LIC Jeevan Labh Policy Benefits
LIC Jeevan Labh is a unique combination of endowment and savings plan offered by the Life Insurance Corporation of India (LIC). It is a non-linked, with-profits, limited premium paying individual plan that provides an attractive combination of protection and savings. This policy caters to various financial needs such as children's education, marriage, or a risk cover for the family. Here, we will explore the key benefits, features, and FAQs of the LIC Jeevan Labh policy, along with an illustrative example.
Key Features of LIC Jeevan Labh
- Limited Premium Payment: Premiums need to be paid only for a limited period while the benefits extend throughout the policy term.
- Combination of Protection and Savings: The policy offers a lump sum amount at the end of the policy term in addition to the death benefit, which ensures both savings and protection.
- Maturity Benefit: On surviving the policy term, the policyholder receives the Sum Assured on Maturity along with vested Simple Reversionary Bonuses and Final Additional Bonus, if any.
- Death Benefit: In case of the policyholder’s demise during the policy term, the nominee receives the Sum Assured on Death along with bonuses.
- Loan Facility: The policy allows the policyholder to take a loan against it after it acquires a surrender value.
- Tax Benefits: Premiums paid under the policy qualify for tax deductions under Section 80C, and the maturity proceeds are tax-free under Section 10(10D).
Benefits of LIC Jeevan Labh
- Maturity Benefit: The policyholder receives the Sum Assured on Maturity along with vested bonuses at the end of the policy term.
- Death Benefit: The nominee receives the Sum Assured on Death plus accrued bonuses, ensuring financial security for the policyholder’s family.
- Bonuses: The policy participates in LIC’s profit and earns Simple Reversionary Bonuses throughout the policy term, enhancing the total payout.
- Liquidity: Policyholders can avail of a loan facility against the policy, providing liquidity in times of need.
- Flexibility: The policy offers flexible premium payment options with terms of 10, 15, and 16 years.
- Tax Savings: Premiums paid qualify for deductions under Section 80C, and the maturity amount is exempt from tax under Section 10(10D).
Example Scenario: Mr. Verma's Investment in LIC Jeevan Labh
To illustrate the benefits, let’s consider Mr. Verma, a 30-year-old professional who purchases a LIC Jeevan Labh policy with a Sum Assured of Rs. 10 lakhs and a policy term of 25 years, with a premium paying term of 16 years.
- Premium Payment: Mr. Verma pays an annual premium of approximately Rs. 52,000 for 16 years.
- Maturity Benefit: On surviving the policy term, he receives the Sum Assured on Maturity (Rs. 10 lakhs) along with vested bonuses. Assuming a bonus rate of Rs. 45 per thousand Sum Assured, the total bonus accrued could be Rs. 4.5 lakhs. Thus, the total maturity benefit would be Rs. 14.5 lakhs.
- Death Benefit: If Mr. Verma passes away during the policy term, his nominee receives the Sum Assured on Death (which is higher of 10 times the annual premium or 125% of the Basic Sum Assured) along with the bonuses accrued up to that point.
The LIC Jeevan Labh policy is an ideal choice for individuals looking for a balanced combination of insurance and savings. With its limited premium payment terms, substantial maturity and death benefits, participation in LIC’s profits through bonuses, and the availability of a loan facility, it provides a comprehensive solution for long-term financial planning. Additionally, the tax benefits under Sections 80C and 10(10D) enhance the attractiveness of this plan.
For IT professionals like Mr. Verma or anyone looking to secure their financial future while ensuring the safety of their family, the LIC Jeevan Labh policy stands out as a reliable and efficient financial product. It not only offers a substantial corpus at maturity but also provides the much-needed financial protection to the policyholder’s family, making it a prudent choice for a secure and prosperous future.
Frequently Asked Questions (FAQs)
Q1: What is the minimum and maximum age to enter the LIC Jeevan Labh policy?
The minimum age at entry is 8 years, and the maximum age at entry is 59 years, depending on the policy term chosen.
Q2: What are the policy term options available?
The policy term options available are 16 years, 21 years, and 25 years.
Q3: What is the minimum and maximum Sum Assured?
The minimum Basic Sum Assured is Rs. 2 lakhs. There is no maximum limit, subject to underwriting conditions.
Q4: Can I avail of the loan facility under this policy?
Yes, policyholders can avail of a loan against the policy once it acquires a surrender value, subject to the terms and conditions of LIC.
Q5: Are there any additional riders available with LIC Jeevan Labh?
Yes, policyholders can opt for additional riders such as the Accidental Death and Disability Benefit Rider, New Term Assurance Rider, and Critical Illness Benefit Rider for enhanced coverage.
Q6: How is the maturity benefit calculated?
The maturity benefit is the Sum Assured on Maturity plus Simple Reversionary Bonuses and Final Additional Bonus, if any, declared by LIC.
Q7: What is the grace period for premium payment?
The grace period for premium payment is 30 days for yearly, half-yearly, and quarterly modes, and 15 days for the monthly mode.
Q8: Can the policy be surrendered?
Yes, the policy can be surrendered after it has acquired a surrender value, which typically happens after paying premiums for three full years.
Q9: What happens if I miss a premium payment?
If the premium is not paid within the grace period, the policy lapses. However, it can be revived within a specified period (usually within 2 years from the date of the first unpaid premium) by paying the outstanding premiums along with interest.
Q10: Are the benefits received from LIC Jeevan Labh taxable?
The premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act. The maturity benefits and death benefits are exempt from tax under Section 10(10D), subject to the prevailing tax laws.
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