Jeevan Utsav with Example: When it comes to life insurance in India, the Life Insurance Corporation (LIC) stands out as a trusted and reliable provider. Among its many offerings, the LIC Jeevan Utsav plan is a notable one, designed to meet the diverse needs of policyholders. This blog post will delve into the details of the LIC Jeevan Utsav plan, explaining its features, and benefits, and providing a practical example to illustrate its workings.
What is LIC Jeevan Utsav?
LIC Jeevan Utsav is a non-linked, participating, limited premium payment endowment plan. This plan is designed to provide financial protection against death throughout the policy term, with the added benefit of a lump sum payment at the end of the policy term in case the policyholder survives. The plan also participates in the corporation’s profits and is eligible to receive bonuses.
Key Features
- Policy Term and Premium Payment Term:
- Policy Term: 100 – Your Age (For Example if your age is 30 then Policy Term will 70)
- Premium Payment Term: 5 Years to 16 Years
- Sum Assured:
- Minimum Sum Assured: Rs. 5,00,000.
- Maximum Sum Assured: No upper limit (subject to underwriting).
- Premium Payment Modes:
- Yearly, Half-yearly, Quarterly, and Monthly (ECS).
- Participation in Profits:
- The policy participates in the corporation’s profits and is eligible for bonuses.
- Maturity Benefit:
- There is no maturity in this policy. This policy provides 10% Guaranteed Lifetime Income.
- Death Benefit:
- In case of death during the policy term, the Sum Assured on Death along with Guaranteed Addition or 7 times of annualised premium is payable.
Benefits of LIC Jeevan Utsav
- Loan Facility:
- Policyholders can avail of a loan against the policy to meet financial emergencies.
- Tax Benefits:
- Premiums paid under this plan are eligible for tax benefits under Section 80C of the Income Tax Act, and the 10% Guaranteed addition payable on survival is also tax-free under Section 10(10D).
LIC Jeevan Utsav with Example to Illustrate its benefits
Let’s consider an example to understand the workings of the LIC Jeevan Utsav plan better.
Example:
- Age of the Policyholder: 30 years
- Sum Assured: Rs. 5,00,000
- Policy Term: 70 years
- Premium Payment Term: 16 years
- First-Year Premium: Rs. 31,376
- Second-Year onwards Premium: Rs. 30,701
Scenario 1: Survival Benefit
Mr. Rajesh, aged 30, buys the LIC Jeevan Utsav policy with a Sum Assured of Rs. 5,00,000. He pays an annual premium of Rs. 30,701 for 16 years. Mr. Rajesh will start getting a 50000 Yearly Guaranteed Income for a lifetime.
Scenario 2: Death Benefit
In case of Mr. Rajesh’s unfortunate demise after 16 years of policy inception:
Total Death Benefit = Rs. 8,20,000
Scenario 3: Surrender Benefit
There is a Surrender benefit available in this policy. For Example, if you close this policy at the age of 60 then you will receive Rs. 6,46,734.
Conclusion
LIC Jeevan Utsav is an excellent plan for those looking for a combination of insurance and savings. It offers a comprehensive death and survival benefit, participation in the corporation’s profits, and various other advantages like loan facility and tax benefits. By understanding its features and benefits through practical examples, potential policyholders can make informed decisions to secure their financial future.
