The Jeevan Shagun plan offered by Life Insurance Corporation (LIC) is a money back, single premium policy where high death cover is offered, in case of the policyholder’s untimely demise during the term. The maturity sum assured can be chosen by the policyholder, based on which the premium for the plan is decided. Age is also an important deciding factor for the premium amount. From the date of its launch, the policy will be open for sale for a period of 90 days.
Eligibility Criteria for LIC Jeevan Shagun
In order to purchase this non-linked, close-ended policy from LIC, the individual will have to fulfill the following eligibility criteria:
- Minimum age of policyholder - 8 years (completed)
- Maximum age at entry of the policy - 45 years
Key Features of the Jeevan Shagun Policy
Jeevan Shagun plan provided by LIC is a traditional plan that has a double benefit of savings and protection. Here are some key features of this policy:
|Type of plan||Non-participating traditional life insurance policy that comes with guaranteed benefits|
|Term of the policy||12 years|
|Minimum sum assured||Rs 60,000|
|Maximum sum assured||No limit|
|Premium payment mode||Single|
|Look-in period||15 days|
Benefits of LIC Jeevan Shagun Plan
Jeevan Shagun insurance policy, offered by LIC, comes with a number of key benefits. A few of them have been mentioned as under:
- On maturity of the policy, 65% of the maturity sum assured and loyalty addition is paid to the policyholder.
- The insurance plan also comes with a death benefit. If the life insured dies within 5 years of taking the policy, the basic sum assured, which is 10 times the single premium is paid to the nominee. In case the policyholder dies after 5 years of availing the policy, his nominee will be paid 10 times the single premium along with loyalty addition, as basic sum assured.
- If the policyholder survives the entire policy, he will be paid 15% of the maturity sum assured at the end of the 10th year. 20% of the maturity sum assured is paid at the end of 11th policy year, as survival benefit.
- Loyalty additions are paid in case the policy is active for a minimum of 5 years or the policyholder has survived till its maturity. The additions will depend on the organization’s terms and conditions.
- The life insured can avail a loan against this policy. Loans, given on the basis of policy year and surrender value, are available after one policy year has been completed.
- LIC Jeevan Shagun also has guaranteed surrender value, where 75% of the single premium is reimbursed if the plan is surrendered within one year from the date of the policy’s issuance. In case the policyholder gives up the insurance plan after the first year, around 90% of the single premium is repaid.
- There is a free look-in period for a duration of 15 days. In case the policyholder is dissatisfied with the insurance plan, the single premium amount, after deducting stamp duty charges incurred on reports and medical examination, is reimbursed.
- Insurance premiums up to Rs 1,50,000 are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The maturity proceeds of this plan are exempted from tax under Section 10 (10D).
How does the Jeevan Shagun Policy Work?
Let us take the case of Mr. Kapoor who is a non-smoker. Aged 30, Mr Kapoor buys the Jeevan Shagun policy worth Rs 60,000 for a duration of 12 years. He pays Rs 31,275 as single premium every year. Five years after the policy has been taken, Mr. Kapoor meets with an accident and dies. The Corporation, on his death, pays his nominee Rs 3,12,750 (10 times the single premium) as death benefit.
The payment mode for this insurance plan is single premium. The premium is decided on the basis of age of the life insured, term of the policy, and chosen sum assured.
LIC Jeevan Shagun policy comes with LIC Accident Benefit Rider, on paying extra sum assured.
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GST of 18% is applicable on life insurance effective from the 1st of July, 2017