LIC’s Jeevan Labh Plan
Established in 1956, the Life Insurance Corporation of India (LICI) is one of the largest and the most trusted life insurance company. It sells a variety of insurance policies to individuals and LIC Jeevan Labh is one such plan which is popular among individuals. LIC’s Jeevan Labh is an endowment assurance plan which pays a benefit either on death or on maturity. Let’s understand the plan in details –
What are endowment plans?
Endowment plans are traditional life insurance plans which pay a guaranteed benefit. These plans promise the payment of the sum assured either when the insured dies during the term of the plan or when the insured survives the chosen policy tenure. Endowment plans are also offered as participating policies which means that the plans earn a bonus. If the insurance company earns a profit in a financial year, such profits are distributed to policyholders in the form of a bonus. Participating endowment plans become eligible for bonus declarations made by the insurance company. The bonus increases the benefit payable under the policy.
LIC’s Jeevan Labh Plan
LIC’s Jeevan Labh Plan, as stated earlier, is a traditional endowment plan. Here are the salient features of the plan –
Features of LIC Jeevan Labh Plan
- The plan is offered as a participating plan. Simple reversionary bonuses are declared every year on the sum assured you have chosen if the company makes a profit.
- Two additional riders can be chosen with the plan. The riders include LIC’s Accidental Death and Disability Benefit Rider and LIC’s New Term Assurance Rider
- You have to pay premiums only for a limited period. The premium payment term depends on the policy term that you select
- LIC’s Jeevan Labh Plan allows you the option of choosing long tenures for creating substantial corpus
- Premiums discounts are allowed under the plan which makes the premium more affordable
- You can also take a loan under the plan for meeting your financial requirements
Benefits of LIC’s Jeevan Labh Plan
Here are some of the benefits which the plan provides –
- Participation in profits
Since LIC Jeevan Labh is a participating plan, it earns bonuses. Bonuses help in increasing the death or maturity benefit and create substantial savings for the policyholder.
- Customisation through riders
The policy offers you a choice of additional riders. Through these riders, you can enhance the coverage of your plan and also customize it. The Accidental Death and Disability Benefit Rider pays a lump sum benefit if the insured suffers accidental death or disablement during the term of the plan. The Term Assurance rider, on the other hand, promises a lump sum benefit if the insured dies during the policy term. Thus, both these riders promise additional benefits and can be chosen to increase the scope of the policy’s coverage.
- Flexible and limited premium payments
Premium payments under LIC’s Jeevan Labh Plan are also flexible in nature. You can pay the premium annually, half-yearly, quarterly or monthly. Moreover, you don’t have to pay the premiums for the entire duration of the plan. The payment term is limited while the policy continues for a longer tenure.
- Attractive premium discounts
Discounts are always good and LIC’s Jeevan Labh Plan allows you two types of premium discounts. The first premium discount is for paying the premium yearly or half-yearly. If you pay premiums yearly, you get a discount of 2% of the tabular premium. In the case of the half-yearly payment mode, the discount is 1% of the tabular premium. The second discount is for choosing higher sum assured levels. In this case, the discount increases with the increase in sum assured levels.
The available discounts are as follows –
|Sum assured chosen
|INR 2,00,000 to INR 4,90,000
|No discount is available
|INR 5,00,000 to INR 9,90,000
|1.25% of the base sum assured chosen
|INR 10,00,000 to INR 14,90,000
|1.50% of the base sum assured chosen
|INR 15,00,000 and above
|1.75% of the base sum assured chosen
- Policy loans for financial emergencies
Financial emergencies might arise anytime and when they do you don’t have to look anywhere else for financial help. LIC’s Jeevan Labh Plan offers you a policy loan based on the surrender value acquired by your plan.
- Tax benefits
The policy also provides you with attractive tax saving benefits. The premiums that you pay for LIC Jeevan Labh plan are allowed as a tax deduction under Section 80C up to INR 1.5 lakhs. Moreover, the death benefit or maturity benefit that you receive under the plan would also be completely tax-free under Section 10 (10D) of the Income Tax Act. Thus, buying LIC’s Jeevan Labh Plan not only allows you to reduce your tax liability, but it also creates a tax-free saving corpus.
Who should buy LIC’s Jeevan Labh Plan?
LIC’s Jeevan Labh Plan is suitable for you if –
- You want to save for a long term period
- You want to create risk-free savings
- You want guaranteed returns
- You want to combine savings with life insurance coverage
Eligibility criteria for LIC’s Jeevan Labh Plan
The eligibility criteria for LIC’s Jeevan Labh Plan and other terms include the following –
|Age at which the plan can be bought
|8 years (completed)
|If the policy term is 16 years – 59 years as per the nearest age
If the policy term is 21 years – 54 years as per the nearest age
If the policy term is 25 years – 50 years as per the nearest age
|Maximum age up to which coverage is available
|75 years as per the nearest age
|Term of the policy
|16, 21 or 25 years
|Premium paying term under the plan
|Policy term 16 years – 10 years
Policy term 21 years – 15 years
Policy term 25 years – 16 years
|Allowed sum assured level
|INR 2 lakhs
Documents required to buy the LIC Jeevan Labh policy
To buy Jeevan Labh Plan, the following documents would be required –
- Proposal form of the plan completely filled
- Recent coloured photograph of the life insured and proposer
- Identity proof like Voter’s ID Card, PAN Card, Aadhar Card, Driving License, Passport, etc.
- Address proof like Voter’s ID Card, Driving License, Passport, Electricity bill, telephone bill, etc.
- Age proof like passport, voter’s ID Card, Aadhar card, etc.
Coverage under LIC of India Jeevan Labh Plan
Jeevan Labh Plan covers two instances which are as follows –
- Death during the term of the plan
If the insured dies during the chosen term, a death benefit is paid. The death benefit is calculated as follows –
Death benefit = Sum assured on death + vested bonus + final additional bonus (if any)
The sum assured on death is either taken as 10 times the annual premium paid or the base sum assured which had been chosen under the policy. However, the death benefit, in any case, would not be below 105% of total premiums paid till death
- Survival till the end of the term
If the insured survives till the end of the policy term, the LIC Jeevan Labh policy is said to mature. On maturity of the policy a maturity benefit is paid. The maturity benefit is called sum assured on maturity and is calculated as follows –
Sum assured on maturity = base sum assured chosen + vested bonus + final additional bonus (if any)
Exclusions for LIC Jeevan Labh Plan
Suicides are excluded from the coverage of the policy. If the insured dies due to suicide, the sum assured would not be paid on death. In such cases the death benefit would be as follows –
- If the insured dies due to suicide within the first 12 months of buying the policy – 80% of the premiums paid
- If the insured dies due to suicide within 12 months of revival of the policy – higher of 80% of the premiums paid or the surrender value applicable under the plan.
Premium payable for LIC of India Jeevan Labh Plan
The premium payable for LIC Jeevan Labh policy depends on the following factors –
- The sum assured
- Age of the insured
- Mode of paying premium
- Premium paying term
- Policy term
The same premium rates of the policy are as follows –
|Age of the insured
|Policy term 16 years Premium paying term 10 years
|Policy term 21 years Premium paying term 15 years
|Policy term 25 years Premium paying term 16 years
|85.50/1000 sum assured
|85.50/1000 sum assured
|46.60/1000 sum assured
|86.80/1000 sum assured
|56.81/1000 sum assured
|48.90/1000 sum assured
|90.95/1000 sum assured
|61.85/1000 sum assured
|54.80/1000 sum assured
So, if you choose a sum assured of INR 2 lakhs, your age is 30 years and you choose a policy term of 25 years, you would have to pay a premium of INR 9320.
How to make a claim in Jeevan Labh Plan
Maturity claims are initiated by the company itself. If the maturity date is approaching, the company would start preparing to pay the maturity benefit. You would just have to submit a filled up claim form and an identity proof and the policy proceeds would be paid
In case of death claims, however, the insurance company should be intimated about death. Once the company is intimated and the relevant documents are submitted, the company pays the death claim to the nominee appointed by the life insured.
Documents for Claim : The documents required for death claims include the following –
- Claim form which should be filled in
- Identity proof of the nominee
- Death certificate
In case of accidental death, the following additional documents would also be required
- Police FIR
- Coroner’s report
- Police inquest report
- Port-mortem report
- Punchnama, etc.
How to buy LIC Jeevan Labh Plan
You can buy Jeevan Labh online or offline. Here’s how –
- Buying offline – offline plans are sold by the company’s distributors (agents, brokers, etc.). You can also buy the plan by visiting LIC’s branch.
- Buying online – online LIC Jeevan Labh Plan is available on the company’s website as well as on the website of insurance aggregators and online brokers. Buying Jeevan Labh online is simple, easy and convenient. It also allows you to get coverage at the earliest.
Frequently Asked Questions
Yes, LIC Jeevan Labh plan allows you a free-look period of 15 days from the date of issue of the policy. If you are not satisfied with the policy or want to cancel the policy for any other reason, you can do so within this period. The premium would be refunded back upon cancellation after deduction of some relevant expenses.
Yes, the grace period is allowed for paying the outstanding premium if the due date has passed. The grace period is 15 days if the premium is paid in the monthly mode else it is 30 days.
If the premium payments are stopped before the completion of the premium paying term, LIC Jeevan Labh policy would lapse. Upon lapse, the policy would be converted to a paid-up policy having a reduced sum assured if at least the first three years’ premiums have been paid in full.
If the premium for the first three years has been paid, LIC Jeevan Labh policy can be surrendered. Upon surrender, the surrender value of the policy would be paid. The surrender value depends on the policy year when the policy is surrendered and the policy term selected. The value is calculated as a percentage of the total premiums paid under the plan. Here are the sample rates of surrender value available under LIC Jeevan Labh Plan –
|Policy year of surrender
|Policy term 16 years
|Policy term 21 years
|Policy term 25 years
The rider sum assured is equal to or below the sum assured chosen under LIC Jeevan Labh plan.
No, the bonus paid under LIC Jeevan Labh policy would depend on the profit earned by the company in a particular financial year. As such, the bonus is not guaranteed and depends on the company’s financial performance.
Yes, each rider comes at an additional premium which is very low. If you choose one or both riders under LIC Jeevan Labh plan, you would have to pay an additional premium for each rider chosen.
LIC Jeevan Labh plan promises a final additional bonus which is paid in the year there is a claim in the policy. The claim can be a maturity claim or a death claim. The bonus would depend on the profit experience of the company and is not fixed.
You can choose to buy one or both the riders available under the policy. However, the rider sum assured would never exceed the sum assured of the policy. Moreover, the rider premium should not be more than 30% of the premium of the base policy.
There is no limit on the maximum sum assured which is available under LIC Jeevan Labh plan. You can choose any level of sum assured as long as the premiums are affordable and can be paid. Moreover, the company would allow the chosen sum assured after doing a financial underwriting of your proposal.
Yes, if your LIC Jeevan Labh policy has lapsed, you can revive it within 2 years of such lapse by paying the outstanding premium, any interest thereon and the proof of continued good health.
If the premiums for this policy is not paid but the amount is not taken out from the insurance company, the policy is called paid-up policy and the coverage also continues but for a limited amount and tenure.