Life Insurance is an agreement allying the policy owner and the insurance corporation, where the life agency pays a specific amount to the insured individual’s family upon his/her death. The life insurance amount is paid by trading for a specific amount of premium monthly, quarterly, or on a half-yearly basis. LIC Jeevan Rakshak is one such great policy introduced in the year 2014.
- Life Insurance Corporation of India (known to many as LIC) is the insurance meaning safeguarding and investment group owned by the Indian government. It provides services like Life insurance, health insurance, investment management banking, and mutual fund.
LIC’s Jeevan Rakshak Plan is a non-linked, endowment plan which provides an amalgamation of support and reserves. This plan offers financial protection for the family in case of the unfortunate and untimely demise of the policyholder any time before maturity, and a calculated amount is served at the time of maturity for the surviving policyholder. This plan also offers services of immediate liquidity needs using its loan facility. It is an outstanding option for low-income batch and even for lower-middle-class families. Also, it is pretty much the only insurance pack with an assured sum of 1 lakh making it affordable.
Functioning Of LIC Jeevan Rakshak Policy
When purchasing the policy, the client has to select the following things:-
1. Basic Sum Assured – This is the cover money that client wants. This sum can be among the estimated amount of 75,000 to 2, 00,000.
2. Policy Term – This is the period for the maturity of the policy. The client pays premiums in this period. This duration can be anywhere between 10 to 20 years.
3. Premium Payment Term – It is equivalent to the policy term.
Based on the factors such as basic sum assured, your age, and the policy term is selected and one’s annual premium is established.
Features of LIC Jeevan Rakshak
i. This plan has a low coverage facility and can be taken only for the highest sum assured of Rs. 2, 00,000.
ii. The least amount of sum for this policy is INR 75,000, and the highest can be Rs. 2, 00,000. The basic sum assured needs to be in the multiples of INR 5,000.
iii. The policy can be selected from the term of 10 to 20 years, and one of the 4 payment modes can be selected monthly, quarterly, half-yearly, and yearly.
iv. This plan is eligible to get loyalty addition after 5 years of the policy term.
v. The plan also provides the choice of adding accidental death of the rider.
vi. If the insurer dies before the maturity of the policy, the nominee receives the death benefit. With full sum assured amount.
Reasons To Choose LIC Jeevan Rakshak Policy
- Premiums paid are quite low.
- The assured sum is low but affordable for all.
- Accidental death is also included, which is a great benefit.
- The loan is also allowed on the scheme.
- Loyalty addition is also a benefit after maturity or death.
- The death benefit, if the client dies.
Benefits of LIC Jeevan Rakshak Plan
1. Maturity Benefit:
It is the benefit given to the policyholder if he/she survives the term of this policy under the condition that all the premiums are paid on time. The final sum will be:-
- Basic Sum Assured
- Loyalty Additions
2. Death Benefit:
Death benefit is an outstanding benefit in this scheme. If the client has an untimely death during the term or within the period of the policy, then the plan assures:-
- Basic sum assured.
- 10 times the amount of annualized premium or 105% of all premium paid up till the death.
- Loyalty addition, which is added after 5 years of policy term along with all other assurances.
3. Profits By Participation:
More profit can be earned through investing while in the term policy. The policy has to be at least 5 years old for claiming the benefits through loyalty addition. The payment of loyalty addition is only rewarded on death (after 5 years of policy) or on maturity.
4. Income Tax Benefits:
All the premiums paid and received in this plan are beneficial and subject to income tax rebate under section 80C and 10D of the income tax act.
5. LIC’s Accidental Death:
After the age of 18, accidental deaths can be added to the base plan. The rider can avail the assistance in case of accidental death in between the term of the policy.
Example Of LIC Jeevan Rakshak
Ashish Singh, having an age of 30 years, has bought this LIC Jeevan Rakshak policy for 20 years with a sum assured of 2 lakhs having payment tenure for 20 years. According to the given data above, he will pay the premium of 6746 + tax (GST).
If Ashish survives the tenure then he will be eligible to receive sum assured amount + loyalty additions as assured by LIC.
Sum assured= 2 lakhs + loyalty additions
If Ashish dies after 2.5 years of acquiring the policy, then his nominee will be given a sum assured + 10time the annual premium.
Sum assured= 2 lakhs
10 times the annual premiums = 10 times 6746=67460 rupees
Since 5 years were not completed, no loyalty additions are given.
If Ashish dies 12 years after acquiring the policy, the nominee gets 2 lakhs rupees + 67, 460 + loyalty additions earned.
In some cases, 105% of the total premium is also given, which means if Ashish dies after 2.5 years, the nominee also receives 105% times 2.5 times 6746= 28333 rupees.
And if he dies after 12 years, the nominee receives 105% times 12 times 6746 = 1,06,250 rupees.
Requirements For Buying LIC Jeevan Rakshak Policy
- Application form filled with the policy
- Total medical history of client
- KYC Documents (Pan Card, Aadhaar Card, Photo ID proof, etc.…)
- Proof of address and birth
Tax Details On Jeevan Rakshak Policy
All the premiums that are paid during the tenure are exempted from taxation under Section 80C of the Income Tax Act.
ii. Maturity Claim
The claim after the maturing of the policy is also exempted from tax under Sec 10 of the Income Tax Act.
iii. Death Claim
Claims due to untimed death are also fully exempted from the taxes.
Other Details of LIC Jeevan Rakshak Plan
1. Revival Period:
If premiums are not paid for some reason, the policy goes dormant and can be renewed within 2 years of the first unpaid premium.
2. Free Look Period:
The policy can be canceled, and the amount of premium paid will be returned minus the expenses incurred within the first 15 days of the plan from the date of receipt of the policy bond. The policy can be returned to the insurance company with an acceptable reason for canceling.
3. Surrender Value:
If one surrenders a plan before 3 years of the policy, no amount is given back to the client. Surrender value is built up after 3 years of activating the policy and can be claimed thereafter.
4. Loan On Policy:
Loan can be picked upon this policy once it is more than 3 years old. Terms and conditions are still applied.
Other Similar Policies By LIC
i. LIC New Jeevan Anand
This plan usually provides financial aid against death throughout the life of an individual with the provision of payment if the client survives at the end of the tenure.
It also offers multiple options like a loan, investing which are subject to some provisions.
Also, it keeps providing coverage until the death of the client even after the maturity of the policy.
Bonuses are also given at the end of the tenure of the policy.
ii. LIC’s e-Term Plan
This plan is simple and can be bought even online. It is a general life insurance plan covering untimely death and provides financial support.
Key features of the policy
- Low premiums with high sum assured.
- It is without maturity benefit.
- Accidental deaths are also covered.
iii. LIC’s Jeevan Lakshya Plan
It offers insurance coverages along with savings too. This policy is an endowment plan having an increased death benefit.
Features of this endowment policy are as follows
- The nominee gets a sum assured amount and the loyality gratuity as an extra payment if the policyholder dies. This is possible if he has completed 5 years of the policy.
- This policy holds other benefits also.
- The bonus might be claimed if investing is done too.
iv. LIC Jeevan Shiromani Plan
This is a money-back plan for people with high net worth, meaning it is a plan for rich individuals as it assures a large amount of money payback as the sum assured. The USPs include the following –
- Loyalty additions and assured other benefits are added to the policy, which intensifies them.
- The option of immediate liquidity is also available.
- It covers critical illness too. This can be claimed in emergencies.
- 4 accidental deaths are covered in this policy.
- The benefits of death or maturity can be taken in installments.
v. LIC’s Jeevan Shanti Plan
This is a pension plan for older members of society. The plan provides you with the choice of selecting a delayed retirement option or an immediate annuity option. Each option further offers a range of payment options that can be chosen. The USPs of the plan is as follows
- The total amount to be paid for the policy can be availed on a single-life or a joint life basis.
- The benefits upon death can be claimed or withdrawn as a one-time payment altogether or in installments as a lump sum as selected by the holder or the spouse.
- A policy loan is also available and can be claimed under this policy.
Frequently Asked Questions
1. What happens if a person stops paying the premium?
2. Does the LIC Jeevan Rakshak policy offer any surrender benefit?
3. Can we take a loan against this policy?
4. Are there any death benefits given in this policy?
5. How many accidental riders are insured ion this policy?
6. What is the difference between LIC Jeevan Rakshak and LIC Jeevan Anand policy?
In Jeevan Rakshak coverage is not provided once the policy ends while in Jeevan Anand coverage is provided even after the maturity of the policy.
7. Does this policy hold any grace period?
Though fewer sums but LIC Jeevan Rakshak policy is an assured life insurance policy with all the maturity benefits. The plan provides financial support through savings for loved ones of the client. The support can also be increased with the benefit of accidental death benefit rider. It is an outstanding and money-saving policy by Life Corporation of India, especially for the low-income category or for low sum assured needs of a person.