LIC Jeevan Rakshak Plan

LIC Jeevan Rakshak offers the following benefits to the prospective policyholder -

Maturity Benefit - The Basic Sum Assured along with Loyalty Additions (if any) are paid in a lump sum amount to the policyholder on survival at the end of the policy term. This is applicable only if all premiums have been duly paid.

Death Benefit - In case of the death of the policyholder within the term of the policy, a 'Sum Assured on Death' is payable which is the highest of

1. Basic Sum Assured 
2. 10 times of the annualised premium
3. 105% of all the premiums paid as on date of death

The above benefits are not inclusive of service tax, extra premiums or optional rider benefits, if any.

In case of the death of the policyholder after the 5th year of the policy term, Loyalty Additions, if any, will also be payable.

Participation in Profits - If the policy is in full force, then based on the discretion of the Corporation, the policy might be eligible for Loyalty Additions. The rates and amount for the same are decided by the Corporation and are paid out at the completion of the 5th year on the death of the policyholder or after the maturity of the policy on the survival of the policyholder.

Optional Benefit - An optional benefit can be availed through the LIC's Accident Benefit Rider that makes the policy a comprehensive one. Requiring an extra premium to be paid, this benefit is payable as a lump sum along with the death benefit on the accidental death of the policyholder.

Tax Benefit - Premiums up to Rs. 1,50,000 paid under this policy are admissible for deduction from taxable income under section 80C and the maturity proceeds are tax free as per section 10D, subject to fulfillment of specific terms and conditions.

Eligibility Conditions for LIC Jeevan Rakshak

The policy and the optional rider have a set of rules which constrain its availability to prospective policyholders. They are mentioned as below -

1. Basic Plan (Jeevan Rakshak) - Per healthy life without undergoing medical examinations
2. Basic Sum Assured -
3. Minimum - Rs. 75,000
4. Maximum - Rs. 2,00,000
5. Basic Sum Assured shall only be in multiples of Rs. 5000
6. Age criteria -
7. Minimum (at entry) - 8 years (completed)
8. Maximum (at entry) - 55 years (nearest birthday)
9. Maximum (at maturity) - 70 years (nearest birthday)
10. Policy Term -
11. Minimum - 10 years
12. Maximum - 20 years
13. Optional Rider (LIC's Accident Benefit Rider)
14. Accident Benefit Sum Assured -
15. Minimum - Rs. 75,000
16. Maximum - Amount equalling the sum assured in the basic plan, subject to a maximum of Rs. 50 lakh that includes accident covers from all other policies linked to the same individual
17. The Accident Benefit Sum Assured shall be in multiples of Rs. 5000 only
18. Age criteria -
19. Minimum (at entry) - 18 years (completed)
20. Maximum (at entry) - any, during any anniversary of the basic policy during the basic policy term
21. Maximum (Cover Ceasing Age) - Same as the basic policy

Payment of Premiums

Premiums for the LIC Jeevan Rakshak Policy can be paid in yearly, half-yearly, quarterly or monthly modes. The payment in the monthly schedule can only be done through ECS facility. Rebates are applicable for yearly and half-yearly modes of payment at 2% and 1% of the Tabular Premium and a 1.5% rebate is applicable for premiums worth Rs. 1,50,000 and above.

A grace period of a month (not less than 30 days) is allowed for yearly and half-yearly payments of premiums, while only 15 days are admissible for monthly payments.

A sample of annual premium rates (not inclusive of service tax) per Rs. 1000 of the sum assured is as follows -

Additional Information about LIC Jeevan Rakshak

Revival of Policy - In case premiums haven't been paid within the grace period, the policy lapses. It can be reinstated within a period of 2 consecutive years by paying all the arrears of the unpaid premiums and the consequent interest on the same compounded half-yearly. The period of 2 consecutive years is calculated from the date of the last unpaid premium to prior the date of maturity.

The Accident Benefit Rider, if opted for revival, will also be considered in conjunction with the base policy and not individually.

Paid-up Value - If in case, three years' worth of premiums have been duly paid and the premium payment is then discontinued, the policy continues as a paid-up policy. The Basic Sum Assured will be of a lesser value by the calculation Paid-up Sum Assured = Basic Sum Assured x (No. of premiums paid/No. of premiums payable).Paid-up Sum Assured is provided at the maturity of the policy or at the death of the policyholder, whichever is first.

Accident Benefit Rider's benefits will cease as it doesn't acquire any paid-up value.

Surrender Value - The policy can be surrendered while opting for cash only if at least three years' premiums have been duly paid. The Guaranteed Surrender Value shall be a percentage of total premiums paid (net of service tax) excluding extra premiums and the premiums of the Accident Benefit Rider. This percentage is subject to the policy term and the policy year in which the policy was surrendered and will be decided by the Corporation.

There could be a Special Surrender Value which can be paid by the Corporation, if deemed more favourable to the policyholder.

Loans - Loans can be availed under the policy if it has acquired a surrender value. The terms and conditions for the loan will be decided by the Corporation.

Exclusions

The policy will be rendered invalid if the life assured commits suicide within a period of 12 months from the date of the commencement of the risk. In that case only 80% of the amount of the total premiums paid (excluding taxes), extra premium and Accident Benefit Rider (if any) will be paid.

How Does LIC Jeevan Rakshak Work

LIC Jeevan Rakshak has a maximum policy term of 20 years and its premium payment term is equal to its policy term. The premium payable varies as per the age of the prospective policy holder, the term of the policy and the chosen Sum Assured. Taking these into consideration, if

1. Policy Term = 15 years
2. Sum Assured = 1,00,000
3. Premium Payment Term = 15 years

then, considering Mr. Kaushal (Age - 30 years), Mr. Binayak (Age - 40 years) and Ms. Susheela (Age - 50 years) apply for this policy, the sample premiums payable by them would be -

1. Mr. Kaushal - Rs. 5235
2. Mr. Binayak - Rs. 5370
3. Ms. Susheela - Rs. 5780

The policy can be availed by contacting registered LIC offices around India or through licensed agents and brokers of LIC. Medical reports are not a requisite for this policy as it mandates the coverage of only healthy individuals. Proposal form 300, a passport size photograph, address and age proof will have to be submitted during the time of application.

This policy is of a shorter time frame (20 years) and the maximum entry age is 55 years. While tax benefits are applicable on the policy, it can only be considered a fringe benefit to the actual cover it provides. As an investment option, this policy doesn't stand too bright.