Let’s continue reading the article below and cover all the key details of LIC Jeevan Umang policy.
Features and Benefits of LIC Jeevan Umang Plan
Here are the most remarkable features of the LIC Jeevan Umang plan –
- Whole life insurance: LIC Jeevan Umang Policy offers whole life coverage, ensuring the policyholder's protection until 100 years.
- endowment plan: It is an endowment plan that provides dual benefits of insurance coverage and savings, making it an excellent investment option.
- Regular Payouts: After the premium payment term, the plan offers annual payouts that ensure a steady income stream.
- Maturity Benefits: A lump sum amount is paid out at the time of maturity of Jeevan Umang Plan LIC, which includes the sum assured plus bonuses (if any).
- Death Benefits: In case of the policyholder's demise during the policy term, the nominee receives the sum assured, which helps them maintain their lifestyle and fulfil all the necessary obligations.
- Premium Payment Options: LIC Jeevan Umang Plan offers flexible premium payment terms of 15, 20, 25, and 30 years.
- Participation in Profits: Being a participating plan, it entitles the policyholder to share in the profits of LIC in the form of bonuses.
- Survival Benefits: From the end of the premium paying term till maturity or 100 years of age, the policyholder receives 8% of the Basic Sum Assured annually as survival benefits.
- Enticing Discounts: You can avail of discounts for selecting either half-yearly or yearly premium payment modes.
- Loan Facility: As a policyholder, you can avail of a loan against this policy after it acquires a surrender value and have a financial cushion in times of need.
Why Opt for LIC Jeevan Umang Plan?
You should consider LIC Jeevan Umang Policy for the following reasons –
- Tax-Free Benefits: One of the most compelling reasons to choose the LIC Jeevan Umang Plan is its tax exemption. All benefits, including maturity and death benefits as well as annual survival benefits, are completely tax-free under Section 10(10D) of the Income Tax Act, 1969. This provision enhances the overall return on investment of the policy.
- Comprehensive Life Cover: The LIC Jeevan Umang Plan offers extensive risk cover for the entire lifetime of the policyholder, starting from the date of issuance and extending until the policyholder reaches the age of 100. Such long-term protection provides peace of mind and ensures financial security for the policyholder's family.
- Guaranteed Lifetime Income: This plan offers the distinct advantage of a guaranteed annual income from as early as 30 years. Whether purchased for oneself or for one's children, the policy guarantees survival benefits each year until the policyholder reaches 100 years of age to create a stable income stream for life. This unique feature makes the Jeevan Umang Policy LIC an ideal choice for those seeking both insurance and a long-term investment solution.
Eligibility Criteria for LIC Jeevan Umang Plan
You would be required to fulfil the following eligibility criteria before applying for LIC Jeevan Umang Policy:
- Age: The minimum age to apply for LIC Jeevan Umang Policy is 90 days, while the maximum age at entry is 55 years. This makes the plan accessible to a wide age range.
- Policy Term: The policy term is calculated as 100 years minus the age at entry, which ensures coverage for the policyholder up to the age of 100.
- Sum Assured: The minimum sum assured under this plan is INR. 200,000, and there is no defined upper limit, thus offering flexibility based on the policyholder's financial objectives and capabilities.
- Maturity Age: The maturity age for the LIC Jeevan Umang Plan is 100 years.
- Premium Paying Term: The premium paying terms available are 15 years, 20 years, 25 years, and 30 years. This offers a variety of options to cater to different financial planning needs.
- Age at the End of Premium Paying Term: The minimum and maximum ages at the end of the premium paying term are 30 years and 70 years, respectively, thereby aligning with the policyholder's income-earning years.
How Does LIC Jeevan Umang Plan Work?
Let's consider the example of Mr Mohammed, a 30-year-old male who decides to purchase the LIC Jeevan Umang Policy.
Mr Mohammed opts for the following coverage:
- Sum Assured: INR 10,00,000
- Policy Term: 70 years (calculated as 100 minus 30 years)
- Premium Paying Term: 20 years
Using the LIC Jeevan Umang Plan calculator, Mr Mohammed calculates that he might need to pay an annual premium of INR 54,036 (including taxes). It is important to note that taxes include 4.5% GST on the first-year premiums and 2.25% on premiums payable in the subsequent years.
Now, let's explore the benefits that Mr Mohammed or his family would be entitled to under different scenarios:
If Mr Mohammed dies within the premium paying term: In the unfortunate event of Mr Mohammed's death during the premium paying term, his family will receive the death benefit. The death benefit can either be 7 times the annual premium (INR 3,78,252) or the Basic Sum Assured (INR 10,00,000) plus applicable bonuses, whichever is higher. In this case, since the latter is higher, LIC will pay the Basic Sum Assured plus bonuses to Mr Mohammed's family.
If Mr Mohammed dies 10 years after the premium paying term ends: Suppose Mr Mohammed survives the premium paying term and passes away 10 years later. In this scenario, he would have received annual survival benefits equal to 8% of the Basic Sum Assured (BSA).
Considering the chosen coverage of INR 10,00,000, Mr Mohammed would have received INR 80,000 annually for 10 years until his demise. Upon his death, his family can claim the death benefit, equal to the Basic Sum Assured (INR 10,00,000) plus applicable bonuses.
If Mr Mohammed survives the policy term of 70 years: Assuming Mr Mohammed lives through the entire policy term, he would be entitled to the maturity benefit. The maturity benefit would include the Basic Sum Assured (INR 10,00,000) plus applicable bonuses. Additionally, Mr Mohammed would have also received annual survival benefits starting from the end of the premium paying term until the end of the policy term. Each year, he would be entitled to 8% of the Basic Sum Assured, which, in this case, would amount to INR 80,000 per year.
Thus, the LIC Jeevan Umang Policy provides comprehensive coverage to policyholders like Mr Mohammed. It offers a combination of death benefits, annual survival benefits, and maturity benefits, ensuring financial security for the policyholder and their family throughout the policy term.
To make the terminology related to the LIC Jeevan Umang Policy easier to understand, we have created a comprehensive list of key terms and their explanations below:
- Grace Period: The grace period refers to a designated period of 15-30 days offered by LIC to policyholders who have failed to make a timely premium payment of Jeevan Umang Policy LIC. The policy remains in force during this grace period, allowing the policyholder to pay the premium and avoid policy lapse. If the payment is not made within the grace period, the policy will lapse.
- Free-Look Period: LIC provides a free-look period of 15 days from the date of LIC Jeevan Umang Policy initiation. This period allows the policyholder to review the terms and conditions of the policy thoroughly. If dissatisfied with the policy during this period, the policyholder has the option to cancel it. In such cases, the premium paid will be refunded after deducting certain charges, if applicable.
- Policy Surrender: If the policyholder wishes to terminate the policy, surrendering it is an option. However, the premiums must have been duly paid for two consecutive years to be eligible for surrender. Upon policy surrender, LIC will provide a surrender value, which can be either the special surrender value or the guaranteed surrender value, depending on which is higher. The surrender value represents the amount payable to the policyholder upon surrendering the policy.
- Loan Facility: The policyholder can obtain a loan if they have paid premiums for at least 2 years. If the loan is taken during the premium-paying term, the maximum loan amount is capped at 90% of the surrender value of the policy. On the other hand, the maximum loan amount is limited to 80% of the paid-up value for paid-up policies.
- Paid-up Value: If the life assured has paid premiums for at least 2 years but decides to discontinue further payments, the Jeevan Umang Policy will convert into a paid-up policy. In this case, the sum assured will decrease proportionately based on the remaining unpaid premiums.
For the paid-up sum assured on death, the calculation is as follows:
(Number of premiums paid / total number of premiums to be paid) multiplied by the sum assured on death.
Similarly, for the paid-up sum assured on maturity, the calculation is as follows:
(Number of paid premiums / total number of premiums to be paid) multiplied by the sum assured on maturity.
Exclusions of LIC Jeevan Umang Plan
In the unfortunate event that the life assured dies by suicide, the claim settlement for the policy differs based on the duration of the policy and its revival:
- If the life assured dies by suicide within the first 12 months from the date of policy issuance or revival, the nominees are eligible to claim 80% of the premiums paid until the date of death. This means that the claim amount will be calculated based on 80% of the total premiums paid up to the date of the policyholder's demise.
- However, if the life assured dies by suicide after completing 12 months from the date of revival of the policy, the nominees have the option to claim either 80% of the premiums paid until the date of death or the acquired surrender value (whichever is higher). The surrender value represents the amount that the insurance company will pay upon surrendering the policy. Consequently, in this case, the nominees can choose the higher amount between 80% of the premiums paid or the surrender value as the claim settlement.
Optional Riders Benefit of LIC Jeevan Umang Plan
LIC Jeevan Umang Policy offers additional coverage options called riders, which provide extra benefits and can be chosen by paying an additional premium along with the base policy premium. Here are the riders available -
- Accidental Death and Disability Benefit Rider: If the insured individual accidentally dies or suffers from a disability during the policy period, the nominee is given an extra sum of money. This rider can be added at any time during the policy term by paying an additional premium.
- New Term Assurance Rider: This rider enhances the death benefit in case of the policyholder's demise. It can be selected when the policy is being issued by paying an extra amount. The rider provides coverage for 35 years or until the policy anniversary when the insured person turns 75, whichever comes earlier.
- Accident Benefit Rider: By paying an additional premium, policyholders can opt for this rider at any time during the policy term. It can be added as long as there are at least 5 years remaining in the PPT.
- LIC Premium Waiver Benefit: By selecting this rider, the policyholder ensures that in the unfortunate event of their demise, all future premiums of the policy will be waived. This rider can be particularly beneficial if the life assured is a child and the policyholder is the parent.
- New Critical Illness Benefit Rider: This rider can be chosen at the beginning of the policy period. If the policyholder is diagnosed with any of the 15 critical illnesses specified in the rider, they will receive a payout equal to the critical illness sum assured due to the rider.
Mentioned below are some frequently asked questions (FAQs) related to LIC Jeevan Umang Plan.
Frequently Asked Questions