LIC Jeevan Lakshya Policy: A Comprehensive Guide for Securing Child Education
The LIC Jeevan Lakshya policy is a participating non-linked plan designed to offer a combination of protection and savings. One of its primary aims is to ensure financial security for the policyholder's family and guarantee that a child’s education and other needs are met even in the policyholder's absence. This makes it an ideal plan for parents who want to secure their children's future.
Key Features of LIC Jeevan Lakshya
- Maturity Benefit: At the end of the policy term, the policyholder receives the Sum Assured on Maturity along with any vested Simple Reversionary Bonuses and Final Additional Bonus, if any.
- Death Benefit: In case of the policyholder’s death during the policy term, the nominee receives annual income benefits and a lump sum amount at the end of the policy term.
- Premium Payment Term: The premium payment term is 3 years less than the policy term. For example, if the policy term is 25 years, the premium needs to be paid for 22 years.
- Bonus Facility: The policy participates in LIC’s profit and earns Simple Reversionary Bonuses throughout the policy term.
- Loan Facility: Policyholders can avail of loans against the policy 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 Lakshya
Child Education and Financial Security:
- One of the primary aims of the LIC Jeevan Lakshya policy is to ensure that the policyholder's children have the financial resources necessary for their education and other needs. In case of the policyholder's untimely demise, the policy provides annual income benefits that can be used to cover educational expenses.
Death Benefit:
- If the policyholder passes away during the policy term, the nominee receives an annual income benefit of 10% of the Basic Sum Assured from the date of death until the policy term ends. Additionally, a lump sum payment of the Sum Assured on Death, along with bonuses, is made at the end of the policy term.
Maturity Benefit:
- Upon survival till the end of the policy term, the policyholder receives the Sum Assured on Maturity, which is equal to the Basic Sum Assured, along with any vested Simple Reversionary Bonuses and Final Additional Bonus.
Premium Waiver:
- In case of the policyholder’s death during the policy term, all future premiums are waived off, ensuring that the family does not face any financial burden while the policy continues to provide benefits.
Bonus Addition:
- The policy earns Simple Reversionary Bonuses during the policy term, which are payable along with the maturity benefit or death benefit, enhancing the overall returns.
Tax Benefits:
- Premiums paid towards the policy qualify for deductions under Section 80C of the Income Tax Act. Additionally, the maturity and death benefits are exempt from tax under Section 10(10D), making it a tax-efficient investment.
Example Scenario: Mr. Gupta’s Investment in LIC Jeevan Lakshya
Let’s consider Mr. Gupta, a 30-year-old individual who buys the LIC Jeevan Lakshya policy with a Basic Sum Assured of Rs. 10 lakhs and a policy term of 20 years, with a premium paying term of 17 years.
- Premium Payment: Mr. Gupta pays an annual premium of approximately Rs. 55,000 for 17 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 around Rs. 4.5 lakhs. Thus, the total maturity benefit would be Rs. 14.5 lakhs.
- Death Benefit: If Mr. Gupta passes away during the policy term, his nominee receives an annual income benefit of Rs. 1 lakh (10% of Rs. 10 lakhs) until the end of the policy term. Additionally, at the end of the policy term, the nominee receives the Sum Assured on Death (which is higher of 125% of the Basic Sum Assured or 10 times the annual premium) along with accrued bonuses.
Frequently Asked Questions (FAQs)
Q1: Who is eligible to buy the LIC Jeevan Lakshya policy? A: Individuals aged between 18 and 50 years can buy the policy, with a maximum maturity age of 65 years.
Q2: What are the policy term options available?
A: The policy term options available range from 13 to 25 years.
Q3: What is the minimum and maximum Sum Assured?
A: The minimum Basic Sum Assured is Rs. 1 lakh, with no upper limit, subject to underwriting conditions.
Q4: Can I avail of a loan against the LIC Jeevan Lakshya policy?
A: Yes, policyholders can avail of a loan against the policy once it acquires a surrender value, subject to LIC’s terms and conditions.
Q5: Are there any additional riders available with LIC Jeevan Lakshya?
A: 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 are the bonuses declared for LIC Jeevan Lakshya?
A: Bonuses are declared annually by LIC based on the corporation’s profit performance and are added to the policy.
Q7: What happens if I miss a premium payment?
A: 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.
Q8: Can the policy be surrendered?
A: Yes, the policy can be surrendered after it has acquired a surrender value, which typically happens after paying premiums for two full years.
Q9: Are the benefits received from LIC Jeevan Lakshya taxable?
A: 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.
Q10: How does the policy help in securing my child's education?
A: The policy ensures a steady income stream in the form of annual income benefits in case of the policyholder’s death, which can be used to cover educational expenses. Additionally, the maturity benefit provides a lump sum amount that can be utilized for higher education or other significant financial needs.
The LIC Jeevan Lakshya policy is a versatile financial product designed to cater to the dual needs of insurance and savings. It ensures that the policyholder’s family, particularly children, are financially secure even in the unfortunate event of the policyholder's demise. With its unique combination of annual income benefits, lump sum payouts, and bonus accruals, the policy provides a comprehensive financial safety net.
For parents like Mr. Gupta, the LIC Jeevan Lakshya policy offers peace of mind by guaranteeing that their children’s educational and other financial needs will be met regardless of life’s uncertainties. By integrating robust insurance coverage with attractive savings features and tax benefits, this plan.
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