LIC Jeevan Rakshak Plan(827)

LIC Jeevan Rakshak - Table No. 827:

 LIC Jeevan Rakshak in Hindi >

LIC Jeevan Rakshak Policy is a participating endowment plan which provides both investment and insurance benefits. Since it is a participating plan, bonus benefits will be available. This is a standard endowment plan. There are some additional benefits which you can take in the form of riders. We will explain the benefits of this plan with the help of a few examples.

Launch Date	5th March 2014
Plan Details	Table No. 827
Policy Type	Endowment

KEY FEATURES:

• Sum Assured (SA): The Minimum SA is  Rs 75,000  and the  Maximum allowed is Rs 2 Lakh
• Policy Tenure: Minimum 10 years and maximum allowed is 20 years
• Age entry (Life Assured’s): Minimum is 8 years and the maximum is  55 years.
• Maximum maturity age – 75 years
• Death benefit before 5 years of policy existence –Basic Sum Assured (BSA)
• Death Benefit anytime after the 5th year – Higher of BSA or 10 times of annualized premium or 105 % of all premium paid as on date of death plus Loyalty Addition (LA) (if any)
• Maturity Benefit – Basic Sum Assured (BSA) plus Loyalty Addition
• Loan – Loan can be taken on the policy after 3 premium payment years
• In the case of surrendering the policy then no Loyalty Addition is payable
• LA is applicable only after 5 years

LIC Jeevan Rakshak Premium quotes:

Let us understand how a 20-year LIC Jeevan Rakshak policy works.

Kindly note these important points before opting for Jeevan Rakshak:

• The average return on endowment policies will be around 4% to 6%. You may find better investment avenues in the financial markets. In the above calculation, the returns are around 6%.
• As you can analyze from the above example, the rate of return largely depends on the amount of Loyalty Addition paid.
• Kindly remember that no Loyalty Addition is paid if the policy is surrendered. And it is applicable only after 5 years of policy existence.
• Section 80 C limit has been increased to Rs1.5 Lakh. Now there is every chance that you may be convinced or lured to buy this policy to save taxes. Tax benefits on Life insurance may reduce the cost of insurance. But, it should not be THE deciding factor.
• The maximum Sum Assured offered in this plan is just Rs2 Lakh. This amount is payable on death or maturity. So, the value of Rs 2 Lakh is very less (say after 20 years).
• If you can afford to take the risk (depending on your age & financial goals) then it may be a wise decision to avoid these kinds of endowment policies. The returns on these policies are below the average rate of inflation. So, they do not create wealth for you.

Benefits in the LIC Jeevan Rakshak Plan:

In case of the death of the policyholder before the end of the policy term, the nominee will receive the highest of the following:

• Basic Sum Assured
• 10 times the Annualised Premium
• 105% of all premiums paid till date of death

The premiums mentioned above refer to premiums without the tax component and also does not consider any rider premiums.

Loyalty Additions, if declared will be payable as part of the Death Benefit in case the death occurs after 5 policy years.
 

Maturity Benefit in LIC Jeevan Rakshak Plan

At the end of the policy term, the policyholder will receive the following:

• Basic Sum Assured
• Loyalty Additions, if declared

LIC Jeevan Rakshak Plan with an Example:

We have Anurag Reddy, age 30 who wishes to buy this plan. He goes in for the plan with the following:

Sum Assured - Rs. 2,00,000
Term - 20 years
Premium Payment Term - 20 years

Based on these parameters, his annual premium is Rs. 6,746 + Taxes = Rs. 7,050. Here we have assumed the current tax rate of 4.5%.


Death Benefit:

Scenario 1 : If Anurag dies after 4 policy years.

His nominee gets the highest of the following:

• Basic Sum Assured - Rs. 2,00,000
• 10 times the Annualised Premium = 10 x 6,746 = Rs. 67,460
• 105% of all premiums paid till date of death = 105% x 4 x 6,746 = Rs. 28,333 

The highest of the above is Rs. 2,00,000 - which is what the nominee will receive. Since the policy has not completed 5 years, no Loyalty Additions will be payable.

Scenario 2 : If Anurag dies after 15 policy years

His nominee gets the highest of the following:

• Basic Sum Assured - Rs. 2,00,000
• 10 times the Annualised Premium = 10 x 6,746 = Rs. 67,460
• 105% of all premiums paid till date of death = 105% x 15 x 6,746 = Rs. 1,06,250 

The highest of the above is Rs. 2,00,000. Since the plan has completed 5 policy years, it is eligible to receive Loyalty Additions. So nominee will receive Rs. 2,00,000 + Loyalty Additions. The value of Loyalty Additions can only be known when it is declared.
 

Maturity Benefit 

Scenario 3 : If Anurag survives till the end of the policy term of 20 years - Anurag will get the  Basic Sum Assured + Loyalty Addition as declared. 

Total Premiums Paid = Rs. 1,40,991 (including taxes)

Basic Sum Assured = Rs. 2,00,000

Loyalty Additions - As declared.

Year
Net Cash Flows

1
-7058
Premium instalment
2
-7058
Premium instalment
3
-7058
Premium instalment
4
-7058
Premium instalment
5
-7058
Premium instalment
6
-7058
Premium instalment
7
-7058
Premium instalment
8
-7058
Premium instalment
9
-7058
Premium instalment
10
-7058
Premium instalment
11
-7058
Premium instalment
12
-7058
Premium instalment
13
-7058
Premium instalment
14
-7058
Premium instalment
15
-7058
Premium instalment
16
-7058
Premium instalment
17
-7058
Premium instalment
18
-7058
Premium instalment
19
-7058
Premium instalment
20
-7058
Premium instalment
21
280000
Maturity Benefit (SA + LA)

Returns
6.15%




Sample Premium Illustration of LIC Jeevan Rakshak Policy:

Here are the sample tabular premium rates (inclusive of taxes) payable by a healthy, non-tobacco user male for different combinations of age, Sum Assured and policy term. We have gone with the current applicable tax rate of 4.5% for such policies.

Term: 15 Years
Age: 30,50 & 50 Years
Sum Assured: 1,00,000

Eligibility Criteria for buying LIC Jeevan Rakshak Policy:

	Minimum	Maximum
Sum Assured *	Rs. 75,000	Rs. 2,00,000
Policy Term	10 years	20 years
Premium Payment Term	Same as policy term
Entry Age	8 years (completed)	55 years (nearest birthday)
Maximum Maturity Age	70 years (nearest birthday)
Premium paying frequency	Annually, Half-yearly, Quarterly, Monthly

Tax Implications in LIC Jeevan Rakshak Plan:

• Premiums – The premiums paid for the plan are exempt from taxation under Section 80C of the Income Tax Act. 
• Maturity Claim – Maturity amount is exempted from tax under Sec 10(10D) of the Income Tax Act  
• Death Claim – Death claims received under the plan are free from taxation under Section 10(10D) of the Income Tax Act

Other Benefits in the LIC Jeevan Rakshak Policy:

• Free-look Period – If the policyholder is not happy with the plan, he can cancel the policy within 15 days of the plan issuance. This period is called the free-look period. Upon cancellation, the premium paid net of any applicable expenses would be returned.
• Grace Period - In case of Yearly, Half-yearly and Quarterly premium payment mode you have a grace period of 30 days from the premium due date. In case of monthly premium payment mode, the grace period is of 15 days. 
• Loan - You can avail along against this policy after you have paid 3 years of premium.
• Riders  - You have the choice of taking the following rider by paying an extra premium amount:
  • LIC’s Accident Benefit Rider
• Surrender Value - If you surrender the plan anytime before paying 3 years of premiums, you will not be paid anything back. In case you have paid at least 3 years premiums, the policy will acquire a Surrender Value. Click to find the Guaranteed Surrender Value in LIC Jeevan Rakshak Plan.

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CHECK YOUR MATURITY AMOUNT HERE:

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