The Life Insurance Corporation of India offers a range of life insurance plans right from term insurance to unit-linked plans. The plans can be traditional insurance plans or market-linked ones. While traditional plans promise a guaranteed benefit on maturity or death, unit-linked plans do not guarantee the benefits since returns depend on market performance.
Jeevan Saral is a traditional endowment assurance plan which is offered by LIC. The plan, being traditional in nature, pays guaranteed benefits on maturity or death. However, this plan has been discontinued by the LIC of India.
Let’s understand the plan in details –
Features of LIC’s Jeevan Saral Plan:
- This is a regular premium policy where premiums are paid throughout the term of the plan.
- This is a participating policy which promises loyalty additions. Loyalty additions, in the form of a terminal bonus, are paid either on early death or maturity of the plan. The rate of loyalty additions depends on the performance of the insurance company.
- You can enhance the coverage of the plan by choosing the available riders.
- You can surrender the policy and terminate the coverage if the plan was active for the first three policy years.
Benefits offered under the plan:
The following benefits are promised under LIC’s Jeevan Saral Policy –
|Benefits payable||Amount of benefit|
|Death Benefit of LIC Jeevan Saral Policy||If the insured dies during the chosen term of the policy, a death benefit is paid. The death benefit is equal to the following –
250 times the monthly premium paid + refund of premiums paid from the second policy year + loyalty additions
|Maturity Benefit of LIC Jeevan Saral Policy||If the insured survives till the end of the selected tenure, a maturity benefit is paid. This benefit is equal to the maturity sum assured and loyalty additions. The maturity sum assured is calculated depending on the age of the insured and the amount of premium paid.|
|Surrender Value of LIC Jeevan Saral Policy||If you choose to surrender the policy, higher of the Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV) would be paid. The calculations of these values would be done using the following formulas –
Premium payable for LIC’s Jeevan Saral:
You can decide on the amount of premium that you want to pay for LIC’s Jeevan Saral policy. Based on the premium amount selected, the maturity benefit and death benefit of the plan are calculated. Moreover, you can also choose to pay the premiums annually, quarterly, half-yearly or monthly. Monthly payments are allowed only through salary deductions. Premiums are payable for the entire duration of the policy.
Loyalty Additions under LIC’s Jeevan Saral Plan:
- The rate of loyalty additions is not fixed. It is determined by LIC depending on the profits earned by it in a financial year.
- Loyalty additions are added if the plan completes 10 policy years. Death or maturity after 10 years would give you additional loyalty additions.
Tax benefits of LIC’s Jeevan Saral:
LIC’s Jeevan Saral policy offers the following types of tax benefits –
- Premium payment U/S 80C:
The premiums paid for the plan are allowed as a deduction from your taxable income up to INR 1.5 lakhs under Section 80C.
- Maturity benefit U/S 10(10)D:
- The surrender benefit received would be tax-free in your hands under Section 10 (10D).
- The maturity or death benefit received under the plan would also be tax-free under Section 10 (10D).
LIC’s Jeevan Saral Plan is a simple endowment plan which helps you create a savings corpus which is guaranteed in nature. The loyalty additions add to the plan benefits and make it more attractive. There are easy options of surrendering the policy too and the surrender value promised is also high. Currently, LIC does not offer this policy. However, if you have invested in Jeevan Saral at an earlier date, you can still reap the benefits promised by the plan.