

Scenario 2 : If Nitesh dies after 15 policy years

In 15 years, he would have paid Rs. 1,35,510 as premiums. The Sum Assured of his plan is Rs. 2,00,000.  

His nominee will get the following benefits:

• Annual Income Benefit of 10% of Sum Assured - Rs. 20,000. At the end of the 15th year, the nominee will get Rs. 20,000. This amount would be paid every year till the end of the 24th year.
• 110% of Sum Assured - Rs. 2,20,000. At the end of the 25th year the nominee will get Rs. 2,20,000.
• Along with the Rs. 2,20,000 the Simple Reversionary Bonus which has accrued in the plan along with any Final Addition Bonus will also be paid to the nominee.

Maturity Benefit

Scenario 3 : If Nitesh survives till the end of the policy term of 25 years - Nitesh will get the  Sum Assured + Simple Reversionary Bonus + Final Addition Bonus as declared. 

Total Premiums Paid = Rs. 1,98,748

Sum Assured = Rs. 2,00,000

Let us assume that a Simple Reversionary Bonus of Rs. 49 per 1,000 Sum Assured. There is no guarantee that this will be the bonus rate for all years.

Simple Reversionary Bonus = 49 x 2,00,000 / 1,000 for 25 years = Rs. 2,45,000 

Again, let us assume a Final Addition Bonus of Rs.  

So Sumit will get Rs. 2,00,000 + Rs. 2,00,000 + Rs. 1,00,000 = Rs. 3,00,000

Check the Bonus rates of LIC Jeevan Lakshya Policy-833
 

Sample Premium Illustration of LIC Jeevan Lakshya Policy

Here are the sample tabular premium rates (inclusive of taxes) payable by a healthy, non-tobacco user male for different combinations of age, Sum Assured and policy term. We have gone with the current applicable tax rate of 4.5% for such policies.

Sum Assured : 1,00,000
Age : (30, 35, 40) Years
Policy Term : 25 Years

Eligibility Criteria for buying LIC Jeevan Lakshya Policy

Tax Implications in LIC Jeevan Lakshya Plan

• Premiums – The premiums paid for the plan are exempt from taxation under Section 80C of the Income Tax Act. 
• Maturity Claim – Maturity amount is exempted from tax under Sec 10(10D) of the Income Tax Act  
• Death Claim – Death claims received under the plan are free from taxation under Section 10(10D) of the Income Tax Act

Other Benefits in the LIC Jeevan Lakshya Policy

• Free-look Period – If the policyholder is not happy with the plan, he can cancel the policy within 15 days of the plan issuance. This period is called the free-look period. Upon cancellation, the premium paid net of any applicable expenses would be returned.
• 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 - You can avail a long against this policy after you have paid 3 years of premium.
• Riders  - You have the choice of taking the following rider by paying an extra premium amount:
  • LIC’s Accidental Death and Disability Benefit Rider
  • LIC’s New Term Assurance Rider
• Surrender Value - If you surrender the plan anytime before paying 3 years of premiums, you will not be paid anything back. In case you have paid at least 3 years premiums, the policy will acquire a Surrender Value. The exact surrender value factor can only be known by contacting the LIC office.

What happens if you stop paying your premiums in the Jeevan Lakshya Plan?

The policy will acquire a Paid-Up Value in case you stop paying future premiums after the grace period also. Paid-up Value of Jeevan Lakshya Plan will only be available if at least 3 years’ premiums have been paid.

• The plan will not have any additional bonus accruals
• The Death Benefit would be as following:
  • (No. of premiums paid / Total no. of premiums payable) x (110% of Basic Sum Assured + Accrued bonus).
  • 10% of Basic Sum Assured x (No. of premiums paid / Total no. of premiums payable) as an Annual Income Benefit from the next policy anniversary date to the policy anniversary date one year before the Maturity Date.
• The Maturity Benefit would be as follows:
  • (No. of premiums paid / Total no. of premiums payable) x (Basic Sum Assured + Accrued bonus).

If you have any questions on the LIC Jeevan Lakhsya Policy, drop in a line in the comments and we will be happy to help out.

INSURANCE ADVISOR:-

APURVA ANAND

CONTACT NO:-7761916949

GMAIL:-apurvaanand31@gmail.com