What is LIC New Jeevan Anand Plan?
LIC New Jeevan Anand Plan is a popular Endowment Whole Life Plan.
When Was LIC New Jeevan Anand Plan Launched?
LIC New Jeevan Anand plan was launched on 9th October, 2013. It falls under the category of an endowment whole life plan. The plan delivers protection financially against death through the life of the policy owner combined with a facility of payment of a lump sum amount at the end of a selected period in case of his/her survival.
How Does the LIC New Jeevan Anand Plan the Work?
The policy owner has to select the sum assured and term of the plan when enrolling for the plan. The policy owner pays premium for the entire duration of the policy term. The premium to be paid is usually selected based on the age of the policy owner.
If the policy owner survives till the policy term end, a maturity benefit will be paid to the policy owner.
The maturity benefit accrued to the policy owner would be equal to the Basic sum assured + Bonus amounts which would have accumulated throughout the policy term + any final additional bonus if declared. Now,in the event of the policyholder’s death after the policy term, additionally the nominee will receive the assured sum as the death benefit.
Yet, if the policy owner passes away within the term of the policy, then the death benefit will be equal to the assured sum on death + bonus vested till date of death + any final additional bonus.
What are Some of the Other Key Features of LIC Jeevan Anand Plan?
- LIC New Jeevan Anand is a participating plan. The policy owner will get bonuses if declared by the company. However, the bonuses get paid only at maturity or death.
- In the case of death of the policy owner, the sum assured is paid to the entitled nominees.
- The assured sum on death is defined as 125% of the sum assured basic or ten times of annualized premium.
- LIC Jeevan Anand plan proposes tax exemption on the claim settlement and premium paid in sections 10 (10D) and 80 C of Income Tax Act.
- On payment of a nominal premium amount, the policy owner can avail of added top up covers as riders. For example, accidental death and disability benefit rider is available by payment of additional premium.
- On survival till the end of the plan, the policy holder will avail of the benefit amount on maturity. Moreover, the policy will continue to be in force.
What Are the Benefits of LIC Jeevan Anand Plan?
- The plan includes simple reversionary bonuses by participating in the profits of the company. This is offered at the maturity of the policy or as death benefit.
- A final additional bonus may be declared based on the experience of the company.
- The death benefit is not less than 105% of all the premiums paid as on date of death.
- The premiums are excluded of service tax.
- Loans can be availed against the policy.
- House loan surety is available under the policy.
- The plan includes a suicide clause.If the policy holder commits suicide within 12 months of date of commencement of risk or from date of revival of policy, then 80% of premium for what he had paid will be returned to his assignees or nominees
Are Buyers Happy with LIC New Jeevan Anand Plan?
When a person buys a policy from LIC or any other institution, it shows his trust in the merits of the product. Therefore, it is also natural for a customer to assess the performance of the product in the market. The assessment will be made before purchasing life insurance product or even after buying it during the tenure of the policy. There are pros and cons to any product.
Review of LIC New Jeevan Anand Plan
LIC New Jeevan Anand plan is a savings cum life protection plan.It is not without drawbacks. Some people have the cited the following disadvantages against the plan.
- The company declares different kinds of bonuses.The bonuses keep getting added to the maturity value. However, it is important to note that the bonuses are not guaranteed.
- To exit the policy, the buyer must pay heavy penalty. If the policy owner surrenders after paying premium for only two years, he won’t get anything back.
- The insurance amount is inadequate given the premium paid. For example, for a Rs 50 lakhs cover, the annual premium to be paid comes to 2.21 lakhs.
It might be cheaper to buy pure life cover products over endowment plans to secure life protection. In case of a pure term cover, a cover of 1 crore can be purchased for an annual premium of Rs 7,000 -10,000 per annum. Once life protection is taken care of, a person in his 30’s can use the rest of his money for investment purposes. An unrealistic expectation out the product may have led to disappointments in some buyers. A combination of term plan with PPF or mutual funds may ensure better life cover and investment returns.
However, before rejecting the policy for its limitations, let us understand when such a plan can be most suitable.Think about instances when an application for high sum assured term cover may be refused by the company. This can happen if the applicant is suffering from an ailment.Life insurance companies these days by rule are bound to pay for any plan that is three years old. Therefore, they are exercising caution in issuing high sum assured term policies.LIC New Jeevan Anand plan is very suitable for such customers.