LIC Jeevan Labh Insurance policy is the new insurance policy from LIC. It is an endowment insurance policy. The policy is a mix of investment and insurance. This policy has fixed tenure feature. One can take this policy only for 16, 21, and 25 years. The premium paying term of this policy is at least 6 years less than the policy period.
|Premium Payment Duration||Policy Duration|
The Jeevan Labh policy gives some other optional benefit as well. You can take accident death benefit, disability benefit and term assurance rider along with it.
LIC Jeevan Labh Features
The new endowment insurance policy of LIC is saving cum insurance plan. It gives the facility to opt some useful riders as well. However, this plan has some limitations as well.
The LIC Jeevan Labh gives minimum life insurance cover. It is minimum 10 times of the annual premium.
Age For insurance Cover
A small child or a senior citizen can have the insurance cover of the LIC Jeevan Labh. The insurance cover of LIC Jeevan Labh starts from the age of 8. It is available up to the age of 75. However, do a child require insurance cover at such a small age?
Tenure of Insurance Cover
The LIC Jeevan Labh has the special feature of lower premium paying term than the policy term. But the higher policy cover of LIC Jeevan Labh is also short of our needs.
The tenure of LIC Jeevan Labh insurance cover is from 16 years to 25 years. While the lower limit should not be an issue, the higher limit is a matter of concern. A 30-year-old would have this insurance cover only till the age of 55. While, one should have insurance cover at least till the age of 60.
Premium For Insurance Cover
From the structure of LIC Jeevan Labh it is very evident that a very small sum is allocated for the life cover. The policy does not tell separate amount for the life cover.
LIC Jeevan Labh as a Saving Plan
Like any other endowment plan, the LIC Jeevan Labh is also promoted and designed as a saving product.
The saving element of Jeevan Labh is dominant in this plan. Most of your premium goes for the saving part. Since the premium paying tenure is less than the Policy term, the premium is relatively very high. For the sum assured of Rs 20 lakh after 21 years, you (age-30) have to pay Rs 1.04 lakh/ per year for 16 years.
The premium of this policy can be paid yearly, half-yearly, quarterly and monthly. There is 2% discount for the yearly payment.
Sample Tabular Premium of Jeevan Labh Policy
|Policy Term/Premium Paying Term (in Years)|
|16 (10)||21 (15)||25 (16)|
Jeevan Labh Plan For 30 Year Old
Jeevan Labh Plan For 40 Year Old
Jeevan Labh Plan For 50 Year Old
Since, Jeevan Labh is is mainly a saving plan, you must focus on the return. Unfortunately, the return from LIC Jeevan Labh is not lucrative. A Recurring Deposit would definitely give the better return than the LIC Jeevan Labh. Although, LIC endowment Plans give the bonuses but it is not guaranteed. The return of guaranteed maturity value is less than half of the Public provident fund or Tax-free bond.
Also Read: LIC Bima Diamond Plan Features
There is too much emphasis on Tax-free return. Like all the insurance plan, LIC Jeevan Labh also gives tax benefit under section 80C. The maturity amount is also tax free.
However, we should keep in mind that insurance policies are subject to service tax. Currently, it is 3.5% on insurance policies.
Riders With Jeevan Labh
There are three riders available with Jeevan Labh. These are accident death benefit, disability benefit and new term assurance. Among these three the first two are clubbed. You have to take them together. To avail a rider benefit, you have to give extra premium.
Recommended: 5 Best Life Insurance Riders For You
Accidental Death Benefit & Disability Benefit
The first rider is the Accidental death and disability benefit. The accident death benefit rider gives double of the sum assured if a person dies because of the accident. However, the accidental death benefit rider has an upper limit of Rs 1 crore.
The disability rider gives sum assured in case the policyholder gets permanently disabled within 180 days of the accident. The sum assured is given in monthly installment till the 10 years.
The accidental death benefit and disability riders are clubbed together. You can take it any year but before the 5 years of policy paying tenure. If you have to pay policy for 10 years, you should opt for this rider till the fifth year.
The coverage of this rider is applicable till the policy term.
Term Plan Rider
The LIC Jeevan Labh has tried to reply the criticism of underinsurance. To achieve the goal of adequate insurance coverage, the Jeevan Labh gives the rider of term insurance. By adding this rider, you can increase the death benefit. This rider is available only if your current sum assured is less than Rs 25 lakh. You have to opt this rider at the beginning of the policy. The minimum sum assured of this rider should be Rs 1 lakh.
Also Read: Best Online Term Insurance Plan in India
Important Term and Conditions of LIC Jeevan Labh
Free Look Up Period
You can return policy within 15 days of getting policy documents. This free look up period is mandated by the insurance regulator IRDAI. You have to state the reason of return in a separate letter. The LIC would cancel the policy after getting back the policy. You would get back the premium amount. The LIC would deduct a small amount of life insurance coverage during 15 days.
A grace period of one month is allowed for payment of yearly, half-yearly, quarterly mode and 15 days for the monthly mode of premium payment.
Yearly mode 2% of Tabular Premium
Half-yearly mode 1% of Tabular premium
Quarterly, Monthly & SSS – NIL
Sum Assured Rebate
2,00,000 to 4,90,000 – Nil
5,00,000 to 9,90,000 – 0.125% of B.S.A.
10,00,000 to 14,90,000 – 0.150% of B.S.A.
15,00,000 and above – 0.175% of B.S.A.
Revival of Policy
If premiums are not paid within the grace period then the policy lapses. But this lapsed policy can be revived again. The revival of policy should happen within two years of lapse. To revive a policy, you would have to pay all the outstanding premiums along with interest. The riders can be also revived with the base policy.
The lapsed policy of Jeevan Labh would become a paid up policy. It means you wild get the death and maturity benefit but in a reduced amount. A policy can be paid up only after three years of premium payment.
The death benefit or maturity benefit of a paid up policy is given according to the following formula.
Death Benefit = Sum assured x (Total premium paid/ Total premium payable)
Maturity Benefit = Sum assured on maturity x (Total premium paid/ Total premium payable) + vested reversionary bonus (if any)
The maturity benefit of paid up policy is given only after the completion of policy period. Riders do not acquire any paid up value.
The policy can be surrendered provided at least three full years’ premiums have been paid. Only after paying at least for three years, you would be eligible to get back some money. However, your money gets locked for 5 years in an insurance policy.
The Guaranteed Surrender value would be the percentage of total premiums paid. This percentage will depend on the policy term and policy year in which the policy is surrendered. The percentage of surrender value is given below.
The reversionary bonus also acquires the surrender value. To see the surrender value factor of bonus, you can refer the policy document.
Like any other endowment policy, you can take a loan as well. The amount of loan is dependent upon the assumptive surrender value.
The policy would not give any death benefit if a policyholder suicides within a year of the policy.
The policy would also not give any death benefit if policyholder suicides within a year of policy revival.
However, the new insurance law has clearly stated that the insurer can’t refuse any claim after 3 years of policy on any ground.
Jeevan Labh Features At A Glance
|Minimum Age For Policy||8 years|
|Maximum Age For taking Policy||59 years|
|Tenures of Policy||16 years, 21 ears and 25 years|
|Premium paying term||For 25-year policy, 16 years
For 21-year policy, 15 years
For 16-year policy, 25 years
|Maturity Benefit||Guaranteed equal to sum assured|
|Bonus||Reversionary bonus and final bonus, It is NOT guaranteed|
|Minimum sum assured||2,00,000|
|Maximum Sum assured||No Limit|
|Mode of premium payment||Yearly, half-yearly, quarterly and monthly.|
It is one of the several endowment policies of the LIC. Like other endowment policy, It is focussed on investment but gives a lower return than the PPF account or bank fixed deposit. Of course, this policy saves tax but there are other good tax saving investments available. The ELSS, PPF, EPF, Suknaya Samirddhi and post office saving schemes are the far better tax saving investment options. You must compare other tax savers before choosing LIC Jeevan Labh or any other endowment insurance policy.
For life insurance cover, there can’t be simple and cheap plan than the Online Term Insurance plan.