Wednesday, November 12, 2014

Review of LIC Jeevan Shagun Policy

Review of LIC Jeevan Shagun Policy

On 1st Sept, 2014 LIC has launced LIC Jeevan Shagun Policy for 90 days. Many of my friends and investors has inquired about this whether should they buy it or not. Today we will discuss about its features in detail for review. It is non linked, single premium, money back insurance plan with profit.

Features of LIC Jeevan Shagun Money Back Plan:

·         The minimum entry age is 18 and the maximum entry age is 45 for this plan

·   It is single premium policy. It means you have to pay premium only in starting. The policy tenure is 12 year.

·       It offer sum assured 10 times of single premium which you pay in start. It will be paid only in the case of death. The minimum sum assured is Rs 60,000 in this plan and for maximum there is no limit.

·         Loan facility also available in this plan. Loan amount is linked to surrender value. From 2nd to 3rd year of policy the eligible loan amount would be 50% of surrender value. From 4th to 6th year the loan amount would be 60% of surrender value. For 7th to 9th year it would be 70% of surrender value and from 10th to 12th year it would be 90% of the surrender value

Death Benefit:
In case death happen within 5 year from the beginning of policy your nominee will get paid basic sum assured means 10 time of your single premium and if it happen after 5 year then nominee will get basic sum assured with loyality addition.

Survival Benefit:
On survival of life insured, the insured will get 15% of the maturity sum assured at the end of 10th year, 20% of maturity sum assured at the end of 11th policy year and 65% of maturity sum assured will get at the end of 12th year of policy.

Surrender Value:
If you not satisfied with your policy, you have option to surrender it. If you surrender within 1 year from date of policy then you will get 75% of single premium and if you surrender policy after 1 year from the date of policy then you will get 90% of the single premium.

An example for understanding:

If a 40 year age person take Rs 1 lakh maturity sum assured, he/she need to pay Rs 59,500 ((1,00,000 / 1,000)*595) as single premium for 12 year policy cover. In case of death he/she will get 10 times of single premium, It means in this case 5.95 lakh.

In case of survival the payout he/she will get at the end of 10th year is Rs15,000 (15% of maturity sum assured). At the end of 11th year you will get Rs 20,000 (20% of maturity sum assured) and at the end of 12th year Rs 65,000 (65% of maturity sum assured) and loyalty addition or bonus if any.

Should you go for this plan?

I have many times mentioned in my blog. Generally LIC policies provide returns between 5% to 7%. Low risk appetite investors who want to stay away from high risk and high return products stocks, mutual funds, etc. can opt for such policies. One should consider term insurance plans for risk coverage purpose and balance, invest in bank FD schemes or mutual funds and stocks according to their risk appetite which can provide better returns.



If you want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for seminar in your city just drop the mail.

Warm regards,
Arvind Trivedi
Certified Financial Planner


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