LIC’s Jeevan Varsha is a close ended Money Back Plan with Guaranteed Additions. The plan returns periodical payments as a proportion of Sum Assured at specified durations, on survival during the term of the policy and on maturity. This plan returns full Sum Assured on death irrespective of earlier pay backs. Guaranteed Additions are payable on death and Maturity. Loyalty Additions *may* also be payable during the last year of the policy on both maturity and death.
Since LIC couldn’t collect the expected amounts from Jeevan Astha policy, now they have come out with this Jeevan Varsha money back policy with a tenure to choose from 9 years and 12 years. The plan will be open for purchase from 16th February, 2009 to 31st March, 2009. Let us look at this policy features and analyse more.
* The minimum entry age for this policy is 15 years while maximum maturity Age is 75 years.
* Policy Term : 9 years & 12 years
* Premium Paying Term: 9 years
* Premium payment modes: Yearly, Half-Yearly, Quarterly, Monthly (by ECS mode only).
* Minimum Sum Assured Rs 75,000/- for monthly ECS mode while Rs 50,000/- for other modes
* Maximum Sum Assured: No limit. Also, sum assured shall be in multiples of Rs 5,000/-
|Survival Benefit||Term 9 years||Term 12 years|
|3rd Year||15% of SA||10% of SA|
|6th Year||25% of SA||20% of SA|
|9th Year||60% of SA + GA + LA (if any)||30% of SA|
|12th Year||–||40% of SA + GA + LA (if any)|
* Rs. 65 per 1000 of SA/year for a policy of 9 years term.
* Rs. 70 per 1000 of SA/year for a policy of 12 years term.
Applicable to those policies where in Life Assured has survived the stipulated date of maturity or on the Life Assured’s death during the last policy year. All this again at the descrition of LIC based on various factors which they haven’t specified clearly. For better understanding and benefits illustration visit LIC site here.
My take: Be specific on what you are looking for. If insurance is your basic need, go for pure insurance policies than compromising on both the insurance and profits via this kind of policies. Think about term insurance policies for cover while think of fixed deposits, mutual funds for investment. FD’s will give atleast 8-9% returns as compared against 6.5% of this LIC’s Jeevan Varsha. Prioritize what your needs and plan accordingly.
Update: Some of the readers requested for more detailed info with respect to calculations. So, here it is. I have compared the Jeevan Varsha with Bank fixed deposits and take a look at the image below to understand it before. I have considered the same example as that of a 35 years individual for the calculations at Rs 65 per thousand as Guaranteed Additions for a term of 9 years. However, I have not included Loyalty additions as there is no clarity on that from LIC of India. For bank FD’s I have considered interest at 8.5%. So, I leave the remaining analysis to your descrition. May be the elite knowledgeable LIC agents may be able to prove me wrong completely!
Disclaimer : This information is based on the details as available on LIC site at the time of writing this article. Please contact LIC agent / Development officer/ Regional office for official and accurate details.