LIC’s Jeevan Pragati Plan
LIC stands for Life Insurance Corporation of India. For more than 6 decades, this has been the most popular names in the field of insurance. For millions of Indians, LIC is suggestive of safe and trust-worthy life insurance policies. LIC believes that every individual has different needs and necessities. For what may be a priority for one, may not be so for the other. Therefore, LIC policies are varied in nature and each of them offers different solutions to different requirements. The transparent insurance plans help the common man plan for the future.
The veteran LIC launched a few plans in 2016, one of them is LIC’s Jeevan Pragati Policy. Launched on 3 February, 2016, Jeevan Pragati Policy is a non-linked with-profits endowment policy that provides the customers with a two-fold advantage of savings and welfare. After purchasing the policy, the risk cover is increased automatically every five years. This policy also caters to the liquidity requirements of the policy holder by providing an option of loan.
A participating non-linked plan, LIC’s Jeevan Pragati offers dual benefits of welfare and savings. It is a simple Endowment Plan with features of profit sharing. The plan provides a death benefit to the appointed nominee in case the insured individual expires before the policy matures. Not just that, maturity benefit is provided if the policyholder outlives the policy. He has to pay the required premium regularly for the entire term of the policy. Once the policy reaches its age of maturity, the individual will receive the sum assured and the loyalty additions.
Eligibility Criteria for LIC’s Jeevan Pragati Policy
| Minimum | Maximum | |
|---|---|---|
| Age of Entry | 12 Years | 45 Years |
| Sum Assured | INR 1.5 lakhs | No Limit (In multiples of Rs 10,000) |
| Policy Term | 12 Years | 20 Years |
| Maturity Age | 65 Years |
Key Features of LIC’s Jeevan Pragati Policy
The key features of the policy are given below:
- The minimum sum assured in LIC’s Jeevan Pragati is INR 1.5 lakhs, there is, however, no maximum limit.
- Every 5 years the risk cover is increased automatically.
- This policy also helps in planning for retirement as it caters to long term plans.
- The policyholder can add on Accidental Death and Disability Benefit rider to the basic policy to enhance the cover.
- The plan makes the policyholder eligible for receiving a reversionary bonus along with the final additional bonus.
- The policy term can range between 12 to 20 years and the policyholder can select a premium paying frequency-monthly, quarterly, bi-annually and annually.
Who should buy LIC Jeevan Pragati Policy?
LIC Jeevan Pragati Plan is considered to be ideal for people, within the age group of 12 to 45 years seeking insurance as the Jeevan Pragati Policy helps in an individual’s long term plans. With an increased cover keeping up with financial requirements at different stages of life, it becomes manageable for the policyholder.
Benefits of LIC’s Jeevan Pragati Policy
Let us now take a look at the benefits of LIC’s New Jeevan Pragati Policy which make it a popular endowment plan.
- Death Benefit
In the event of the death of the policyholder during the term of the policy, the beneficiary receives- Sum Assured on Death + accrued Simple Reversionary Bonus + Final Additional Bonus (if any).
- The sum assured is defined as the higher of 10 X the absolute amount assured or the annualised premium, as mentioned below in the table
- These premiums do not include taxes or the rider charges.
| Year Of Death | Sum Assured | Final Additional Bonus |
|---|---|---|
| During Initial 5 Years | 100% of the Sum Assured would be payable to the nominee | As applicable |
| Between 6-10 Years | 125% of the Sum Assured would be payable to the nominee | As applicable |
| Between 11-15 Years | 150% of the Sum Assured would be payable to the nominee | As applicable |
| Between 16-20 Years | 200% of the Sum Assured would be payable to the nominee | As applicable |
- Maturity Benefit
LIC’s Jeevan Pragati provides a Maturity Benefit to the policyholder at the end of thepolicy term. If the policyholder outlives the policy and has paid all the premiums regularly, he then is eligible for the maturity benefit. The amount,that is paid in lump sum, is equal to basic sum assured + reversionary bonus + final additional bonus. - Profit of Participation
If the policy is eligible, which means it is in force, it can earn a profit for LIC.It is then entitled to Simple Reversionary and Final Additional Bonus, which is calculated as per the sum assured. - Tax Benefits
Just like other LIC Policies, the premiums paid under LIC’s Jeevan Pragati are exempted from taxes under Section 80C. The Death Benefit and the Maturity Benefit received are also tax-free under Section 10 (10D). - Rider Benefit
By paying a little extra premium the policyholder can add on Accidental Death and Disability Benefit rider to the basic policy to enhance the cover.With this rider, if the policyholder dies in an accident or suffers disability, he would receive an additional benefit.
As per LIC, “An accident is a sudden, unforeseen and involuntary event caused by external, violent and visible means.”
This benefit is optional and depends completely on the selection of the policyholder. It may be purchased when buying the policy or later in life too.
Other Benefits offered by LIC’s Jeevan Pragati Policy
- Free-Look Period
If for some reason the policyholder wants to cancel the policy, thereis provision to terminate it within 15 days of purchase. This 15 day period is called the “Free-Look” period. The policyholder has to state thereasons for objection. The money is refunded after all the formalities are done with. - Surrender Value
Surrender Value is the amount that is payable when the policy is surrendered. Thus, if he is not able to pay the premiums or continue the plan for some reason, he may choose to surrender the plan as well. He can, however, surrender his plan only after paying a premium for a period of 3 years from the date of policy inception and not before that.
This policy offers a Guaranteed Surrender Value which depends on the policy tenure chosen and the year of surrender. On surrendering the plan, the surrender value of the vested bonuses, if applicable is also payable along with the Guaranteed Surrender Value. - Flexibility in Payment of Premium
Depending on his own experience, a policyholder can select any of the 4 premium paying frequencies available monthly, quarterly, semi-annually and annually. - Grace Period
Grace Period is the time limit that is granted by the insurer from the date due to make the payment without penalising the policyholder. LIC provides its customers with a 30-Day grace period if the premium payment frequency is annual, bi-annual and quarterly. In case if the frequency is monthly then the grace period is of 15 days. If the policyholder does not clear his dues during this time, the policy will fail or lapse. - Revival Period
If the policy has lapsed due to non-payment of premium, there is a provision to revive it, but this has to be done within 2 successive years of the initial unpaid premium and before the end of the term of the policy. - Availability of Loan
The policyholder has the provision to take a loan against his policy after 3 years of policy term. It is imperative that he has been regular with his premium payments.
Exclusions in Jeevan Pragati Policy
LIC Jeevan Pragati Policy would be void if the insured individual:
- If the individual commits suicide within 1 year of buying or reviving the policy, LIC will not serve any claim other than 80% of the amount paid through premiums, if the policy is in force.
The accidental death claim shall not be payable under the following situations:
- Death caused by self-destruction or injury, attempted suicide, under the influence of drugs, intoxication or alcohol, narcotics, etc
- Death caused by participating in a war, riot, civil commotion, terrorism activity, etc.
- Death caused by any criminal act or conspiracy
- Death occurs more than 180 days after the accident
Claiming Jeevan Rakshak Policy
Death Claim
To make a death claim the nominee who is the claimant should first lodge the claim. He then has to submit:
- The claim forms duly filled and signed by the nominee
- The nominee/beneficiary’s identity and address proof
- Death certificate of the life insured
- Original Policy documents
- NEFT Mandate for direct credit
- Medical Treatment prior to death
Maturity Claim and Surrender Claim
If the policy holder has to make a maturity claim or in case a surrender claim, he needs to submit:
- The discharge form, duly filled by the policyholder and signed
- Original policy document
- NEFT Mandate from the claimant
- Bank details
- Proof of age of the applicant, if the same had not been submitted earlier.
Accidental Death Claim:
- Copy of the FIR at the police station
- Copy of the police report
- Post mortem report, in case of death
- Newspaper cuttings of the accident, in case of a report
- Hospital records
Sub-divisional verdict of the cause of accident to prove that the same was not created on purpose
FAQ’s
The policyholder can add-on LIC’s Accident and Disability Benefit Rider to his policy.
If the insured individual has regularly paid all his premiums regularly for the initial three years of purchasing the policy, he is eligible for a surrender value. After three years only the policy collects a claimable surrender value.
In case the premium paying frequency is per month, then the policyholder has a grace period of 15 days. In the case of quarterly, semi-annual and annual frequency there is a 30-Day grace period. The policy will lapse if the policyholder does not pay his dues within this period.
If the policyholder does not pay the premium amount even in the grace period provided, the policy will lapse. However, the policyholder can revive it within a time limit of two years from the first unpaid premium date. But, it should be remembered that the revival has to be done before the maturity date.
If the policyholder does not pay the premium even in the grace period, the policy will lapse. However, the policyholder can revive it within a time period of two years from the first unpaid premium date. But, it should be remembered that the revival has to be done before the policy’s date of maturity.
If the individual commits suicide within 1 year of buying the policy, LIC of India will not serve any claim other than 80% of the amount paid through premiums, if the policy is in force. If the individual does so within 1 year of reviving the policy LIC will not serve any claim other than 80% of the premiums paid till the date of death.
If the policy holder wishes to add the Accidental and Disability Benefit Rider to his base plan, he can do so by adding a small amount to the premium amount. If in case the policy holder’s death or disability in an accident, during the term of the policy, the nominee would receive an extra amount apart from the sum assured.
The maturity benefit under LIC’s Jeevan Pragati Policy, which is received by the policy holder at the end of the policy term, is free from taxation under Section 10 (10D).
After the policy holder makes a regular payment of premiums for first 3 years, Surender Value accumulates and the policy holder can avail a loan.