Jeevan Pragati Plan(838)

LIC Jeevan Pragati Plan (838):

LIC Jeevan Pragati Plan (Table No: 838) is a non-linked (Not dependent on share market) endowment assurance plan in which Risk Cover keeps on increasing every 5 years. The increasing risk cover is an important feature which provides adequate risk cover against inflation as the years passes. Jeevan Pragati plan can be suitable for a person who is looking for a saving as well as adequate risk cover as protection for his/her family with LIC. This can be opted with accidental benefit rider to make it a better plan.

LIC Jeevan Pragati Plan Review:

Launch Date	Table Number	Product Type	Bonus	UIN
3rd February 2016	838	Endowment	Yes	512N306V01

How it works - You pay a regular premium for a policy term of your choice. You will now be eligible to a life cover called the “Basic Sum Assured”. The life cover will increase automatically with every block of 5 policy terms - details of which are mentioned below. You can also avail the 'Accidental Death and Disability Rider' along with the cover. The rider will come at an additional cost.

Key Features:

• Increasing Life Cover
• Suitable plan to counter inflation
• Premium paid is eligible for the rebate under 80(C)
• Maturity amount will be tax-free under 10(10D)

Plan Parameters

Age at Entry	12 Years (Completed)
Maximum Age at Entry	45 Nearest Birthday
Maximum Maturity Age	65 Nearest Birthday
Premium Paying Mode	Yearly, Half Yearly, Quarterly, Monthly (ECS Only)
Policy Term	12 to 20 Years
Sum Assured	1,50,000 and above (in multiple of 10,000)
Premium Mode Rebate	2% on yearly, 1% on Half Yearly, Nil on Quarterly & Monthly
Rebate on High Sum Assured (Per 1000 of Sum Assured)	0% up to 2,90,000
	1.50% for 3,00,000 to 4,90,000
	2.00% for 5,00,000 to 9,90,000
	2.25% for 10,00,000 and above
Loan	After 3 years
Surrender	After 3 years of full premium payment

Maturity Benefit:

On completion of the policy term, Sum Assured + Bonus + Final Addition Bonus (FAB) will be paid at maturity.

Death Benefit:

In case of death during the policy term, Death Sum Assured + Bonus up to the year of death + FAB will be paid as Death claim to Policy holder's nominee. Death Sum Assured depends up the year of death, the following table explains the death claim.

Year of Death	Death Claim Amount	Remarks
During the 0-5 years of Policy Term	100 % of Sum Assured + Accumulated Bonus at the time of Death	FAB is not applicable before 15 Years
During the 6-10 years of Policy Term	125 % of Sum Assured + Accumulated Bonus at the time of Death	FAB is Not applicable before 15 Years
During the 11-15 years of Policy Term	150 % of Sum Assured + Accumulated Bonus at the time of Death+ FAB	FAB is applicable for the 15th year
During the 16-20 years of Policy Term	200 % of Sum Assured + Accumulated Bonus at the time of Death+ FAB	FAB is applicable

Optional Rider:

Accidental Death and Disability Benefit Rider is available with this plan as the rider which can be attached with Jeevan Pragati plan (838) to make the more essential plan in case of an accident or disability during the policy term.

Explanation of the terms used above:

Basic Sum Assured – this is the amount of cover which you are eligible for when you buy the plan.

Simple Reversionary Bonus – In this plan, you will be eligible for a bonus which will be declared every year by LIC. This bonus may change from year to year. You can find the historical details of Bonus declared by LIC for various plans here.

Sum Assured on Death – this is based on the number of years that the policy has been active. This is calculated as follows: 

Highest of

• 10 times the Annualised Premium
• 100% of Basic Sum Assured in case of death within 0 to 5 years of policy term
• 125% of Basic Sum Assured in case of death within 6 to 10 years of policy term
• 150% of Basic Sum Assured in case of death within 11 to 15 years of policy term
• 200% of Basic Sum Assured in case of death within 16 to 20 years of policy term

Final Additional Bonus – This plan is also eligible for a one-time bonus at the end of the policy term. This is like a loyalty bonus for long-term plans (usually reserved for policy terms greater than 15 years). The loyalty bonus is also declared by LIC every year. 

I will now explain the Benefits of LIC Jeevan Pragati with the help of an example:

Suppose Akshay buys this plan with the following details:

Akshay's age	Basic Sum Assured	Policy Term
27 years	Rs. 2,50,000	20 years

The premium inclusive of Service Tax would be as follows:

Annually	Half Yearly	Quarterly	Monthly
Rs. 12,773	6451	3259	1086

Now let us see the benefits which Akshay will get in this plan.

Death Benefit - In case of Akshay's death, his nominee will be paid the get “Sum Assured on Death” + “Simple Reversionary Bonus” (which have been received till date) + “Final Additional Bonus”. Let us assume that Akshay's unfortunate death was after 7 years. Based on this the calculation would be as follows:

(A) Sum Assured on Death = 125% of Basic Sum Assured = 125% of Rs. 2,50,000 = Rs. 3,12,500

(B) Simple Reversionary Bonus = Rs. 10,500 x 7 years = Rs. 73,500
Here we have assumed that a Bonus of Rs. 42 per 1000 Sum Assured has been declared every year. So the bonus every year would be 42 x 2,50,000/1,000 = Rs. 10,500

(C) Final Additional Bonus = Since Final Additional Bonus is generally paid only if one has paid 15 years of premium, there will be no payout under this head. His nominee would have received an amount under this head in case the death had happened after 15 years.

So in case Akshay dies after paying 7 premiums, the Death Benefit payable to his nominee would be = (A) + (B) + (C) = Rs. Rs. 3,12,500 + Rs. 73,500 + Rs. 0 = Rs. 3,86,000

Death Benefit in LIC Jeevan Pragati in this example = Rs. 3,86,000

Click here to know Bonus Rates of LIC Jeevan Pragati Plan.

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