The LIC New Jeevan Anand Policy is a non-linked participating plan that offers an appealing combination of protection and savings. This plan provides financial protection against death for the policyholder’s whole life, with the option of receiving a lump sum payment at the conclusion of the policy term if the policyholder survives.
With the lending facility, it also takes care of liquidity requirements. It’s a classic savings and insurance policy that provides protection in the event of a disaster. The plan is in place to offer the necessary financial assistance in the event of the insured’s death. It also provides a lump sum payment in the event of survival at the end of the policy’s term. It is one of LIC’s most popular endowment plans. As a result, the plan is a combination of endowment and whole life insurance.
LIC Jeevan Anand Policy’s major features
Below given are the LIC Jeevan Anand Policy main features:
- Even after the plan’s maturity, a whole life insurance policy continues to provide coverage until the insured’s death.
- The policyholder has the option of paying their premiums on a regular basis.
- It includes basic reversionary incentives to boost the amount of money paid out at maturity or earlier death.
- The maturity benefit is the sum assured plus any bonus, and the life insurance lasts until death.
- After the policy matures, the death benefit is merely the sum assured.
- The sum assured plus the ensuing bonus is the death benefit if you die before the policy matures.
- Extra accidental death and disability benefit rider that provides additional benefits in the event of an accident or disability until the policyholder’s 70th birthday.
- If the plan obtains a surrender value, loans can be taken
- Premium discounts are available if you choose a high level of sum assured and pay premiums annually or semi-annually.
- It is not permitted to change the policy.
- Tax exemption on premiums paid under Section 80C and claims for death or maturity benefits provided under Section 10(10D) of the Income Tax Act of 1961.
Benefits of the policy:
Following are the major benefits of LIC Jeevan Anand policy:
- Death benefits.
The death benefit is based on the insured’s death year:
- The sum assured and accumulated bonuses are paid to the nominee if the insured dies during the policy term.
- The higher of 125 percent of the basic sum promised as per policy terms or -10 times the yearly premium is the money assured on death payable nominee.
- At least 105 percent of the total premiums due on the day of death
- Service tax, extra premiums, and rider premiums, if any, are not included in the above premiums.
- If the insured dies before the plan’s term is up and the maturity benefit has been paid, the basic sum assured is given to the nominee, and the plan is terminated.
- Maturity benefit: If the insurance holder lives to the end of the policy term, the basic sum assured, plus any collected bonuses, is paid to the insured as a maturity benefit once the policy years are completed.
For example, if a 35-year-old invests Rs.25 lakh in LIC New Jeevan Anand, he will receive the following benefits.
- According to LIC’s new Jeevan Anand rate of return will be 3.56 percent, according to the parameters.
- The total sum will be 40.66 lakhs rupees.
- The year of benefit will be the 25th year.
- Rebate: LIC is known for providing its customers with a variety of benefits in the form of rebates. Below are the rebates under this plans-
- 1.50%-3% if the sum assured is rs.2 lakhs or above
- 2% for yearly
- 1% for half yearly.
- None for quarterly.
- Loans: The LIC offers a loan opportunity, however it is only available when the insurance holder has held the policy for three years. If the plan obtains a surrender value, the maximum borrowing amount is determined by the surrender value of the policy.
- Revival: Within two years of the date of the first delinquent premium, the policy can be revived by paying all premium arrears, plus interest and additional fees.
- Surrender value: LIC You can surrender the plan at any time and receive the surrender value with the New Jeevan Anand. The insured is only eligible for the surrender value after three years of complete premium payments.
The higher of the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV) is paid upon surrender and is calculated as follows:
- Guaranteed surrender value: 30% of the entire premium paid, minus the first-year premium.
- Based on its future performance, the corporation would set a certain surrender value.
- Premium payment flexibility: this plan allows individuals to pay premiums on a monthly, quarterly, biennial, or annual basis.
- Additional riders’ benefits
- LIC’s Accidental Death benefit rider
- Disability benefit rider
- Premium Discount: Discounts on premiums are offered for bigger sums assured as well as yearly and half-yearly premiums.
- Income Tax Benefit
- Section 80C of the Income Tax Act of 1961 exempts the premiums paid for the plan from taxation. The maximum amount of tax relief available is Rs.1.5 lakh.
- Maturity or death claims received would be exempt from taxation under section 10(10D) of the Income Tax Act of 1961.
- Claim amount
There is no limit to the amount of a claim that can be submitted, and the full claim is tax-free.
LIC Jeevan Anand policy eligibility requirements
Parameters Minimum Maximum
Sum assured Rs.1 lakh No limit
Policy term (in years) 15 35
Term(in years) 5 57
Entry age of
Policyholder 18 year 50 years
Age at maturity – 75 years
Policy revival within 2 years
Loan After 3 years
Premium payment mode yearly, half yearly, Quarterly, monthly
Surrender value after 3 years of full Premium payment
LIC Jeevan Anand Rider details
- LIC Accidental Death and Disability Rider benefit rider
It is an optional rider benefit for which you can pay an additional premium. Accident benefit sum assured will be paid as a lump sum along with the death benefit under the plan in the event of accidental death within the policy term. If you become permanently disabled as a result of an accident (within 180 days of the accident), you will be awarded an amount equal to the Accident Benefit Sum Assured in equal monthly payments.
- Availability of a minimum accident benefit of Rs.1 lakh
- Maximum accident benefit sum assured: an amount equal to the basic sum assured under the basic plan, subject to a total limit of Rs.100 lakhs, taking into account all existing Life assured policies under individual and group schemes, including policies with inbuilt accident benefit, taken with Life Insurance Corporation of India, and the Accident benefit sum assured under the new proposal.
- Entry age must be at least 18 years old
- Maximum age at entry-the cover can be purchased at any policy anniversary during the policy term, but not before the policy anniversary on which the life insured’s age nearer his or her 70th birthday.
- 70 years of age or the conclusion of the insurance, whichever comes first.
How does LIC Jeevan Anand Policy works?
- The policyholder will choose an amount assured and the plan’s duration.
- The premium of the plan will be determined by the LIC based on the insured person’s age, selected sum assured, and policy tenure.
- The insured must pay premiums for the duration of the policy term under this plan.
- If the insured person lives until the conclusion of the plan, he or she will get a maturity payment.
- Maturity benefit=sum assured +bonus (amount earned over the policy duration) +any additional final bonus
- Now, if the policyholder dies (even beyond the policy term), the nominee will get an additional sum assured as the death benefit.
- Death benefit=sum assured on death + vested bonus (until date of death)+ any final additional bonus will be paid to the nominee -the sum assured on death will be the higher of 125 percent of the basic sum assured or 10 times the annual premiums paid, subject to a minimum of 105 percent of total premiums paid until death.
Role of tax:
Section 80C of the Income Tax Act of 1961 makes all premiums paid under this plan tax-free. The maximum amount of tax relief that a person can get under the scheme is roughly Rs.1.5 lakhs. The premium should be limited to 10% of the sum assured selected in order to qualify for this exemption.
- Maturity claim: under section 10(10D) of the Income Tax Act of 1961, the maturity amount will be tax-free. To be eligible for this exemption, the premium must be at least ten times the amount paid.
- Death claim: under section 10(10D) of the Income Tax Act,1961, a death claim received under the same will be tax-free. Exemptions for death claims will have no upper limit.
- Simple reversionary bonuses This is a profit-sharing model in which everyone receives a piece of the pie in the form of bonuses. At the end of each financial year, simple reversionary bonuses are announced per thousand sum assured. Once declared, they become part of the plan’s guaranteed benefits. Bonuses and final bonuses will be applied to the policy during the set term of coverage or until death, whichever comes first.
- Grace period: A 30-day grace time is offered to pay the outstanding premium. The policy may lapse if the policyholder fails to pay the premium on time. The policyholder, on the other hand, has two years from the date of the first delinquent premium to pay. He can resurrect the closed LIC jeevan anand policy insurance by paying all of the premiums that are due within the specified time frame.
- Cancellation: If no claims have been filed, the insured individual has the option of cancelling his plan for free within 15 days of its inception.
- Surrender value: As the policy’s three years are completed, it becomes eligible for surrender value advantages. Another advantage of getting the loan is that the policyholder can use it to repay the debt.
The documents needed under this insurance plan are contingent on the sum assured amount quoted and the premiums paid.
- Fully completed application form
- Proof of age
- Proof of address
- Medical documentation
- KYC papers, such as Aadhaar cards, PAN cards
- Medical diagnosis reports, if applicable
- Death claims
To obtain a claim on the death of a policyholder, the person who is entitled as the nominee must present the claim form, as well as the original documents issued by LIC in the name of the person insured. In addition, the nominee must provide all other information, such as a bank account, medical treatment information, and a death certificate
- Maturity claims
To get a claim on the policy’s maturity, the covered person must submit a discharge form along with the original certificate of policy issued by LIC in the policyholder’s favour. For a NEFT transfer of the maturity amount, the policyholder must supply bank account information.
- Claim of surrender
Even if the policy must be surrendered, the discharge form must be linked to prior LIC documentation, and all other certifications must be presented. To get the surrender value in the policyholder’s account, bank details or a NEFT transfer must be provided. If the policyholder commits suicide within the first 12 months of the policy, the nominee will receive 80 percent of the premiums paid up to that point. If the policyholder dies after the policy is renewed, the higher of the 80 percent premiums paid up to the date of death of the holder or the acquired surrender value will be paid.
If the firm discovers that the information provided during verification is misleading or incorrect, the company has the right to cancel the insurance policy under section 45 of the Insurance Act of 1938. A person is only eligible if he or she presents all required documents along with a fully completed application form. LIC will do its proper verification and after verification is done confirmation will be sent to the given individual within 15 to 20 days.
Assume Arun, a 35-year-old man, purchases a Jeevan Anand policy for Rs. 1 lakh (Sum Assured) for a period of 25 years (Term). His premium for the year will be Rs. 4,535.
Scenario 1: Arun dies in the policy’s 15th year.
The Sum Assured of Rs. 1 lakh, as well as any accumulated bonuses up to the date of death, would be paid in this case, and the plan would be terminated. LIC announces a bonus every year. Every year, the LIC Jeevan Anand Bonus rates are announced.
Scenario 2: Arun lives until the policy’s expiration date.
In this situation, Arun would receive the Rs. 1 lakh Sum Assured as well as the collected bonus till maturity, and the risk covered under the plan would remain. When Arun dies, the Sum Assured of Rs. 1 lakh will be paid to his nominee once again.
You can use the LIC Jeevan Anand Maturity Calculator to see how much he’ll get when his policy matures.