LIC Jeevan Utkarsh Policy 846 – Should I Buy?
LIC Jeevan Utkarsh is the new LIC plan going to add in the list of lic policies recently. This is like other traditional close ended policy from lic of India. In short a single premium, non-linked, with-profits, saving cum insurance plan.
Jeevan Utkarsh is going to launch on 6th September 2017. This policy will be available to purchase till 270 days from the date of launch. This investment will not be linked with stock market and the life cover will be 10 times of the single premium payment.
Eligibility Criteria of LIC Jeevan Utkarsh Plan 846
If you are interested to buy this policy and invest a lump sum amount, then you should know the eligibility criteria of this policy first.
- Minimum entry age: 6 years
- Maximum entry age: 47 years
- Mode of premium: Single / one time
- Minimum sum assured: Rs 75,000
- Maximum Sum assured: No limit
- Policy Term: 12 years
So, if you are planning to invest for your child and looking for investment option in India, then I am sure your lic agent will contact and try to convince you. But before investing, please read the complete article and specially the last part about Should I buy LIC Jeevan Utkarsh.
Features of LIC Jeevan Utkarsh Plan 846 – Key Highlights
# As mentioned already, this is a single premium payment policy and will be available to invest up to 270 days from the date of launch.
# The term of LIC Jeevan Utkarsh policy is 12 years only.
# You can also subscribe for additional riders (accidental death and disability benefit rider) by paying little more premium.
# Like every lic policy, if policy holder survives till the end of the policy period surviving to the end of the policy term, he/she will get “Sum Assured on Maturity”(Basic Sum Assured) along with Loyalty Addition, if any, shall be payable.
# Unlike other policies, the life cover will start only after completing 5 years of the policy. In case policy holder die before completing 5 years, only the premium paid will be returned back. That means no bonus or any interest.
# This policy has a new feature called “New Settlement”, which is new in this segment. Under this feature, policyholder can decide whether the death or survival lump sum amount will receive in installments or at one go.
# You can surrender Jeevan Utkarsh policy anytime within the policy term. There is no rule of completing 3 years of policy year like other li policies.
# Loan Facility is available after 3 months from the policy start period.
Benefits Jeevan Utkarsh Policy 846
So, let’s explore the benefits of this policy in detail. Mainly I will discuss about the maturity benefit and the death benefit which I have already shared.
Maturity benefits of LIC Jeevan Utkarsh Plan 846
The maturity benefit for this policy very simple, in the end of the policy term you will get “Sum Assured on Maturity” along with Loyalty Addition (LA), if any, will be payable.
Death Benefits of LIC Jeevan Utkarsh Plan 846
This feature is really strange for me as a life insurance product point of view. Jeevan Utkarsh will pay death beenfit in 2 conditions and they are mentioned below.
a) If death occurs within the first 5 years of policy
In case of unfortunate death of policy holder in first 5 years, your nominee will not get any death benefit, LIC will refund single premium without any interest and tax amount to the nominee.
b) If death occurs after the 5th years of policy and before maturity
Sum assured which is equal to 10 times of your single premium and Loyalty Addition will be payable to the nominee.
Sum Assured at death will be highest of the below
- 125% of the single premium; or
- Guaranteed Sum Assured on Maturity i.e. Basic Sum Assured; or
- 10 times of Single Premium
Loyalty Addition of LIC Jeevan Utkarsh Plan 846
Loyalty addition or LA will be applicable only after completion of 5 years of policy and will be payable on maturity of the policy term. The loyalty addition rate will be applicable on the time of maturity only and payable accordingly, if any.
Settlement option of LIC Jeevan Utkarsh Plan 846
Now this is something to talk about LIC Jeevan Utkarsh policy. With this feature, policyholder can decide whether you want to receive the settlement amount (death or maturity) in installments over the chosen periods like 5 Yrs, 10 Yrs or 15 Yrs instead of a lump sum one-time settlement.
You have to choose options from monthly, quarterly, half yearly or annually. But remember this feature only the policyholder can choose, not the nominee.
Minimum Installment payment would be Rs.5000. The Interest rates applicable for arriving at the installment payments under Settlement Option shall be as fixed by the Corporation from time to time.
Review of LIC Jeevan Utkarsh Plan – Should I Buy?
So, should you invest in LIC Jeevan Utkarsh policy? Will it give good return in 10+ years duration or is the insurance cover enough for your family? Let’s analyse few features of this policy ask us whether this policy meets any of our need.
# The first point I would like to mention is about the no life insurance coverage in first 5 years. Well, what is the point of buying life insurance in case your life is not covered from day 1.
# The policy term is 12 years only. Do you think 12 year is enough for you to buy a life insurance plan? Generally you should know how much and till when you should buy life insurance. E.g. if your age is 30 years and you are planning to retire by 60 year after completing all your financial responsibilities. In that case, your you should buy a life insurance plan for at least 30 years so that in case you die in between, your family’s aspirations & goals should not be disturbed financially.
# If you consider the return on investment, then I would say it will be around 6% to 7% on maturity. Which is attractive if you compare with the bank fixed deposits return, as you will also get income tax exemption under section 80c with Jeevan Utkarsh. But, there are other alternatives to Jeevan Utkarsh, if you are ready to explore about mutual funds. Jeevan Utkarsh premium calculator is not available right now, you can easily calculate the return on investment as soon as the LIC website is updated with the premium calculators.
# Although the insurance coverage is up to 10 times of single premium, it is very costly compared to any term insurance policy available in India.
So, I think it is your call now whether to buy LIC Jeevan Utkarsh policy or not. It is completely depend upon your understanding and investment need. But if you ask me, stay away from such policies as it will never give you enough life insurance nor the best return on investment. Although it is my personal opinion only, you can share your views & questions here by writing a simple comment below.