LIC’s New Jeevan Anand Plan
If you look at the history of insurance in India, LIC is surely a veteran. For many years LIC has been synonymous to life insurance. With over 250 million people associated to it, LIC is the most trusted insurance companies in the country. Over the past six decades, LIC has provided multiple insurance plans to its customers and one such plan is LIC’s New Jeevan Anand. The New Jeevan Anand plan, as the name suggests, is a plan that offers coverage till the time the insured individual is alive, even if the plan has matured.
A participating non-linked policy, New Jeevan Anand is the perfect combination of saving as well as safety. With the features of a traditional savings plan and an insurance plan, New Jeevan Anand Plan provides financial aid to the beneficiary/beneficiaries whenever the life insured dies. LIC’s New Jeevan Anand Plan is a whole life-cum-endowment plan. This dual-benefit makes it one of the most favoured endowment plans.
Features of the New Jeevan Anand Policy
New Jeevan Anand, as discussed earlier, is a traditional participating whole life endowment policy. The other key features of the plan are as follows:
- If the policy holder survives the policy, when the plan ends he receives a maturity benefit and the life cover stays in force
- This policy offers double benefit, once at the maturity of the plan and again on the death
- In the unfortunate event of the death of the policy holder, the death benefit is received by the appointed nominee
- To enhance the payable benefits of the plan, bonus declarations are made
- The policyholder has to pay a premium for the entire duration of the plan.
- In case the first three-year premiums have been duly paid, the policy may be surrendered for cash
- The policyholder can fulfil his liquidity needs as he is also eligible for a loan amount which is according to the surrender value
- In case the policy holder opts for a higher amount of sum assured and pays the premium on an annual or semi-annual basis, he can get a rebate in the premium amount
Eligibility Criteria for New Jeevan Anand Policy
|Age of Entry
||INR 1 Lakh
Benefits of the New Jeevan Anand Policy
Let us now take a look at the benefits of LIC’s New Jeevan Anand Policy which make it one of LIC’s most popular endowment plans.
If the life insured survives the entire policy tenure and pays all due premiums, Maturity Benefit is paid to the policyholder at the end of the policy tenure, which is
- Basic Sum Assured +
- Simple Reversionary Bonus +
- Final Additional Bonus
Paid in lump sum and the policy continues.
Whenever the life insured dies, the Basic Sum Assured is paid to the nominee as a Death Benefit and the policy terminates.
Tax Benefits: Each life insurance plan offers the following tax benefits:
- The premium amount that is paid is eligible for a tax deduction under Section 80C
- The Maturity Claim, as well as the Death Benefit, are tax-free under Section 10 (10D) of the Income Tax Act, 1961, without a maximum cut-off limit.
Accidental Death and Disability Benefit which pays
On Accidental Death:
- 100% of the Accidental Sum Assured would payable along with Basic Sum Assured in a lump sum and the policy terminates.
On Accidental Permanent Disability, within 180 days of the accident:
- 100% of the Accidental Sum Assured would payable in instalments over the next 10 years and
- The future premiums would be waived off and
- The policy continues.
- On survival of the life insured till the end of the policy tenure, Maturity Benefit would be paid as per schedule.
Premium Payment Frequency
The policyholder can select a premium paying frequency as per his convenience. The frequency can be annual, bi-annual, quarterly or even monthly.
How does the New Jeevan Anand Policy Works?
To understand how the policy works, let us take the help of an expanse. Mr Menon is a 30-year-old businessman. He opts for the New Jeevan Anand Policy for a term of 35 years with a sum assured of INR 1 lakh.
Sample Premium rates
||79.05/ per INR 1,000 sum assured
||44.3/ per INR 1,000 sum assured
||29.95/ per INR 1,000 sum assured
||82.45/ per INR 1,000 sum assured
||46.75/ per INR 1,000 sum assured
||32.3/ per INR 1,000 sum assured
||88.2/ per INR 1,000 sum assured
||51.4/ per INR 1,000 sum assured
||37.1/ per INR 1,000 sum assured
||97.7/ per INR 1,000 sum assured
||59.65/ per INR 1,000 sum assured
|Age at Entry
|Basic Sum Assured
|Amount of Annual Premium
Annual Premium = 32.3/1000 * 100000 = INR 3,230
However, this plan offers high Sum Assured rebate and mode rebate for Annual premium payment, hence the premium = INR 3165
Let us see the two situations:
If he survives the policy
He will receive =
- Basic Sum Assured + simple Reversionary Bonus + Final Additional Bonus and the policy continues
INR 1 lakh + bonuses =
- INR 1,00,000 + INR 14,000 (with an assumed Return on Investment @4% p.a.) = INR 1,14,000 OR
- INR 1,00,000 + INR 1,56,000(with an assumed Return on Investment @8% p.a.) = INR 2,56,000
- And on the death of the Life Insured at any time after the policy matures, the Basic Sum Assured, i.e. INR 1,00,000 is again paid as Death Benefit and the policy terminates.
So, Total Double Benefit =
- Maturity Benefit of Basic Sum Assured + simple Reversionary Bonus + Final Additional Bonus PLUS
- Death Benefit of Basic Sum Assured
If he dies during the term of the policy
The policy nominee will receive 125% of the Basic Sum Assured along with the applicable bonuses, i.e. INR 1,00,000 + accrued bonuses, depending on the year of death.
||2% of Tabular premium
||1% of Tabular premium
|Quarterly and Monthly
High Sum Assured Discount:
|INR 1,00,000 to INR 1,95,000
|INR 2,00,000 to INR 4,95,000
||1.5% of Basic Sum Assured
|INR 5,00,000 to INR 9,95,000
||2.5% of Basic Sum Assured
|INR 10,00,000 and above
||3% of Basic Sum Assured
Purchasing New Jeevan Anand Policy
New Jeevan Anand Policy can be bought only through LIC registered intermediaries such as a broker or an agent. The policy may also be purchased by visiting LIC office. Certain documents required at the time of purchase are subject to the amount of sum assured selected by the policyholder, however, the basic documents are as follows:
- Duly filled and signed Application Form
- Passport Sized Photographs
- Proof of Address
- Proof of Age
- KYC documents such as PAN Card, Aadhaar Card
- Medical Report of the applicant
Claiming New Jeevan Anand Policy
- Death Claim
In the unfortunate event of the death of the policyholder, the nominee needs to submit the claim forms along with the primary policy documents. He would also need to provide the other details like a death certificate, medical details and the bank account details.
- Maturity Claim
The insured individual needs to submit a duly signed Claim Form, original documents of the policy along with the bank details for transferring the maturity amount.
- Surrender Claims
For the transfer of the surrender claims to the policyholder’s account, he needs to submit the Claim Form, original documents of the policy and the bank account details.
Other Important Details of New Jeevan Anand Policy
LIC will not treat any claim except to the limit of 80% of the paid premiums which would exclude taxes, rider premiums etc. Also, if the individual suicides within one year of policy revival, an amount that is higher of 80% of the premiums that are paid till the death of the individual or the surrender value, is payable to the nominee.
LIC provides its customers with a grace period of 30 days to pay the due annual, bi-annual and quarterly premium amount. The grace period for monthly premium payment is 15 days. In case the policyholder does not make the payment during this time, the policy will fail or lapse. However, the policyholder can still revive his policy within 2 successive years of the initial unpaid premium and before the end of the term of the policy.
Free Look Period
If the policyholder is not satisfied with the Jeevan Anand Policy, he can cancel it within 15 days of the commencement of the policy, if of course no claims have been processed.
When the policy gets 3 years old and all the premiums have been paid regularly, the policyholder is eligible to ask for surrender value. He can also apply for a loan against this value.
As per Section 39 of the Insurance Act, 1938, the policyholder is required to file nomination. If the policyholder wishes to change the nomination, a notice has to be submitted at the Company registration office, where the policy is maintained. LIC does not take any liability to the validity or the legal effect of the nomination.
Why should I invest in LIC’s New Jeevan Anand Policy?
LIC’s New Jeevan Anand Policy has the features of a traditional saving plan and an insurance plan. Not only does the plan provide financial aid in case the policyholder dies, but even if he outlives the policy, he still is eligible to receive a lump sum amount when the policy comes to an end. This dual-benefit makes it one of the most-chosen endowment plans.
What are the bonuses promised by New Jeevan Anand Policy?
For every year that the policy remains in force, New Jeevan Anand Policy offers simple reversionary bonuses. In both the cases, either death benefit or maturity benefit, apart from the vested bonuses, a final bonus may also be paid.
How much bonus will I receive if I purchase New Jeevan Anand Policy?
If New Jeevan Anand Policy lapses, can it be revived?
If due to non-payment of premium the policy has lapsed, it can be revived during the policy holder’s lifetime, but within 2 successive years of the initial unpaid premium and before the end of the term of the policy.
Will the nominee receive the death benefit in case the insured individual commits suicide?
New Jeevan Anand Policy will be void if the insured individual commits suicide within one year of date of onset of risk. The Corporation will not treat any claim except to the limit of 80% of the paid premiums which would exclude taxes, rider premiums etc. Also, if the individual kills himself within one year of policy revival, an amount that is higher of 80% of the premiums that are paid till the death of the individual or the surrender value, is payable to the nominee.
Do I need to pay an extra premium to add Riders to my plan?
Yes, for every rider one has to pay an extra premium. However, the amount to be paid for the added rider is very nominal.
What if I forget to pay an instalment of the premium?
LIC provides its customers with a grace period of 30 days to pay the due annual, bi-annual and quarterly premium amount. The grace period for monthly premium payment is 15 days. In case you do not make the payment during this time, the policy will fail or lapse. Though you can revive it within 2 successive years of the initial unpaid premium and before the end of the term of the policy.
Can NRI’s invest in Jeevan Anand Policy?
Yes, NRI’s are eligible to buy the policy.
Is the maturity amount taxable?
No. One of the greatest benefits of LIC’s New Jeevan Anand Policy is that no tax is to be paid when the policy matures. The policy is eligible under Section 80C and Section 10 (10D) of the Income Tax Act, 1961.
Can I get any rebate in the premium amount?
If you opt for a higher amount of sum assured and pay the premium on an annual or semi-annual basis, you can get a rebate in the premium amount.
Can I ask for a loan against the New Jeevan Anand policy?
Yes. When you pay all the premiums regularly for the initial 3 years of the policy a surrender value is accumulated, against which you are liable to take a loan.