LIC’s Jeevan Rakshak Plan

Life Insurance Corporation of India, better known as LIC, is one of India’s most-trusted and most-popular insurance companies. For more than 60 years, LIC has been offering a plethora of insurance policies to millions of people. This veteran Corporation is also preferred for its policies that come with no-hidden costs as well as a swift claim settlement. One of their very famous policies is LIC’s Jeevan Rakshak Policy.

A participating non-linked plan, LIC’s Jeevan Rakshak offers dual benefits of safety 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.

Key Features of LIC’s Jeevan Rakshak Policy

  • If the policy holder dies before the maturity date of the policy, the appointed nominee receives the sum assured also called the death benefit. After this, the policy comes to an end.
  • If the insured individual survives the policy, he would receive the maturity benefits along with loyalty benefits, if any. After this the policy comes to an end.
  • LIC’s Jeevan Rakshak Policy has a low life cover, the maximum sum insured is Rs. 2 lakh and the minimum can be Rs. 75,000.
  • The basic sum assured has to be in multiples of Rs. 5,000.
  • The policy holder can select a policy term that can be from 10 to 20 years.
  • The frequency of the premium payment can be monthly, quarterly, bi-annually or annually. The policy holder can choose the frequency that suits him the most.
  • The maximum age for maturity in this plan is 70 years.
  • After paying premiums regularly for 5 years, the policy holder is eligible to receive loyalty benefit.

Benefits of LIC’s Jeevan Rakshak Policy

The biggest of investing in LIC’s Jeevan Rakshak Policy is that it is an LIC policy. There is an element of trust attached to the Corporation. The many other advantages of this policy are given below:

  • Death Benefit
    In the unfortunate event of untimely death of the policyholder during the term of the policy, the appointed nominee receives the Death Benefit.

    The Death Benefit is the sum assured on death, which is calculated as the higher of:

    • Basic Sum Assured or
    • 10 times the annual premium or
    • 105% of the premiums that have been paid to date
    • + Loyalty Additions would be payable if the death of the insured takes place at least 5 years after the policy has been purchased.
  • Maturity Benefit
    If the insured survives till the end of the policy tenure and duly pays all premium, Maturity Benefit would be payable to him in a lump sum and the policy would terminate.

    Maturity Benefit = Basic Sum Assured + Loyalty Additions

  • Loyalty Additions
    If the policy is in force, then after 5 years of regular payment of premium, Loyalty Additions are also paid as the death benefit as well as the maturity benefit. Loyalty Additions are declared by the Corporation based on its experience.
  • Tax Benefits
    • The premiums that are paid by the policy holder are tax-free under section 80C of the Income Tax Act.
    • The death benefit as well as the maturity benefit under LIC’s Jeevan Rakshak Policy are free from taxation under Section 10(10D).
  • LIC Accident Benefit Rider
    This add-on can be added to the basic plan after the age of 18 years. With this rider, if in case the policyholder dies in an accident, during the term of the policy, the nominee would receive an extra amount apart from the sum assured. To opt for this rider, an additional premium amount would have to be paid regularly.

Other Benefits offered by LIC’s Jeevan Rakshak Policy

  • Free-Look Period
    A free-look period is available in this plan. If the policy holder wishes to he can return the policy to the Corporation within 15 days of purchasing it. Once a request is made by the policyholder, the policy is called off, and the premium paid minus the expenses is returned to his bank account.
  • Flexibility in payment of Premium
    As per his own convenience and financial plans the policy holder can select a premium paying frequency which can be monthly, quarterly i.e. every three months, bi-annually or annually.
  • Revival Period
    In case a policy gets lapsed, the policy holder can revive it within a time period of two years from the first unpaid premium date. But the revival has to be done before the maturity date.
  • Surrender Value
    If for some reasons, the policy holder wants to terminate the policy, he can avail the termination benefit, if all the conditions are fulfilled. For this the insured individual should have paid premiums regularly for the first three years of policy term. After three years only, the policy accumulates a surrender value.
  • Grace Period
    The Corporation gives a grace period of 15 days in case the premium paying frequency is per month. In case of quarterly, semi-annual and annual frequency the grace period is of 30 days.
  • Availability of Loan
    After a regular payment of premiums for 3 years, Surender value accumulates and the policy holder can avail a loan.

How does Plan work?

Gupta, a 35-year-old non-smoker, buys the Jeevan Rakshak Policy with a sum assured of INR 1 lakh, Policy term and a payment term of 20 years each.
Based on these criteria, the annual premium he would pay would be around INR 3,587. The plan would work differently in different scenarios.

Sample Premium
Given below is a sample premium and the corresponding Sum Assured for a 35-year-old male. The premium amount on the yearly mode is mentioned in INR, for a policy term of 20 years.

Age at Entry 35 years
Policy Term 20 years
Basic Sum Assured INR 1,00,000
Amount of Single Premium INR 3,587

Death Benefit

  • If Mr Gupta, passes away after 4 years of buying the policy, the appointed nominee would receive the higher of:
    • Basic Sum Assured of INR 1 lakh or
    • Annualised premium X 10 times, which would be around INR 35,870 or
    • 105% of all the premiums that have been paid till the time of death would be around INR 15,065.40

    As the policy did not complete 5 years, there would be no loyalty additions.
    So, the nominee would receive only Rs 1 lakh as the death benefit and the policy would terminate.

  • Now, if Mr Gupta, passes away after 15 years of buying the policy, the appointed nominee would receive the higher of:
    • Basic Sum Assured of INR 1 lakh
    • Annualised premium X 10 times, which would be around INR 35,870 or
    • 105% of all the premiums that have been paid till the time of death would be around INR 54,495.25.

    The nominee would be eligible to receive the loyalty additions as well.
    So, the nominee would receive Rs 1 lakh + Loyalty Addition as the death benefit and the policy would terminate.

Maturity Benefit

  • If Mr Gupta outlives the policy then he would receive:
  • Sum assured of INR 2 lakh
  • Loyalty additions as per declared by the LIC of India.

Eligibility Criteria for LIC’s Jeevan Rakshak Policy

Minimum Maximum
Age of Entry 8 Years 55 Years
Sum Assured INR 75,000 INR 2 Lakh
Policy Term 10 Years 20 Years
Maturity Age 70 Years

LIC's Jeevan Rakshak Policy Exclusions

if the policyholder commits suicide within 1 year of buying the policy, 80% of the premiums that have been paid are given to the nominee. If in case, the policyholder does so within 1 year of police revival, the nominee would then receive the higher of 80% of the paid premiums or the acquired surrender value.

Purchasing Jeevan Rakshak Policy

Jeevan Rakshak Policy can be purchased online by visiting the official website of the Corporation. The premium calculator gives a clear picture of how much the premium would be. The policy can also be purchased through registered agents and brokers or by visiting any LIC branch office. A few documents are required when applying for the policy. They are:

  • Duly filled and signed Application Form
  • Proof of Address
  • Proof of Age
  • Medical History Report (if asked)

Claiming Jeevan Rakshak Policy

Death Claim
In case the policy holder dies during the term of policy, the nominee has to submit the claim form along with policy documents. He also needs to provide death certificate, medical details and the bank account details.

Maturity Claim
If the insured individual outlives his policy, he has to submit a duly signed Claim Form, original papers of the policy and the bank details for smooth transfer of the maturity amount to his account.

Surrender Claims
To claim the surrender value, the policy holder needs to submit the Claim Form, original documents of the policy and the bank account details.


FAQs

LIC Jeevan Rakshak Policy is a participating non-linked plan, LIC’s Jeevan Rakshak offers dual benefits of safety and savings. It is an extremely cost-effective and affordable plan for low-income people.


The policyholder can get LIC’s Accidental Benefit Rider to his policy.


To avail the Surrender Value, the insured individual should have paid all his premiums regularly for the first three years of policy term. After three years only the policy accumulates a surrender value.


The policyholder has a grace period of 15 days in case the premium paying frequency is per month. In case of quarterly, semi-annual and annual frequency the grace period is of 30 days. If the policyholder does not pay his dues within this period, the policy will lapse.


If the policy lapses the policyholder can revive it within a time period of two years from the first unpaid premium date. But 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 the revival has to be done before the maturity date.


If the suicide is committed within 1 year of buying the policy, 80% of the premiums that have been paid are given to the nominee. If in case, the policyholder commits suicide within 1 year of police revival, then the nominee receives the higher of 80% of the paid premiums or the acquired surrender value.


By paying just a small amount the Accident Benefit Rider can be added to the plan. With this rider, if in case the policyholder dies in an accident, during the term of the policy, the nominee would receive an extra amount apart from the sum assured.


The death benefit under LIC’s Jeevan Rakshak Policy is free from taxation under Section 10 (10D).


After a regular payment of premiums for 3 years, Surrender Value accumulates and the policy holder can avail a loan.