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Life Insurance Corporation of India (LIC) is the leading provider of insurance services in India. Headquartered in Mumbai, it is the largest provider of insurances in India. The Life Insurance Corporation of India is State-owned and commands a monopoly in the life insurance market, contributing a significant share to the GDP of India.
The Jeevan Shagun Plan was launched in September 2014 and was available for sale for a period of 90 months, till 29th November 2014. For those who signed up for this policy upon release, the specifics of the plan have been laid out, so you can fulfill any present service requirement. For new buyers looking to buy a similar LIC one time investment plan, you will find comparisons with other plans currently offered by LIC
You can opt for flexible benefit limit
You get to choose flexible premium payment modes
You can avail no claim benefit
You shall receive the decided Assured Maturity Sum based on which, along with your age and health, the initial premium you paid was determined.Jeevan Shagun is a single premium plan. No further payments are required to be made by existing policy holders.
Nominees shall receive the Death Benefit upon filing death claim, which is the entirety of the Assured Sum. The nominee will also receive added Loyalty Additions after policy year starting in 2019.
The term of the plan being 12 years, all Jeevan Shagun plans will reach Maturity between September and end of November 2026.Between the same months mentioned, policyholders can expect to receive from the insurance company, the following survival benefits in the year:
2024 – 15% of Maturity Sum Assured
2025 – 20% of Maturity Sum Assured
2026 – 65% of Maturity Sum Assured, along with any loyalty additionsLoyalty Additions
Policyholders will enjoy the benefit of receiving bonuses from the corporation depending on rates declared by LIC. The rates will be declared from September 2019 onwards, i.e., five years from the commencement of the plan. These bonuses will be accumulated in your plan and payable at the time of death, maturity or surrender beyond the fifth year of the policy. Bonus rates depend on the term of the plan in question and the performance of the corporation - Jeevan Shagun having a term of twelve years, you can expect rates anywhere from ₹30 to ₹45 per ₹1000 of Maturity Sum.Surrender
If you surrender the policy now or anytime in the future, you will receive 90% of the premium you paid, excluding extra premiums and taxes paid. This is the Surrender Value upon which your policy loans will be based. Loyalty additions will be based on Surrender Value and not Assured Sum, beyond policy year commencing in 2019.
A loan can be availed from LIC by policyholders upon production of a title deemed satisfactory by the corporation. The interest on the loan shall be compounded on a half-yearly basis, at a rate specified by the corporation when it is issued. The first payment of interest is to be made on whichever date follows the date of issue - either six months before the date of next policy anniversary or next policy anniversary. You can avail the following loan amounts, shown here as a percentage of your surrender value, for policy year commencing in the year of:
2016 – 50% (present)
2017 – 60%
2020 – 70%
2023 to 2025 – 90%
The corporation can deduct the outstanding payments for the loan, including interest, from your policy funds.
Upon the death of the life assured, be sure send the claim intimation to the insurance company as quickly as possible. This can be done by the nominee, a close relative, the agent handling the policy.
The company requires certain pieces of information to be enclosed in the death claim such as proof of death (death certificate), history of medical treatment received prior to death, a certificate from employer or institution of study.
Documents required for making a death claim are :
Filled Claim Form
NEFT mandate for directly crediting claim amount to bank account
In order to make a maturity claim, claim for survival benefits or surrender, you the policy holder need to send in discharge form along with original policy document and NEFT mandate from the bank.
The discharge voucher or claim receipt needs to be signed by you and witnessed before you send it in.
The basic features of the Jeevan Shagun plan are –
Participating: The insurance company pays the policyholder annual dividends
Single Premium: The policy buyer needs only to make a single payment as premium, and his or her life is insured for the specified time period.
Non-linked: It is a traditional plan providing risk cover, as opposed to unit-linked insurance plans (ULIPs), which have a higher rate of exposure to the equity markets, depending on the risk profile chosen by the customer.
Savings cum protection: The policy buyer deposits a lump sum to the insurance company as premium, and his nominees receive the assured amount in case of death of policy holder during the term. The policyholder receives his assured amount along with dividends at the end of the term upon survival – thus the plan doubles as a protection and a savings scheme
Money Back Plan: The insurance company pays the policyholder annual dividendsThe payouts received in the 10th and 11th year of policy in case of survival, make this plan qualify as a Money Back Plan. These payouts, called Survival Benefits, aim to liquidate some of the financial assets from the plan for use by the Policyholder
The Policy Document for is easily available on the LIC’s website LicIndia.in, along with Jeevan Shagun policy details in Hindi.
Pay once and forget about it: The plan being in effect and requiring only a single payment at the time of issue saves you the hassle of paying monthly and yearly premiums. If you have a bit of extra money and are wary of investing in the equity markets, then plans like these are a good option to consider.
Option to liquidate your insurance assets: In case you are in need of liquid funds at any point during the term beyond a year of buying the policy, LIC offers you options for withdrawing funds as a loan, with the amount available to you depending on how many years the policy has run.
Tax-free returns: The Jeevan Shagun plan serves the dual purpose of providing protection to the policyholder and performing the role of a savings account. On average, this plan provides returns of around 8%. The only downside being the long plan term.
Money Back Policies provide the combined upper hand of periodic payouts for meeting financial commitments while also providing a guaranteed return on their investments, not mentioning the compulsory security desired of a life insurance plan. The Policyholder does not have to wait till the maturity of the plan to start enjoying the profits accrued by his investment. As a result, these are very popular in India.
Some of the best money back policies available right now are:
LIC Money Back Policy – 20 years
LIC Money Back Policy for Children – 25 years
SBI Life Smart Money Back Gold – 12, 15, 20, 25 years
HDFC Life Super Income Plan – 16 to 27 years
Bajaj Allianz Cash Assure – 16, 20, 24, 28 years
The benefits stated above may seem appealing to you right away. Indeed, having to pay a premium only once can be very convenient, but before jumping to a decision, consider the limitations of single premium policies:
You can only avail the tax exemption of ₹1.5 lakhs under section 80c once in a single insurance plan, i.e. in the first year of the policy. Whereas paying an annual premium allows you to claim tax benefits every year upon payment
The extra amount you have to pay for a single premium plan becomes unavailable to you. This can be a downside if you have other investment opportunities available to you with better returns.
Over time, the value of each rupee relatively depreciates due to inflation. For example, assuming an average inflation rate of 6%, the worth of ₹1 lakh now stands to be 1.8 lakhs ten years later. If you pay the premium on a yearly basis, you actually end up with more bang for your buck.Comparison with other life insurance plans offered by LIC
|LIC Jeevan Rakshak (No. 827)||LIC Jeevan Labh (No. 836)||LIC New Bima Bachat (No. 816)||LIC Jeevan Shagun (No. 826)|
|Frequency of Premium payments||Monthly, quarterly, semi-annually, annually||Monthly, quarterly, semi-annually, annually||Single payment||Single payment|
|Type of Plan||Endowment||Endowment||Money Back Policy||Money Back Policy|
|Minimum Sum Assured||75,000||2,00,000||35,000 (9 yr. Term), 50,000 (12 Yr. Term), 70,000 (15 yr. Term)||60,000|
|Maximum Sum Assured||2,00,000||No Limit||No Limit||No Limit|
|Premium Paying Term||Equal to Policy Term||10, 15, 16 years respectively||Commencement of Policy||Commencement of Policy|
|Policy term||10 to 20 years||16, 21, 25 years respectively||9, 12 and 15 years||12 years|