LIC Jeevan Umang is a non-linked participating whole life traditional life insurance plan. The plan matures when Insured turn 100. Followings are some features of the plan and how LIC Jeevan Umang will produce return for the Insurer. Also, Benefits for Insurer included in this plan.
Features of LIC Jeevan Umang
Policy Maturity: At the age of 100 years.
Policy Term: 100 years – Your Entry Age (From First Premium Paying Year to 100 Years)
Premium Payment Term: 15, 20, 25 or 30 years (Years of Premium to pay)
Minimum Age at entry: 90 days (Why would a kid need a 100-year policy)
Maximum Entry Age: 55 years but Last premium should not exceed 70 Years Age.
55 years for 15-year premium payment term
50 years for 20-year premium payment term
45 years for 25-year premium payment term
40 years for 30-year premium payment term
Minimum Sum Assured: Rs 2 lacs
Maximum Sum Assured: No cap
If the death of the policyholder happens before the commencement of risk, your nominee will be refunded the premiums paid (excluding taxes). If the Death happens after the commencement of risk, the nominee will get:
Base Sum Assured + Simple Reversionary Bonus (every year) + Final Additional Bonus (applicable in the year of death)
a. The risk will start immediately if the age of insurer is more than 8 years
b. will start after two years or at the age of 8 years if the age of insurer is less than 8 years.
You will get 8% of Base Sum Assured every year after completion of the premium payment term till the age of 100 (or death whichever is earlier). On maturity (at the age of 100), you will get:
Base Sum Assured + Simple Reversionary Bonus (every year) + Final Additional Bonus (in the year of maturity)
Simple Reversionary Bonus
About Reversionary Bonuses, do not even though these bonuses are announced every year, you get these bonuses only at the time of maturity.
If the bonus of Rs 50,000 is announced for your policy but you get the amount after 40 years, the value of this Rs 50,000 is greatly diminished due to inflation.
There is a difference between the Simple Reversionary Bonus during the PPT and the years after the PPT is over. The policy wordings clearly mention (after the premium payment term is over), “the terms for a participation of profits after the premium paying term may be in a different form and on a differential scale depending on the Corporation’s experience under this plan at that time”.
How are the returns?
Returns to be quite low. That is the case with all the traditional life insurance plans.
Suppose a 30-year-old man purchases LIC Jeevan Umang for a life cover of Rs 5 lacs.
The annual premium for the plan will be Rs 16,025 (before taxes).
taxes have not been considered in this calculations. That will, to an extent, nullify the premium rebates.
It has assumed fair values for Simple Reversionary Bonuses and Final Additional Bonus. It has been considered from bonuses for other similar plans from LIC and other online sources.
|Age||30 years||Term of Policy:||70 Years|
|Premium Payment Term||30 Years|
|Simple Reversionary Bonus (Per Rs 1000 Sum Assured (Assumed)||60|
|Simple Reversionary Bonus Per Year||30000|
|Final Bonus (Assumed)||1750|
|Final Additional Bonus At Maturity /Death||1750000|
|30||-16025||30000||Premium Payment Term|
|60||40000||30000||No Premium Payment|
8% of Sum Assured Every Year(Rs 5 Lac X 0.08 = 40000
Same Rate of Reversinery bonus has been assumed.
|100||4350000||30000||Maturity Amount: Base Sum Assured + Simple Reversionary Bonus (every year) + Final Additional Bonus (in the year of maturity)|