Understanding the LIC Jeevan Labh Policy: Benefits and Key Features
The LIC Jeevan Labh policy is a renowned product offered by the Life Insurance Corporation of India (LIC). Tailored to ensure both protection and savings, it is a popular choice among individuals seeking a comprehensive financial security solution. This article delves into the key features, eligibility criteria, and the benefits encapsulated within the Jeevan Labh policy.
Key Features of the LIC Jeevan Labh Policy
The LIC Jeevan Labh policy stands out for its unique design, offering a versatile range of benefits that make it advantageous for various life stages.
Limited Premium Payment
One of the most appealing features of the Jeevan Labh policy is its limited premium payment option. Policyholders can choose to pay premiums for a specific period, typically 10, 12, or 16 years. Post this period, the policy continues to offer coverage for a longer duration, ensuring continuous financial security.
Maturity Benefit
The policyholder can receive the sum assured, along with vested bonuses, upon surviving until the end of the policy term. This provides a substantial financial cushion for future needs or emergencies.
Death Benefit
In the unfortunate event of the policyholder's demise during the policy term, the nominee receives the sum assured along with any bonuses accumulated. This serves as a financial safety net for dependents.
Policy Term
The policy offers a flexible range of terms, typically ranging from 10 to 25 years. This customization allows individuals to choose a term that aligns with their financial goals and life stage.
Annual, Semi-Annual, Quarterly, and Monthly Premium Payment Modes
Flexibility in premium payment is a key aspect of the Jeevan Labh policy. Premiums can be paid annually, semi-annually, quarterly, or monthly, catering to various financial commitments and individual needs.
Participating in Profit (Bonus Facility)
The Jeevan Labh policy allows participants to share in the profitability of the Life Insurance Corporation of India. This means the policy may earn bonuses based on the company's performance, further enhancing the financial benefits.
Loan Facility
After a certain period, policyholders can access a loan facility using their policy as collateral. This utility can be beneficial during financial distress or emergencies.
Tax Benefits
A significant benefit of the Jeevan Labh policy is the tax advantage offered. Premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act, and the maturity benefit is exempt from tax under Section 1010D.
LIC Jeevan Labh Eligibility
The LIC Jeevan Labh policy has specific eligibility criteria that policyholders must meet to avail themselves of its benefits.
Age Eligibility
Minimum Age: The minimum age for entry into the Jeevan Labh policy is 8 years. Maximum Age: The maximum age varies based on the policy term, ranging from 54 to 59 years.Sum Assured
Minimum Sum Assured: The minimum sum assured is typically Rs. 2 Lakhs. No Upper Limit: There is no upper limit to the maximum sum assured.How the Plan Works
For a better understanding, let's consider a hypothetical scenario where a 30-year-old individual wishes to take out the Jeevan Labh policy for a 21-year term.
Lifetime Premium Calculation
In this case, the sum assured would be Rs. 10 Lakhs, and the term would be 21 years. The premium payment period can be calculated as 21 - 6 15 years, as the first 6 years are a grace period.
For the first year: The premium amount would be approximately Rs. 56,013 with a tax rate of 4.5%. Starting from the second year, the premium would be calculated with a tax rate of 2.25%. The premium amount for each of the remaining 14 years would be approximately Rs. 54,807.
Maturity Benefit
If the insured person survives the entire policy term, they will receive the sum assured, Rs. 10 Lakhs, plus vested bonuses, which in this example, are Rs. 924,000. Additionally, they can receive a Final Additional Bonus (FAB) of Rs. 100,000. The total received at maturity would be Rs. 20,24,000.
Note: The policyholder has the option to receive the maturity amount in a lump sum or in installments. If opting for installments, they must inform LIC three months in advance.
Death Benefit
In the unfortunate event of the policyholder's death during the policy term, the nominee will receive the sum assured of Rs. 10 Lakhs in addition to the vested bonuses, assuming the policy was in force for 5 years of premiums. If accidental death occurs, the claim amount includes both the sum assured and the bonus, with the policyholder required to pay additional premium for the accidental benefit.
Conclusion
The LIC Jeevan Labh policy is an attractive option for individuals seeking a combination of life insurance and savings. It provides the family with vital financial security in case of untimely demise and helps accumulate assets for future needs. Before purchasing, it is recommended to review the terms, benefits, and conditions carefully to ensure alignment with one's financial goals.