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  • LIC Plans With Highest Return

    LIC, the state owned insurance company was founded in the year 1956 with an aim to strengthen the life insurance segment of India. It caters to the requirements of a wide customer base with products ranging from insurance and unit plans to micro insurance plans. LIC operates with 2048 fully computerized branch offices, 113 divisional offices, and joins all these establishments through a Metro Area Network. LIC has an average claim settlement ratio of 98.2%, which makes it one of the most trusted insurers in the country.

    Customers these days go after plans that offer higher returns on the premiums paid. LIC offers an endless list of such plans which are designed to offer optimum benefits alongside protection. Given below are the four best insurance policies of LIC which offer a higher return on your money:

    LIC Jeevan Akshay VI:

    LIC Jeevan Akshay VI is an immediate annuity plan which ensures a steady cash flow for a lump sum paid upfront. The annuity as stated under the policy will be paid throughout the lifetime of the policyholder. It comes with a lot of choices with respect to the type of plan and payment modes. The following annuity options are available under Jeevan Akshay VI:

    • Annuity payable at a fixed rate throughout the life of the insured
    • A certain annuity payable for 5, 10, 15, and 20 years
    • Lifetime annuity at a simple rate of 3% per annum
    • Lifetime annuity with a return of purchase price on death of the policyholder
    • Lifetime annuity with an option of 50% annuity payment to the spouse for his/her lifetime, on death of the person insured
    • Lifetime annuity with an option of 100% annuity payment to spouse for his/her lifetime, on death of the person insured
    • Lifetime annuity with an option of 100% annuity payment to spouse for his/her lifetime, on death of the person insured. Additionally, the purchase price of the policy will be returned on death of last annuitant.

    Note that the type of annuity payment once chosen cannot be changed later.

    Annuity Payment Mode:

    You can select the mode of payment while applying for the plan. Based on your chosen mode, the annuity will be paid either monthly, quarterly, half-yearly, or on a yearly basis.

    Features of LIC Jeevan Akshay VI:

    Premium payment mode To be paid as a lump sum
    Minimum purchase price Rs.1 lakh (except online sale) Rs.1.5 lakhs for online purchase
    Maximum purchase price No limit
    Medical examination Not required
    Maximum limits for annuity No limit
    Minimum age at entry 30 years
    Maximum age at entry 85 years
    Proof of age Mandatory
    Maturity benefits Not applicable to the policy
    Income tax benefits
    • Premiums paid under the plan are exempted under Section 80C of the Income Tax Act
    • Pension received will be taxable
    Surrender value Available after completion of one year and it is applicable for the annuity option “annuity with return of purchase price”
    Loan Loan is available under the policy
    Paid-up value Policy will not acquire paid-up value

    Incentives offered under LIC Jeevan Akshay VI:

    For a purchase price of above Rs.2.5 lakhs, the policyholders will receive higher incentives which will be reflected in the annuity. Also, a rebate of 1% proportional to the increase in annuity rate shall be applicable for all policies bought online.

    Service tax:

    Service tax shall be applicable as per the existing Service Tax Laws and it may be revised from time to time. At the time of purchase of the policy, the applicant will have to pay the prevailing service tax.

    Surrender value:

    Policyholders under the annuity option “annuity with return of purchase price” can surrender their policy after one year, under two circumstances.

    1. If they are diagnosed with any of the below mentioned conditions:

    • Cancer of specified severity
    • Heart attack
    • Coronary Artery Bypass Graft (CABG)
    • Motor Neurone Diseases (MND)
    • Open heart valve replacement or repair surgery
    • Kidney failure necessitating regular dialysis
    • Stroke that leaves behind permanent symptoms
    • Major organ/bone marrow transplant
    • Limb paralysis of permanent nature
    • Angioplasty
    • Non-cancerous brain tumor
    • Blindness, deafness, and loss of speech
    • Multiple sclerosis with persisting symptoms
    • Final stage lung disease
    • Final stage liver failure
    • Loss of limbs
    • Major Head Injuries
    • Third degree burns
    • Primary Pulmonary Hypertension

    2. If the annuitant produces evidence of permanently changing his country of residence, then he/she will be paid a surrender value which will depend on their age at the time of surrender.

    Note that the above mentioned conditions of policy surrender are applicable only for the annuity option- “Annuity with Return of Purchase Price”. For all other options, surrender shall not be allowed under any circumstance.

    LIC New Children’s Money Back Plan:

    It’s a non-linked participating plan which is designed to meet the education demands, marriage expenses, and other such financial needs of growing children. Additionally, the plan offers risk cover on the life of the insured child throughout the policy term. Parents or grandparents of children (in the age group 0 to 12 years) can purchase the plan.

    Features of LIC New Children’s Money Back Plan:

    Minimum basic sum assured Rs.1 lakh
    Maximum basic sum assured No limit
    Minimum age at entry 0 years
    Maximum age at entry 12 years
    Age at maturity 25 years
    Policy term 25 minus entry age
    Premium payment mode Yearly, half-yearly, quarterly, monthly (Only ECS), or through SSS mode
    Grace period 1 month for yearly, half-yearly, and quarterly modes and 15 days for monthly mode
    Rebates
    • 2% of tabular premium for yearly mode
    • 1% of tabular premium for half-yearly mode
    • Rs.2 per thousand for every basic sum assured between Rs.2 lakhs to Rs.4.9 lakhs
    • Rs.3 per thousand for basic sum assured above Rs.5 lakhs
    Policy revival A lapsed policy can be revived within a period of 2 years from the date of first unpaid premium
    Optional benefits LIC’s Accidental Death and Disability Benefit Rider

    Benefits under LIC New Children’s Money Back Plan:

    Death Benefits: If the life insured expires before the commencement of risk cover, then a sum equal to the premiums paid which is inclusive of additional premiums and rider premiums shall be payable. But in case the person insured expires after commencement of the risk cover, then the sum assured on death along with simple reversionary bonuses and final additional bonuses shall be paid by LIC. The death benefit in the second case will not be less than 105% of the total premiums paid by the policyholder.

    Survival Benefit: 20% of the basic sum assured shall be payable on each occasion when the life insured completes 18, 20, and 22 years.

    Maturity Benefit: Maturity benefits shall include sum assured on maturity plus vested simple reversionary bonuses and final additional bonuses.

    Profit Participation: The policy shall participate in the profits of LIC and will accrue simple reversionary bonuses from time to time.

    Surrender Value:

    The policy can be surrendered after payment of premiums for three full years from the date of policy inception. The guaranteed surrender value will be calculated as a percentage of the total premiums paid, excluding additional premiums paid for riders. The percentage will also depend on the policy term and the year of surrender.

    Exclusions:

    If the person insured commits suicide within 12 months of the commencement of the plan, then LIC is not liable to pay any of the assured benefits. However, the nominees will be given a sum equal to 80% of the premiums paid. But in case policyholder commits suicide within 1 year from the date of policy revival, then the beneficiary will receive a sum higher than 80% of the premiums paid till death.

    LIC’s New Endowment Plan:

    It is a participating endowment plan that provides the prospective buyer an option to choose the sum assured and the premium payment mode. LIC’s New Endowment Plan offers financial protection throughout the policy term and comes with loyalty additions. The sum assured on death depends on the premiums paid and the maturity benefits are based on the policyholder’s age at entry.

    Features of LIC’s New Endowment Plan:

    Minimum age at entry 8 years
    Maximum age at entry 55 years
    Minimum policy term 12 years
    Maximum policy term 35 years
    Maximum maturity age 75 years
    Minimum basic sum assured Rs.1,00,000
    Maximum basic sum assured No limit
    Minimum accident benefit sum assured Rs.1,00,000
    Premium payment mode Yearly, half-yearly, quarterly, and monthly
    Optional benefits LIC’s Accidental Death and Disability Benefit Rider

    Benefits under LIC’s New Endowment Plan:

    Death benefit: The sum assured on death along with simple reversionary bonuses and final additional bonuses shall be provided on death of the policyholder, provided all due premiums have been paid till date of death. The death benefit shall not be less than 105% of all the premiums paid.

    Maturity benefit: Maturity benefits shall be payable as lump sum and it will include basic sum assured, simple reversionary bonuses, and final additional bonus.

    Profit participation: The policy shall participate in the profits of LIC and will accrue simple reversionary bonuses from time to time.

    Surrender value:

    The policy can be surrendered any time after payment of 3 full years of premium. The guaranteed surrender value will be a percentage of the total premiums paid by the policyholder, excluding premiums paid for optional benefits. The surrender value will also depend on the policy term and the year of policy surrender.

    Loan:

    Depending on the terms and conditions applicable at the time of application, the policyholder can apply for loans once the policy has attained surrender value.

    Exclusion:

    If the policyholder commits suicide within 12 months of the commencement of the plan, then the corporation will not pay any of the assured benefits. However, the nominees will be given a sum equal to 80% of the premiums paid till death. But in case policyholder commits suicide within 1 year from the date of policy revival, then the beneficiary will receive a sum higher than 80% of the premiums paid till death.

    LIC’s New Money Back Plan- 20 years:

    The New Money Back Plan- 20 years is a non-linked plan which comes with a plethora of features. Apart from death benefits, the policy also provides returns at specified durations throughout the term. It protects the family of the insured on his/her death and at the same time offers a lump sum on survival. The plan also extends loan facility to take care of the immediate financial needs of the person insured.

    Features of LIC’s New Money Back Plan- 20 year:

    Minimum basic sum assured Rs.1 lakh
    Maximum basic sum assured No limit
    Minimum age at entry 13 years
    Maximum age at entry 50 years
    Maximum age at maturity 70 years
    Policy term 20 years
    Premium payment term 15 years
    Premium payment modes Yearly, half-yearly, quarterly, and monthly
    Grace period
    • One month for yearly, half-yearly, and quarterly modes
    • 15 days for monthly payment mode
    Optional benefits LIC’s Accidental Death and Disability Benefit Rider

    Benefits under LIC’s New Money Back Plan- 20 year:

    Death benefits: On death of the policyholder when the policy is in full force, the sum assured on death along with simple reversionary bonuses and final additional bonus shall be paid to the beneficiary. The sum assured on death will be higher than 125% of the basic sum assured or 10 times the annualized premium. Also, the death benefit paid shall not be less than 105% of the total premiums paid till death.

    Survival benefits: When the policyholder survives the term, he/she will be paid survival benefits equal to 20% of the basic sum assured at a five year interval starting from 5th policy year onwards.

    Maturity benefits: On maturity of the policy, 40% of the basic sum assured along with simple reversionary bonuses and final additional bonus shall be paid.

    Policy Revival:

    The policy will lapse if premiums payments are discontinued even after the grace period. However, the lapsed policy can be revived within a period of 2 years from the date of first unpaid premium. The revival of riders simultaneously take place during revival of the basic policy.

    Surrender Value:

    If the policyholder has paid premiums for three continuous years, he/she shall be eligible to surrender the policy. The guaranteed surrender value is calculated as a percentage of the total premiums paid by the policyholder, excluding premiums paid for optional benefits.

    Exclusion:

    If the life assured commits suicide within 12 months of the commencement of the plan, then LIC will not consider any claim requests. However, the nominees will be provided a lump sum amount which will be equal to 80% of the total premiums paid. But in case policyholder commits suicide within 1 year from the date of policy revival, then the beneficiary will receive a sum higher than 80% of the premiums paid till death.

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    GST of 18% is applicable on life insurance effective from the 1st of July, 2017

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