In this article, we will explore the various LIC plans available for a 5-year duration, highlighting their features, benefits, and the points individuals should keep in mind while selecting a suitable plan to secure their financial future.
Top LIC Plans for 5 Years
Let’s check out the major LIC policies for 5 years in the following section -
LIC Dhan Sanchay Plan
This is a non-linked and non-participating savings insurance plan that offers financial assistance to the life assured’s family members in case of their untimely demise during the policy tenure. The policy also provides a guaranteed income stream from the maturity date to throughout the payout tenure.
The following are the benefits of this LIC plan for 5 years -
- The death benefit is paid out in lump sum or regular instalments over a span of 5 years based on the payout plan that the life assured selects.
- Maturity benefit is paid out in the form of Guaranteed Income Benefit and Guaranteed Terminal Benefit in case the life assured outlives the policy tenure.
- If the life assured passes away during the payout tenure, the policy provider pays the Guaranteed Income Benefit to the nominee as per the applicable payout method the life assured has selected. This is provided along with the Guaranteed Terminal Benefit.
Listed below are the features of the LIC Dhan Sanchay Plan -
- Riders - With this LIC plan for 5 years, the life assured has the option to choose add-ons like accidental death and disability benefit, premium waiver, new term assurance, accident benefit, and new critical illness benefit.
- Flexible Policy Tenure - If the life assured opts for a level income or an increasing income benefit, the policy tenure can be either 10 years or 15 years. However, if the life assured opts for a single premium level income benefit or single premium enhanced cover with level income benefit, the policy tenure can be 5, 10, or 15 years.
- Premium Payment Methods - The life assured can pay the premium either as a single upfront payment or in instalments on a monthly, half-yearly, quarterly, or annual basis.
- Grace Period - If the life assured pays monthly premiums, they get a grace period of 15 days. However, if the premium payment frequency is quarterly, yearly, or half-yearly, they get a grace period of 30 days.
- Loan Option - The option to avail loan against the policy is also available.
- Free-Look Period - If the life assured is not satisfied with the plan’s terms and conditions, they can return the policy within 30 days from the date of receiving the policy bond by stating the reasons for objections.
LIC New Jeevan Shanti
This LIC insurance plan is an individual, non-linked, and non-participating policy. To get the best advantages of the LIC New Jeevan Shanti plan, the life assured should pay the premium in full or choose either a joint life or a single life deferred annuity.
Mentioned below are the features of the LIC New Jeevan Shanti Plan -
- The life assured can avail of the death benefit under either of the annuity options.
- The death benefits can be paid in instalments to the beneficiary over the selected period of 5 years, 10 years, or 15 years.
- The life assured can also surrender the plan as per their requirements during the policy tenure. Note that the surrender value is usually higher than the special value or assured surrender value.
- The policyholder can avail of a loan facility against the policy after 3 months from the date the policy was issued or after the free look-up period expires.
- No medical examination is required to avail of this plan.
LIC Jeevan Mangal Plan
LIC Jeevan Mangal Plan is designed to secure the finances of the family of life assured in case of the latter’s untimely demise. This micro-insurance plan is an advanced insurance program available at an affordable rate.
Listed below are the features of the LIC Jeevan Mangal Plan:
- Flexible Policy Tenure - The life assured can opt for the policy tenure between 1 year and 15 years if they go for a regular premium payment method. However, if they make a single premium payment they can have the policy tenure of anywhere between 5 years and 10 years.
- Premium Payment Method Options - With the LIC New Jeevan Mangal Plan, the life assured can select the premium payment between a single premium payment mode or a regular premium payment mode. If they opt for the latter, they can pay the premium either monthly, quarterly, half-yearly, or annually.
- High Sum Assured - With the New Jeevan Mangal Plan, the life assured can opt for a sum assured of up to INR 2,00,000.
You can avail of the following major benefits with the LIC New Jeevan Mangal plan:
- Maturity Benefit - If the policyholder survives the policy tenure, a sum equivalent to the premium paid is paid out as a maturity benefit.
- Death Benefit - In case the life assured passes away during the tenure of the policy, a sum equal to the sum assured is paid to the nominee. The amount paid is based on the plan chosen and the premium paid.
- Accidental Death Benefit - An accidental benefit is paid to the beneficiary if the life assured passes away in an accident.
- Tax Benefits - With this LIC plan for 5 years, the policyholder is entitled to tax benefits on the premiums they have paid.
LIC Bhagya Lakshmi
This plan is a microinsurance product from LIC that is specifically designed for individuals belonging to lower-income strata. It is a beneficial plan that works as an investment and saving tool while combining the benefits of an LIC insurance plan.
This is a non-participating, limited payment coverage plan that offers a return of up to 110% of the premium paid (the benefit is paid when the policy matures). The death benefit is paid to the nominee in case the life assured passes away during the policy tenure.
Here are the major features of LIC Bhagya Lakshmi Plan -
- The maximum sum assured is INR 2,00,000.
- Flexible premium payment modes available - single premium or regular premiums (monthly, quarterly, half-yearly, or yearly).
- The LIC Bhagya Lakshmi Plan offers a discount of 2% if the premium is paid annually. In case the premium is paid on a half-yearly basis, there is a 1% rebate.
- The grace period can be extended to up to 60 days from the date when the premium is due.
- No rebate options available if the sum assured is high.
- The minimum premium paying term is 5 years. Note that the minimum policy tenure is 5 years + 2 years, i.e., 7 years.
Mentioned below are the primary benefits of the LIC Bhagya Lakshmi Plan:
- Death Benefit - In case the life assured passes away during the policy period, their nominee will receive a sum equivalent to the sum assured chosen by the former.
- Maturity Benefit - If the life assured survives the policy tenure, they are paid a maturity benefit that is 110% of the total premiums paid during the policy period.
- Surrender Value - The policyholder accrues the paid up or the surrender value in the conditions stated below -
- For plans with a premium paying tenure of lower than 10 years, surrender value is paid after 2 full years of premium is paid.
- For plans with a premium payment period of more than 10 years, the surrender value is payable only after the life assured pays full premiums for 3 months.
LIC Saral Jeevan Bima
LIC Saral Jeevan Bima is a life insurance policy that offers short-period risk coverage. In the event of the policyholder's unfortunate demise within the coverage period, LIC guarantees a payout of the sum assured on death to safeguard the financial well-being of their family members. This plan ensures peace of mind for the policyholder, as it assures them that their loved ones will be shielded from any financial hardships in their absence.
This plan offers a policy tenure ranging from 5 to 40 years, which provides flexibility to suit individual needs. The plan is available for individuals aged 18 to 65 years, encompassing a wide age range. Additionally, the sum assured amount can range from a minimum of INR 5,00,000 to a maximum of INR 25,00,000 to fulfil varying financial requirements.
LIC Jeevan Akshay VII
LIC Jeevan Akshay-VII is a non-linked and non-participating annuity policy for individuals. This LIC policy is not associated with the stock market and provides a fixed annuity rate, 10 options for an immediate annuity, several modes of paying the annuity, and options to purchase the plan digitally or offline.
Listed below are the 10 immediate annuity options under Jeevan Akshay VII:
- Option A - Lifetime
- Option B - 5 years and life insurance afterwards
- Option C - 10 years and life insurance afterwards
- Option D - 15 years and life insurance after that
- Option E - 20 years and life insurance after that
- Option F - Lifetime with the return of the purchase amount
- Option G - With a growth rate of 3% per annum for life insurance
- Option H (Joint Life) - The annuity on the primary annuitant's death transfers to the secondary annuitant for their lifetime, with a 50% payout.
- Option I (Joint Life) - As per the terms and conditions, the annuity will be paid for the lifetime of the annuitants. The full 100% annuity will be disbursed (as per the provision) as long as at least one of the annuitants is alive.
- Option J (Joint Life) - As per the stipulations of this provision, upon the demise of the last surviving individual, the purchase price will be refunded for a lifetime benefit. Furthermore, as long as at least one of the annuitants remains alive, a full 100% annuity will be provided, guaranteeing continuous payment.
The key benefits of each annuity discussed above are discussed in detail here -
- Option A
- The annuity payments will be made in arrears based on the selected payment mode - as long as the annuitant is alive.
- Upon the annuitant's death, the annuity payments will cease.
- Options B, C, D, and E - The annuity payments will be disbursed retrospectively as per the chosen payment mode throughout the annuitant's lifetime. In the event of the annuitant's death, the annuity will be transferred to the nominee(s). If the annuitant passes away within the guaranteed period (5, 10, 15, or 20 years), the annuity payments will continue until the end of the guaranteed period. However, if the annuitant dies after the guaranteed period, the annuity will cease.
- Option F - The annuity payments will be disbursed in arrears (based on the selected payment mode) for the duration of the annuitant's survival. In case of the annuitant's demise, the annuity payments will cease. In this scenario, the purchase price will be paid to the nominee(s) according to the chosen option.
- Option G - The annuity payment will be issued retrospectively provided the annuitant remains alive. Additionally, the annuity payment will increase by 3% per annum for every full policy year completed. However, in the unfortunate event of the annuitant's death, the annuity payment will cease.
- Option H - The annuity payment will be made in arrears as long as the primary annuitant remains alive. In case of the primary annuitant's death, the secondary annuitant will receive 50% of the annuity. However, if the secondary annuitant passes away before the primary annuitant, the latter will continue to receive the annuity. Finally, when both annuitants have passed away, the annuity payments will cease.
- Option I - The annuity payment in this plan will be made in arrears based on the selected mode of payment - as long as at least one of the annuitants or both are alive. However, in the unfortunate event of the last survivor's demise, the annuity payment will cease.
- Option J - The annuity payment, paid in arrears, will continue as long as either of the annuitants is alive. However, in case of the last survivor's death, the annuity payments will stop. Depending on the primary annuitant's chosen option, the purchase price will be returned to the beneficiary/ies.
When discussing life insurance policies, a duration of 5 years is considered relatively short. By selecting one of the top LIC plans for a 5-year term, individuals can benefit from insurance coverage during this limited period. Moreover, policyholders have the option to convert these plans into long-term ones based on their preferences.
It is important to note that LIC does not offer a specific LIC 5-year plan for doubling money and that there is no guarantee of a policy that doubles your investment, regardless of the duration. While using the LIC plan 5 years double money calculator can help estimate returns, it will not result in an investment that doubles your initial amount.