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From the many efficient plans of LIC, Jeevan Shikhar Plan stands out in terms of benefits and simplicity of terms. The endowment plan was initially launched as a close-ended plan which was only available 120 days after the release date, but the terms are revised now. The programs offer you a great cover provided you are ready to take the associated risk, which is 10 times of the usual tabular single premium.
The plan can be termed as saving cum protection single premium plan which is non-linked and participating. The person availing the plan is offered a choice to choose the desired maturity sum assured, the premium thus varies and depends on the maturity sum assured chosen. However, there is a minimum amount cap that is Rs. 100,00.
Any person between the ages of 6-45 can avail this program. The program has provision for liquidity and the insured person can avail a loan on the deposit. The term period of the plan would be 15 years the maturity sum assured will be in the form of multiples of Rs. 20,000.
The plan has a lock-in period of 15 years, after which an insured person is liable to receive the maturity sum assured along with any loyalty additions. The loyalty is, however, provided as per the applicability. In case of any mishappening that causes the death of the insured person before the date of commencement of risks, LIC is bound to refund the single premium without any interest. Any extra amount that is included in the policy under taxes or due to underwriting decisions is not refunded.
However, if the death happens after the date of commencement of risk, the sum assured that is payable at any such circumstances equals to 10 times to the tabular value of the premium. Individuals, those are age 8 years or above at the time of policy the risk period begins right from the date of issuance of Policy. In case the insured person is under 8 years, the risk will start on the first anniversary or as soon as the person attains 8 years, whatever comes earlier.
|Tabular Single Premium Rates||Age at Entry|
The Policy is considered as one of the most lucrative policies offered by LIC. It has great monetary benefit to offer at maturity as well as on the death of the insured person.
If a person successfully completes the maturity term, he/she earns the maturity sum insured paired with any loyalty, as applicable.
There are two conditions that decide the death benefit under LIC Jeevan Shikhar Plan.
If a person dies during the first five years of the policy:
● Before the commencement of date of risk: single premium value without any interest is refunded.
● After the commencement of date of risk: 10 times of the tabular value of the single premium is paid as sum assured.
If a person dies after a completion of first five years but before the date of maturity:
● Sum assured payable at the death is equal to 10 times the tabular single premium. This might include loyalty addition in case applicable.
The loyalty addition depends upon the corporate experience. The policy would participate in corporate profits in the form of Loyalty addition. This loyalty addition is payable at the time of death or surrender. The only pre-requisite for this is that the policy must have run at least 5 years or a person had survived the policy term. The rate of loyalty addition is however decided ^ declared by the Corporation.
A rebate in premium is also offered under this plan. The calculation of the same is made on per Rs. 1000 maturity assured amount.
For maturity assured amount between Rs. 2 lakh –Rs. 4.8 Lakh, the rebate amount is Rs. 15
For maturity assured amount between Rs. 5 lakh –Rs. 9.8 Lakh, the rebate amount is Rs. 20
For maturity assured amount of Rs. 10 lakh and above, the rebate amount is Rs. 25
The loan facility is another great benefit offered under the LIC Jeevan Shikhar Plan. An individual can avail a loan on the plan after completing 3 months from the date of issuance or when the free look period expires, whichever occurs later. The loan is thus granted as a percentage of the surrender value depending on the age at the time of entry. Here is the table with all details of loan facility:
|Max. Loan Amount as a % of surrender value for age at entry >35 years.||Max. Loan amount as a % of surrender value for age at entry <=35||Policy Year|
|35%||55%||3 months to 3rd|
|50%||65%||4th to 6th|
|70%||75%||7th to 9th|
|80%||80%||10th to 12th|
|85%||85%||13th to 5th|
Some conditions and restrictions under the Jeevan Shikhar Plan:
|Minimum: 6 years completed||Entry Age|
|Maximum: 45 years|
|Rupees 100,000/-||Minimum Maturity Sum Assured|
|No limit prescribed||Maximum Maturity Sum Assured|
|15 years||Policy Term|
|Single Premium||Premium Payment Mode|
|In multiple of Rs. 20,000/-||Maturity Sum Assured payment mode|
● Policy surrendered in the first year: 70% amount of the single premium is paid.
● Policy surrender after the first year but before maturity: 90% of the single premium
Summary of LIC Jeevan Shikhar Plan:
● The high cover value in case of death
● Multiple options to choose Maturity Sum Assured (MSA).
● Guaranteed sum along with loyalty addition as per the applicability.
● Option to surrender anytime with a higher surrender value.
● Tax rebate under section 80 (C) of Income Tax Act.
● The maturity amount is tax-free under Maximum Loan Amount as a % of surrender value for age at entry >35 years
The policy is declared as a sensibly fit policy to avail. The benefits are justified and offer great benefits. The main USP of the policy is that it is a single premium based policy.