LIC Jeevan Labh is one of the effective life insurance plans offered by the Life Insurance Corporation of India. It is a limited premium paying, non-linked (Not dependent on equity-based funds and money/share market) with-profits endowment plan that comes out with various benefits to serve its clients.
It offers a combination of protection and savings that means you will stay protected and will be able to save your money efficiently. It also provides financial support to the family the needful in case of insured’s miserable demise. People from the age group of 8-59 years can take advantage of this plan.
It is a basic endowment plan where you need to pay premiums for a limited time and at the end of the policy term, you will get the Maturity Benefits. In case of death of the policyholder anytime during the policy term, the nominee will get the Death Benefit in the form of Sum Assured and bonuses.
|Plan Type||Non-linked endowment plan with limited premium paying term|
|Policy Coverage||Maturity Benefit, Death Benefit, Simple Reversionary Bonus and Final (Additional) Bonus (if any)|
|Policy Term||16 years (10 years PPT)|
21 years (15 years PPT)
25 years (16 years PPT)
|Premium Paying Term (PPT)||10 years |
|Loan||Loans can be availed against this policy. Loans are available provided if at least 3 full years’ premiums have been paid and the policy has acquired a Surrender Value.|
|Free-look Period||15 days from the date of receiving policy documents. Premium amount already deposited will be returned after deducting proportional risk premium for the cover period, medical examination expenses, reports, stamp duty, etc.|
|Nominations||Nomination facility provided as per the Insurance Act|
|Basic Sum Assured||Minimum - Rs.2 lakh |
Maximum - No limit
Basic Sum Assured (Multiples of Rs. 10,000 only)
|Premium Payment Frequency||Yearly,Half-yearlyQuarterly,Monthly (payment only through ECS mode), SSS (salary savings scheme) mode|
|Revival||Policy can be revived any time within 2 years from the date of first unpaid premium by paying all the premium arrears along with interest and other expenses|
The LIC Jeevan Labh Plan offers a host of benefits as mentioned below:
Death benefit: In case of death of the insured, the nominee will be liable to get the following benefits:
Sum Assured (not be less than 105% of all premiums paid).
Any Simple Revolutionary Bonuses (which is the higher of 10 times the annualized premium, or Basic Sum Assured).
Final additional bonuses if any, shall be paid off to the nominee.
Maturity benefit: When the policyholder survives the policy period, the insured will get the following benefits:
Sum Assured on maturity.
Any Simple Revolutionary Bonuses (declared based on the experience of LIC).
Final additional bonuses (if any).
Rebate: LIC is popular to serve several perks to its customers in the form of rebates.
Yearly mode: 2% of table premium.
Half-yearly mode: 1% of table premium.
Rs. 5 lakhs to Rs. 9.9 lakhs: 1.25% of Basic Sum Assured per Rs. 10,000 of Basic Sum Assured will be provided.
Rs. 5 lakhs to Rs. 9.95 lakhs: 1.50% of Basic Sum Assured per Rs. 10,000 of Basic Sum Assured will be provided.
Rs. 15 lakhs and above: 1.75% of Basic Sum Assured per Rs. 10,000 of Basic Sum Assured will be provided.
Loans: LIC Jeevan Labh Plan comes along with the loan facility.
A loan can be taken against the policy if the premiums for the policy have been paid regularly for the first 3 full years.
For in-force policies, the maximum loan that can be availed is 90% of the surrender value.
For paid-up policies, the maximum loan that can be availed is 80% of the surrender value.
Interest rate for the loan will be decided on a case by case basis by LIC.
In the case where the policy is in-force, a simple revolutionary bonus will be provided to the insured. This is because the policy is a participating policy. Additional Bonus may also be declared under the policy in the year when the policy results into a claim either by death or maturity.
This policy is an ideal plan if one wishes to plan for their child’s education or marriage.
Income Tax Benefit
The premiums paid are not eligible from income tax under the Section 80C of the Income Tax Act, 1961. Also, the maturity amount is also tax-free under Section 10 (10D).
Life Cover (Death Claim)
In the event of death at the time of the policy term, the Death Claim will be Basic Sum Assured+Accumulated Simple Revisionary Bonus+Final Addition Bonus, only if all the pending premiums till the date of death are paid when the policy is in-force. Year-wise declared bonus for Jeevan Labh is given below:
|New Jeevan Labh Bonus Details (per 1000 of Sum Assured)|
|Policy Year||16 Years Term||21 Years Term||25 Years Term|
|Sum Assured||Rs. 2 lakhs||No Limit|
|Policy Term (in years)||16, 21, 25|
|Premium Paying Term (PPT in years)||10 for 16 years of policy term |
15 for 21 years of policy term
16 for 25 years of policy term
|Age at Entry||8 years (completed)||59 years for policy term 16 years |
54 years for policy term 21 years
50 years for policy term 25 years
|Maximum Maturity Age||75 years|
|Premium Paying Frequency||Annually, Half-yearly, Quarterly, Monthly|
When you invest in LIC Jeevan Labh Plan, the customer has to decide on the following:
Sum Assured (amount of the cover that you want).
Policy Term (the time period during which you wish to have the cover).
The premium paying period will be decided automatically on the basis of the policy tenure as follows:
On choosing a policy tenure of 16 years, premium payment will be for 10 years.
On choosing a policy tenure of 21 years, premium payment will be for 15 years.
On choosing a policy tenure of 25 years, premium payment will be for 16 years.
Your annual premium for the plan will depend upon the above 2 factors including the age in which you have applied the policy.
As it is a participating plan, the person will be liable for the following points throughout the policy term:
Simple Reversionary Bonus
Final Addition Bonus
These values are not guaranteed and the person shall only know this when they shall be stated by LIC.
LIC's Accidental Death and Disability Rider
In case where the insured suffers from an accident at the time of the policy period the additional Sum Assured will be paid to the nominee.
But in cases where the insured suffers from any kind of disability then the accidental Sum Assured will be paid to the nominee in 10 equal payments over 10 years. You can get this rider by paying an additional premium.
Minimum: 18 years.
Maximum: 65 years.
Cover will terminate at the age of 70.
Minimum accident benefit Sum Assured: Rs. 10,000.
Maximum accident benefit Sum Assured is the Basic Sum Assured (subject to a ceiling of Rs. 100 lakhs).
The benefit will be paid in multiples of Rs. 10,000 only.
LIC's New Term Assurance Rider
In the event of death, the death benefit increases with this rider. You can opt this rider at the time of the policy purchase by paying an extra premium.
Minimum: 18 years.
59 years for a 16 year policy term.
54 years for a 21 year policy term.
50 years for a 25 year policy term.
Policy term will be the same as the base plan.
Premium paying term will be the same as the base plan.
Minimum Sum Assured under this rider: Rs. 1 lakh.
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. The current applicable tax rate is 4.5%.
Sum Assured: Rs. 2 lakhs
Policy Term: 16, 21, 25 (in years)
Premium Paying Term: 10, 15, 16 (in years)
Age: 20, 30, 40 (in years)
|Age||20 Years||30 Years||40 Years|
|Annual Premium||Rs. 17450||Rs. 17,512||Rs. 17,779|
|Annual Premium||Rs. 11,163||Rs. 11,255||Rs. 11634|
|Annual Premium||Rs. 9411||Rs. 9545||Rs. 10,015|
LIC Jeevan Labh policy allows you to surrender the plan at any time subject to payment of at least 3 consecutive years’ premium. The Guaranteed Surrender Value amount would 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:
|Guaranteed Surrender Value Factor|
|Policy Year||PPT 16 years||PPT 21 years||PPT 25 years|
Well, there may be some situations when the policyholder will not be happy with the plan. In such a scenario, he has permission to cancel the policy within 15 days of the plan issuance. This period is called the free-look period. On cancellation, the premium paid net of any applicable expenses would be returned.
On completion of at least 3 years with all the pending premiums paid and policyholder selects to cease the premiums, it will automatically eligible for paid-up option. In the event of paid-up, advantages of the policy (Maturity and Death claims) comes down by a factor of Total number of premiums paid/Total number of premium to be paid.
If the policyholder is not satisfied with the Terms & conditions or any clause of the policy, he/she can cancel the policy within 15 days from receipt of policy document(s). On cooling-off request, the company/bank will refund the paid premium after deduction of proportionate premium, clerical charges, etc.
In case you miss the due date to make the premium payment LIC offers you a grace period of 30 days from the premium due date for Yearly, Half-yearly, and Quarterly premium payment mode. In the case of monthly premium payment mode, the grace period is of 15 days.
Suicide: If the insured person commits suicide within one year of the policy tenure, then the insurance company shall not be responsible to provide any Sum Assured to the nominee(s). But in cases of suicide beyond one year of the policy tenure, 80% of the premiums without any interest will be payable to the nominee(s).
GST (Goods and Services Tax) of 18% is applicable on life insurance policies. This tax is authorized by the government of India and is effective from 1st of July, 2017. It is applicable on the entire premium paid by the policyholder. One can take the benefit only in the case of insurance companies enabling the input tax credit benefit.
In such a scenario, your policy will lapse and you would not be able to take advantage further. But within two consecutive years, you will have the option of renewing the same. For that, you have to pay for all your unpaid premiums. Remember, LIC compounds interests semi-annually.
Yes, you will be eligible for surrender value benefits of the plan as discussed above only if you have paid timely premiums for three full years and have completed three years of the policy.
Yes, your policy will get canceled. However, it will continue as a paid-up policy and the maturity along with the death benefits, will be reduced accordingly.
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Last updated on 13-11-2019