The LIC Jeevan Labh plan is a non-linked, traditional with-profits policy that provides both investment and insurance benefits. By paying premiums for a limited period of time, you will receive Maturity Benefits at the end of the policy term. If the policyholder dies during the policy term, the nominee will receive the Death Benefit.
This policy is a limited premium payment plan, meaning that you do not have to pay premiums for the entire duration of the policy term. To illustrate the benefits of the plan, let us consider an example.
To understand how the LIC Jeevan Labh Policy works, customers must make decisions regarding two key aspects:
– The Sum Assured, which is the desired coverage amount.
– The Policy Term, which is the length of time that the policyholder wishes to have coverage.
Based on the chosen Policy Term, the premium payment term is automatically determined.
Plan Benefits
Death Benefit : Under the LIC Jeevan Labh Plan, the Death Benefit is payable to the nominee in the event of the policyholder’s death during the policy term. The Death Benefit is calculated as the sum of the following components:
Sum Assured
Simple Reversionary Bonus declared to date
Final Addition Bonus, if it has been declared during that year.
Maturity Benefits : Upon the completion of the policy term, the policyholder is entitled to receive the Maturity Benefit under the LIC Jeevan Labh Plan. The Maturity Benefit includes the following:
Sum Assured
Simple Reversionary Bonus declared at the end of each year
Final Addition Bonus, if declared during that year.
Tax Benefits : Premium payments made towards the LIC Jeevan Labh Plan are eligible for tax exemption under Section 80C of the Income Tax Act. Additionally, the Maturity Claim is also exempt from tax under Section 10(10D) of the same Act. In case of a Death Claim, the benefits received under the policy are exempt from taxation under Section 10(10D) of the Income Tax Act.
The LIC Jeevan Labh Plan provides certain additional benefits to the policyholder. These include:
Free-Look Period: If the policyholder is not satisfied with the plan, he/she can cancel the policy within 15 days of issuance, which is called the free-look period. The premium paid net of applicable expenses will be refunded upon cancellation.
Grace Period: A grace period of 30 days is provided for Yearly, Half-yearly, and Quarterly premium payment modes, while it is 15 days for monthly payment mode.
Loan Facility: The policyholder can avail a loan against lic jeevan labh policy after paying the premiums for at least 2 years.
Riders: The policyholder has the option to choose additional riders by paying extra premium. These include LIC’s Accidental Death and Disability Benefit Rider and LIC’s New Term Assurance Rider.
Surrender Value: If the policy is surrendered before paying 2 years of premiums, no amount will be refunded. However, if the premiums have been paid for at least 2 years, the policy will acquire a Surrender Value. The bonus earned under the policy also has a surrender value. The Surrender Value Calculations in the LIC Jeevan Labh Plan can be understood by clicking here.
How to buy ?
You can also visit your nearest LIC branch and meet with an LIC agent to help you with the process of buying the policy. They will guide you through the process and help you choose the best plan as per your requirements.
Eligibility Criteria :
| Minimum | Maximum | |
| Sum Assured | Rs. 2,00,000 | No Limit |
| Policy Term(in years) | 16,21,25 years | |
| Premium Paying Term(in years) | 10 years for 16 years policy Term 15 years for 21 years policy term 16 years for 25 years policy term | |
| Age at Entry | 8 years completed | 59 years for 16 years policy term 54 years for 21 years policy term 50 years for 25 years policy term |
| Maximum Maturity Age | 75 years | |
| Premium Paying Frequency (Modes) | Annually, Half-yearly, Quarterly, Monthly |
Let us understand the LIC Jeevan Labh Plan better with the help of an example
Santosh Prasad, aged 35, has decided to purchase the plan and has opted for the following :
Sum Assured – Rs. 4,00,000
Term – 25 years. With a term of 25 years, the premium payment term will be determined accordingly.
Premium Payment Term – 16 years
Assuming a current tax rate of 4.5%, Santosh Prasad’s annual premium for the plan is Rs. 18581 + Taxes, which amounts to Rs. 19417.
Death Benefit
Scenario 1 : If Mr Santosh dies after 3 policy years – The nominee would get the Sum Assured + Simple Reversionary Bonus + Final Addition Bonus.
Total Premiums Paid = Rs 58,251
Sum Assured = Rs. 4,00,000
Simple Reversionary Bonus: Assuming an annual declaration of Rs. 40 per 1,000 Sum Assured for 3 years, the Simple Reversionary Bonus for Santosh Prasad’s policy is Rs. 48,000 (Rs. 40 x 400 x 3). It is important to note that this is an estimate and the actual bonus may be different from this, depending on the performance of the insurance company.
There is no Final Addition Bonus declared. Generally, Final Addition Bonus is declared after a longer premium payment term.
The nominee will receive a death benefit of Rs. 4,00,000 plus any applicable bonuses such as the Simple Reversionary Bonus. In this case, as per the given information, the Simple Reversionary Bonus of lic jeevan labh is Rs. 48,000. Therefore, the nominee will receive Rs. 4,48,000.
Scenario 2: In the event of Santosh’s demise after 15 policy years, the nominee will receive the Sum Assured along with the Simple Reversionary Bonus and Final Addition Bonus.
Total Premiums Paid = Rs 2,91,255
Sum Assured = Rs. 4,00,000
Simple Reversionary Bonus: Assuming an annual declaration of Rs. 40 per 1,000 Sum Assured over 15 years, the Simple Reversionary Bonus would amount to Rs. 2,40,000 (Rs. 40 x 400 x 15). However, it is important to note that this is merely an estimation and the actual bonus declared may vary, either higher or lower than this amount.
Final Addition Bonus : A one-time Final Addition Bonus of Rs. 20 per 1,000 Sum Assured would result in a total bonus of Rs. 8,000 (Rs. 20 x 400). It is important to note, however, that this amount is based on an assumption and the actual Final Addition Bonus declared may be higher or lower than this.
Yes, if Santosh passes away after 15 policy years, his nominee would receive a total of Rs. 6,48,000, which includes the Sum Assured of Rs. 4,00,000, Simple Reversionary Bonus of Rs. 2,40,000 and Final Addition Bonus of Rs. 8,000.
Maturity Benefit
Scenario 3 : If Mr. Santosh Prasad survives until the end of the policy term, which is 25 years, he will receive the Sum Assured along with the Simple Reversionary Bonus and Final Addition Bonus.
Total Premiums Paid = Rs. 3,10,672
Sum Assured = Rs. 4,00,000
Simple Reversionary Bonus = Assuming an annual declaration of Rs. 47 per 1,000 Sum Assured over 25 years, the Simple Reversionary Bonus would amount to Rs. 4,70,000 (Rs. 47 x 400 x 25). However, it is important to note that this is merely an estimation and the actual bonus declared may vary, either higher or lower than this amount.
Final Addition Bonus – A one-time Final Addition Bonus of Rs. 450 per 1,000 Sum Assured would result in a total bonus of Rs. 180,000 (Rs. 450 x 200). It is important to note, however, that this amount is based on an assumption and the actual Final Addition Bonus declared may be higher or lower than this.
Yes, if Mr. Santosh Prasad survives until the end of the jeevan labh policy term, he will receive a total of Rs. 10,50,000 as maturity benefit, which includes the Sum Assured of Rs. 4,00,000, Simple Reversionary Bonus of Rs. 4,70,000 and Final Addition Bonus of Rs. 1,80,000.
