Jeevan-Umang

LIC’s Jeevan Umang Plan Table No 845

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

Death Benefits

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.

Survival Benefits

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.

Age30 yearsTerm of Policy:70 Years
Premium Payment Term30 Years
Sum Assured500000
Simple Reversionary Bonus (Per Rs 1000 Sum Assured (Assumed)60
Simple Reversionary Bonus Per Year30000
Final Bonus (Assumed)1750
Final Additional Bonus At Maturity /Death1750000
Age
Years
Cash FlowSimple
Reversionary
Bonus
Remarks
30-1602530000Premium Payment Term
31-1602530000
32-1602530000
33-1602530000
34-1602530000
35-1602530000
36-1602530000
37-1602530000
38-1602530000
39-1602530000
40-1602530000
41-1602530000
42-1602530000
43-1602530000
44-1602530000
45-1602530000
46-1602530000
47-1602530000
48-1602530000
49-1602530000
50-1602530000
51-1602530000
52-1602530000
53-1602530000
54-1602530000
55-1602530000
56-1602530000
57-1602530000
58-1602530000
59-1602530000
604000030000No Premium Payment
8% of Sum Assured Every Year(Rs  5 Lac X 0.08 = 40000
Same Rate of Reversinery bonus has been assumed.
614000030000
624000030000
634000030000
644000030000
654000030000
664000030000
674000030000
684000030000
694000030000
704000030000
714000030000
724000030000
734000030000
744000030000
754000030000
764000030000
774000030000
784000030000
794000030000
804000030000
814000030000
824000030000
834000030000
844000030000
854000030000
864000030000
874000030000
884000030000
894000030000
904000030000
914000030000
924000030000
934000030000
944000030000
954000030000
964000030000
974000030000
984000030000
994000030000
100435000030000Maturity Amount: Base Sum Assured + Simple Reversionary Bonus (every year) + Final Additional Bonus (in the year of maturity)

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