LIC Jeevan Pragati

Life Insurance is considered a significant investment to make but to choose which one out of the many that exist also poses a problem. LIC or Life Insurance Corporation of India was formed for this very reason. Launched on February 3, 2016, LIC Jeevan Pragati Plan is an endowment policy that does not depend on the share market. It offers both protection and savings. This policy is meant for those looking to save for their retirement and want to get an insurance cover against death. This plan stands out because its Sum Assured on Death automatically increases after every 5 years. In this article, we pick apart this scheme to understand if it is meant for you.

Features Of LIC Jeevan Pragati

i. The minimum sum assured amount is 1.5 Lakhs.

ii. There is no maximum sum assured amount.

iii. The assured sum on maturity is in multiples of 10,000

iv. Automatically, the risk cover is increased every five years.

v. The minimum age at entry is 12 years, and the maximum age is 45 years.

vi. Policy term exists for 12 to 20 years.

vii. The maximum maturity age is 65 years.

viii. There exist four payment modes; monthly, quarterly, half-yearly, and yearly. The policyholder can choose from these available.

ix. At maturity, the policyholder is eligible for a Simple Reversionary Bonus along with a Final Additional Bonus.

x. This policy gives the choice of adding accidental death and disability benefit rider.

Who Should Invest In LIC Jeevan Pragati?

Insurance seekers in the age group of 12 to 45 years are ideal candidates for this policy. It is best for those who want to save to meet long-term goals because of its good saving option. Some services like claim history, online payment of premium, and premium history are offered to the policyholder. The policy saves the policyholder from inflation but does not give a high rate of interest.

Benefits Of LIC Jeevan Pragati

1. Maturity Benefit

If the policyholder outlives their policy and has paid all their premiums, they are eligible for Maturity Benefit. This is calculated by adding, Sum Assured on Maturity + Simple Reversionary Bonus + Final Additional Bonus.

2. Death Benefit

In the event of the policyholder’s death, the nominee or the beneficiary is provided with this benefit. If all premiums are paid with no balance payments left, the death benefit is calculated by adding, Sum assured on Death + Simple Reversionary Bonus (received till date) + Final additional Bonus (if any)

An in-depth explanation of the terms used in the above two points

i. Sum Assured On Death

The amount you are destined to, which depends on the number of years the policy has been active. The Death benefit is higher than 10 times the amount paid till death. It is calculated as-

ii. Simple Reversionary Bonus

The amount of bonus you are eligible to. This is declared every year by LIC and thus is subject to change every year.

iii. Final Additional Bonus

The one-time bonus which is available at the end of the policy term. This bonus is usually reserved for policy terms greater than 15 and is also considered a loyalty bonus.

3. Tax Benefits

This insurance policy does benefit from income tax. Section 80c makes the premiums paid tax-free. The amount granted at the end of the tenure is also tax-free under Section 10 (10D)

4. Rider Benefit

The policyholder can add Accidental Death and Disability Benefit to their basic policy by paying a little extra. This would act as a cover, and the nominee would receive an additional benefit if the policyholder dies in an accident or suffers from a disability.

5. Free Look Period

The policyholder has 15 days to decide if this policy is for them. If they are not happy, this policy can be returned to the bank stating the reasons for objections.

6. Participation In Profits

The policy will participate in the profits of the Bank and will receive bonuses from time to time.

7. Revival Period

This policy allows you to revive your policy if lapsed due to unpaid premiums.

8. Surrender Value

If you stop paying the premiums, you have the option of surrendering your plan and getting a Surrender Value as a payout. This is possible only if 3 years’ worth of premium has been paid.

9. Loan On Policy

The policyholder is eligible to take a loan on the policy. This is possible only after payment of 3 years of premium.

Payment Methods Of LIC Jeevan Pragati

This policy allows for four payments; yearly, half-yearly, quarterly, and monthly, which can be paid through ECS or salary deductions.

This policy offers a grace period of-

• 30 days for payments of yearly, half-yearly, and quarterly mode of payment
• 15 days for monthly mode of payment

If payment of premiums is not made within the offered grace period, then the policy will lapse. The policy can be revived within two years from the unpaid premium date but before the maturity date. This can be done so by paying the outstanding payments along with interest. The interest rate is fixed by the Bank at the time of payment and is based on evidence of continued payments in the future.  The Bank also reserves the right to accept the original terms, the revised terms, or even refuse the policy’s revival.

Rebates On LIC Jeevan Pragati

LIC Jeevan Pragati policy offers rebates or partial refunds to policyholders. These refunds depend on the Basic Sum Assured (B.S.A.) and are as follows.

Explanation Of The Plan With An Example

Let us take an example of Ms. Rama buying the LIC Jeevan Pragati Policy with the following details.

• Sum Assured- 10 lakh
• Policy term- 20 years
• Policy purchase year- 2020
• Age- 27

This, she will be paying a yearly premium of 48,757.

After purchasing this plan, two cases are possible with Ms. Rama. She can either outlive her policy term and avails the Maturity Benefit, or she passes away, and her nominee avails the Death Benefit.

1. Maturity Benefit

Assuming that Ms. Rama survives her policy term,

2. Death Benefit

Assuming that Ms. Rama passed away peacefully 18 years from the purchase date, her nominee will get the death benefit of-

This Death Benefit of Ms. Rama will depend on the year of her death and how she passes away.

Other LIC Life Insurances

LIC is the first name that comes to one’s mind when thinking of life insurance. But even in LIC, the plethora of insurances offered can be intimidating. To make the process a little simpler, and to choose the best LIC policy, here we have combined some similar life insurance plans-

1. LIC Jeevan Pragati Vs LIC New Endowment

• For Jeevan Pragati, the maximum age can be 45 years, and for New Endowment, it is 55 years.
• Maturity age – Jeevan Pragati Plan’s maximum maturity age is 65 years, while New Endowment Plan’s is 75 years.
• Policy term- Jeevan Pragati Plan’s policy term is from 12 to 20 years, and New Endowment is 12 to 35 years.
• Sum Assured- Jeevan Pragati assures 1.5 Lakh and above (in multiples of 10,000) while New Endowment offers 1 Lakh and above (in multiples of 5,000)
• Loan on policy- Both are eligible for the loan after 3 years of payment
• Benefits- Both have the same Maturity and Death benefit

2. LIC Jeevan Pragati Vs LIC Jeevan Labh

• Basic Sum Assured- The minimum for Jeevan Pragati is 1.5 Lakh, and for Jeevan Labh, it is 2 Lakh. Both have no limits.
• Policy term- Jeevan Pragati Policy’s term is from 12 to 20 years while Jeevan Labh Policy’s term is 16, 21, or 25 years.
• Age restriction- The minimum age to be eligible for Pragati is 12, and the maximum is 45. The minimum age for Labh is 8, and the maximum is 59.
• Maximum age at maturity- The maximum age at maturity for Pragati is 65 and for Labh is 75
• Payment mode- Pragati can be paid through ECS or salary deductions while Labh can only be paid through ECs.
• Policy revival- Both the policies will lapse if the premium is not paid within the grace period
• Death Benefits- For both, the death benefits shall not be less than 105% of the total premium.

3. LIC Jeevan Pragati Vs LIC Jeevan Anand

• Basic Sum Assured- The minimum for Jeevan Pragati is 1.5 Lakh, and for Jeevan Anand, it is 1 Lakh. Both have no limits.
• Policy term- Jeevan Pragati Policy’s term is from 12 to 20 years while Jeevan Anand Policy’s term is 15 to 35 years.
• Age restriction- The minimum age to be eligible for Pragati is 12, and the maximum is 45. The minimum age for Anand is 18, and the maximum is 50.
• Maximum age at maturity- The maximum age at maturity for Pragati is 65 and for Anand is 75
• Payment mode- Pragati can be paid through ECs or salary deductions while Anand can only be paid through ECs.
• Policy revival- Both the policies will lapse if the premium is not paid within the grace period.
• Death Benefits- For Jeevan Pragati, death benefits shall not be less than 105% of the total premium, and for Jeevan Anand, it will not be less than 125%

4. LIC Jeevan Pragati Vs LIC Jeevan Rakshak

• Basic Sum Assured- The minimum for Jeevan Pragati is 1.5 Lakh, and for Jeevan Anand, it is 75,000. There is no maximum for Pragati, but it is 2 Lakh for Rakshak.
• Policy term- Jeevan Pragati Policy’s term is from 12 to 20 years while Jeevan Rakshak Policy’s term is 10 to 20 years.
• Age restriction- The minimum age to be eligible for Pragati is 12, and the maximum is 45. The minimum age for Rakshak is 8, and the maximum is 55.
• Maximum age at maturity- The maximum age at maturity for Pragati is 65 and for Rakshak is 70.
• Payment mode- Pragati can be paid through ECs or salary deductions, while Rakshak can only be paid through ECs.
• Policy revival- Both the policies will lapse if the premium is not paid within the grace period.
• Death Benefits- For both, the death benefits shall not be less than 105% of the total premium.

5. LIC Jeevan Pragati Vs LIC Jeevan Lakshya

• Basic Sum Assured- The minimum for Jeevan Pragati is 1.5 Lakh, and for Jeevan Lakshya, it is 1 Lakh. There is no limit.
• Policy term- Jeevan Pragati Policy’s term is from 12 to 20 years, while Jeevan LakshyaPolicy’s term is 13 to 25 years.
• Age restriction- The minimum age to be eligible for Pragati is 12, and the maximum is 45. The minimum age for Rakshak is 18, and the maximum is 50.
• Maximum age at maturity- The maximum age at maturity for Pragati is 65 and for Lakshya is 65.
• Policy revival- Both the policies will lapse if the premium is not paid within the grace period.
• Death Benefits- For both, the death benefits shall not be less than 105% of the total premium.

FAQs

Conclusion

LIC has been one of the most reliable and trusted insurance companies for a long time. This endowment plan, like many others, is a perfect option for life insurance. Given this article is all the details, one would need to choose if LIC Jeevan Pragati is the life insurance.