LIC Jeevan Shagun

LIC Jeevan Shagun plan has been withdrawn by LIC and is not available for sale and purchase.

LIC Jeevan Shagun is a non-linked, participating, savings with protection single premium Money-Back plan. The policy provides high life cover in the event of miserable death of the policyholder where the single premium paid depends on the maturity sum assured opted by the insured. On surviving till the end of a certain period and on the maturity date, a percentage of Maturity Sum Assured is paid by LIC.

The plan was launched on 1st September, 2014 for a period of 90 days as it is a close-ended plan so one can fulfill any immediate service requirement. For new buyers looking to buy a similar LIC one time investment plan, you will find comparisons with other plans currently offered by LIC.

The single premium paid for the plan ranges accordingly on the basis of various factors like the policy term, insured person’s age, the sum assured chosen, etc. After purchasing the policy, tax benefits are also applicable to the plan.

Features of LIC Jeevan Shagun Plan

• Single-Premium: The policy buyer needs to make a single premium payment only, and his/her life is insured for a specific time period.
• Participating: The insurance company pays annual dividends in the form of reward to the policyholder.
• Non-Linked: It is a traditional plan providing risk cover, as opposed to unit-linked insurance plans (ULIPs), which have a higher rate of exposure to the equity markets, depending on the risk profile chosen by the customer.
• Savings Cum Protection: The policy buyer deposits a lump sum to the insurance company as premium, and his nominees receive the assured amount in case of death of policyholder during the policy term. The policyholder receives his assured amount along with dividends at the end of the term upon survival; thus, the plan reflects as a protection as well as savings scheme.
• Money-Back Plan: The insurance company pays annual dividends to the policyholder. The payouts shall be received in the 10th and 11th year of policy in case of survival, make this plan qualify as a Money-Back Plan. These payouts are called Survival Benefits, aim to liquidate some of the financial assets from the plan for use by the policyholder.
  The Jeevan Shagun policy document is available (in English & Hindi) on the LIC's website, along with the policy details.

Highlights of LIC Jeevan Shagun Plan

LIC Jeevan Shagun Plan is a regular life insurance policy that comes with dual benefits of savings as well as a protection plan.

Benefits of LIC Jeevan Shagun Plan

Pay Once and Forget

LIC Jeevan Shagun Plan is a hassle-free plan as the plan being in effect and requiring only a single payment at the time of issue saves you from the trouble of paying monthly and yearly premiums on a regular basis. No further payments are required to be made by the existing policyholder. This makes the plan more appropriate and advantageous for the policyholder.

Survival Benefit

If the policyholder survives till the end of a certain period, the survival benefit is paid as 15% of the Maturity Sum Assured at the end of 10th policy year and 20% of the Maturity Sum Assured at the end of 11th policy year. 65% of MSA along with Loyalty Addition will be paid as maturity benefit if the policyholder survives till the end of the policy term.

Death Benefit

Sum assured, i.e. 10 times of the single tabular premium (exclusive of taxes) will be paid on the demise of the insured before the completion of 5 years. Similarly, 10 times of the tabular single premium, including loyalty addition, will be paid on the demise of the insured after completing of 5 years.

Option to Liquidate Your Insurance Assets

In case you are in need of liquid funds at any point during the term beyond a year of buying the policy, LIC offers you the option for withdrawing funds as a loan, with the amount available to you depending on the number of years the policy was in force.

Loan Facility

After completion of one year of the policy, loan facility is available. The interest on the loan shall be compounded on a half-yearly basis, at a rate specified by the corporation on the issuance of loan. The first payment of interest is to be made on whichever date following the date of issue in either 6 months before or on the date of the next policy anniversary.

Loyalty Addition

Policyholders will enjoy the benefit of receiving bonuses from the corporation depending on rates declared by LIC. These bonuses will be accumulated in the plan and payable at the time of death, maturity or surrender beyond the 5th year of the policy. The expected rates can range from Rs. 30 to Rs. 45 per Rs. 1000 of the Maturity Sum Assured.

Tax-Free Returns

The LIC Jeevan Shagun plan serves the dual purpose of providing protection to the policyholder and performing the role of a savings account. The claimant can avail the tax benefit of Rs. 1.5 lakhs once in the single payment insurance plan, i.e. in the first year of the policy under Section 80C of the Income Tax Act, 1961. Whereas paying an annual premium allows the policyholder claiming of tax exemption every year upon payment. On an average, this plan provides tax-free returns of around 8%, which is an effective and beneficial feature of the policy.

Surrender Value

On surrender of the policy, the policyholder will receive 90% of the premium paid, excluding extra premiums and taxes paid. The policy loan and Loyalty addition depend on the Surrender Value and not the Sum Assured. Sum assured, i.e. 10 times of the single tabular premium (exclusive of taxes) will be paid on the demise of the insured before the completion of 5 years. Similarly, 10 times of the single tabular premium, including loyalty addition, will be paid on the demise of the insured after completing of 5 years.

Loan can be availed as a percentage of the surrender value, that may vary according to the policy year. For instance, 90% of the surrender value can be availed in the final policy year. LIC can deduct the outstanding payments for the loan, including interest from policy funds.

Documents Required for Jeevan Shagun Plan

For Death Claim

Make sure to intimate the insurance company on the death of the policyholder. This can be done by the nominee, a close relative, or the agent handling the policy.

The company requires the following certain piece of information to be enclosed in the death claim:

• Filled Claim Form.
• Policy Document.
• Death Certificate.
• NEFT Details (for the direct transaction of claim amount into the bank account).

For Maturity Claim

At the time of maturity of the policy to file a claim for survival benefits or surrender, the policyholder requires to submit the following documents to the insurance company:

• Discharge form.
• Original policy documents.
• NEFT Details (for the direct transaction of claim amount into the bank account).

The discharge voucher or claim receipt needs to be witnessed and signed by the policyholder.

Limitations of LIC Jeevan Shagun Plan

The benefits stated above may seem appealing to you right away. Indeed, having to pay a premium only once can be very convenient, but before jumping to a decision, consider the limitations of single premium policies:

• One can only avail the tax exemption of Rs. 1.5 lakhs under Section 80C once in a single insurance plan, i.e. in the first year of the policy. Whereas paying an annual premium allows claiming of tax benefit every year upon payment.
• The extra amount paid for a single premium plan becomes unavailable. This can be a downside one can choose other investment opportunities available with better returns.
• Over time, the value of each rupee relatively depreciates due to inflation. For example, assuming an average inflation rate of 6%, the worth of Rs. 1 lakh now stands to be Rs. 1.8 lakhs 10 years later. If the premium is paid on a yearly basis, one can actually end up with the best bang for the buck.

Compare LIC Jeevan Shagun with Other LIC Life Insurance Plans

Exclusions

If the policyholder commits suicide under any circumstances within 12 months from the initiation date of risk, LIC will not accept any claim under the plan. As an exception, only 90% of the single paid premium exclusive of taxes and any additional paid premiums shall be payable to the beneficiary(s).