LIC Jeevan Labh Plan

Key Features of LIC Jeevan Labh

Benefits of LIC Jeevan Labh

Major benefits of LIC Jeevan Labh policy are as follows:

1. Maturity Benefit - On maturity of the policy, the policyholder will receive the Sum Assured on Maturity as a lump sum, which is equal to Basic Sum Assured plus vested Simple Reversionary Bonuses, and Final Additional Bonus, if any.
2. 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 ten times of annual premium paid or the Basic Sum Assured. The death benefit will not be lower than 105% of the overall premium amount paid as of the date of death.
3. 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.
4. Tax Benefits - Tax benefits are available as per relevant sections of the Income Tax Act, 1961.
5. Loans - Loans are available as per the table given in the 'Key Features' section above.
6. Rebate - In terms of premium frequency, 2% of annual premium and 1% of half-yearly premium payments are offered as rebates. Sum assured of Rs.2 lakh to Rs.4.9 lakh receive a rebate of 1.25% of Basic Sum Assured, Rs.10 lakh to Rs.14.9 lakh receive 1.50% and Rs.15 lakh and above receive 1.75%..
7. Surrender Value - The life insurance policy can be surrendered at any point of time in the policy term subject to payment of at least three consecutive years' premium. The Guaranteed Surrender Value will be equal to the total amount of premiums paid (minus any additional charges incurred such as underwriting decisions or rider premiums) multiplied by the Guaranteed Surrender Value Factor. The Guaranteed Surrender Value Factor at different points in the policy term are as follows:

Example of LIC Jeevan Labh Policy

Suppose Mr. Gupta opted for LIC's Jeevan Labh Plan with a tenure of 25 years, premium paying term of 16 years, yearly premium payment mode and Sum Assured of Rs.2 lakh. He is 35 years old and paying an annual premium a little over Rs.9,100.

At the end of 25 years on maturity, he will receive Rs.2.2 lakh which includes interest at 4% p.a. or Rs.3.7 lakh at 8% p.a. interest. In case of his unfortunate demise in the 22nd policy year, his nominees will receive a lump sum amount of Rs.2.17 lakh (4% interest) or Rs.3.41 lakh (8% interest) as a death benefit. The interest rates are subject to company policies. In either of the above cases, Mr. Gupta will be paying an overall amount of Rs.1.46 lakh as a premium in 16 years to avail a basic sum assured of Rs.2 lakh and other bonuses.

Optional Riders Available Under LIC Jeevan Labh

There are 5 riders that may be availed with this policy to increase coverage:

• LIC's Accidental Death and Disability Rider: This rider can be purchased on payment of an additional premium over the base policy premium. The rider is available for ages 18 years to 70 years (maturity). It offers an additional sum assured in case of accidental death during policy coverage. In case of disability, the Accident Benefit sum assured will be paid out in 10 equal instalments spread over 10 years.
• LIC's New Term Assurance Rider: This rider increases the cover in case of the death benefit. The rider can be opted for at the inception of the policy by paying an additional premium over the base policy's premium.
• LIC’s Accident Benefit Rider: A policyholder can purchase this rider at any time during the premium paying duration of the base plan if the base plan's outstanding premium paying period is at least five years. The benefits of this rider can be availed only during the premium paying period.
• LIC’s Premium Waiver Benefit Rider: This rider can be added at any point during the policy anniversary period but within the premium paying duration of the base plan if the base plan's and rider’s outstanding premium paying period is at least five years. When availing this rider, the insured must be a minor.
• LIC’s New Critical Illness Benefit Rider: This rider can be purchased only during the start of the policy. A critical illness sum assured will be paid to the policyholder if they are diagnosed with a critical illness listed in the base policy.

Documents Required for LIC Jeevan Labh Plan

The following documents are necessary to apply for LIC's Jeevan Labh plan:

1. Know Your Customer (KYC) documents like Aadhaar card, Permanent Account Number (PAN) card, etc.
2. Duly filled application form
3. Proof of address
4. Proof of age
5. Medical history
6. Report of medical diagnosis

What’s Not Covered Under LIC Jeevan Labh Plan

The LIC Jeevan Labh policy will deny any claim submitted in the event of the insured’s suicide.

1. If the insured commits suicide within one year of the policy's inception, the beneficiary receives 80% of the premiums that were paid to date.
2. If the insured commits suicide after one year from the date of policy revival, the higher of the acquired surrender value or 80% of the total premiums paid up to that point is provided.

Additional Key Information About LIC Jeevan Labh

Here are other important details about the LIC Jeevan Labh plan:

Grace Period: The insured is given a grace period of 15-30 days to settle any past due premiums.

Cooling Off Period: If the policyholder is not satisfied with the terms and condition of insurance plan after purchasing the insurance policy, they can cancel the policy within 15 days of receiving the policy document.

Policy Surrender: If the policyholder pays the premiums for at least two complete policy years, the Jeevan Labh Plan will have a surrender value. Policyholders will be offered the higher of the Special surrender value or the Guaranteed Surrender Value. It is determined by the total amount of premium paid, the year of surrender, and the length of the policy.

Free-look Period: If the policyholder is dissatisfied with the policy's terms and conditions, they have 15 days to terminate the insurance.

Paid-Up Value: If the policyholder stops paying premiums after doing so consistently for at least two years, the policy will earn a paid-up value. The sum guaranteed is then reduced in accordance with the premiums paid. The decreased paid-up sum assured is:

Number of premiums paid/total premiums due X sum assured on maturity or death