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What Is LIC’s Jeevan Utsav? How Does It Guarantee Income For Life?

LIC’s ‘Jeevan Utsav’ scheme is a guaranteed income plan for life, and anyone aged 90 days to 65 years is eligible for the policy.

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Outlook Money
November 30, 2023
LIC’s Jeevan Utsav

LIC’s Jeevan Utsav

Life Insurance Corporation of India (LIC) introduced a guaranteed income policy for life known as LIC’s ‘Jeevan Utsav’ on November 29, 2023. Any individual aged between 90 days and 65 years can apply. The policy’s premium paying term (PPT) ranges from five to 16 years. Senior citizens up to 65 can buy the plan, and the maximum premium-paying age is 75 or the nearest birthday.

The policy LIC’s Jeevan Utsav provides lifetime coverage and is categorized as ‘non-linked and non-participating’, meaning the investments are not market-linked, and the returns are fixed without additional benefits like bonuses. After the premium-paying term ends, the survival benefits start after a deferment period, depending on the premium-paying term. One can buy the policy through the LIC’s website or offline through agents.

Let’s learn more about the policy features:

It offers death cover and survival benefits: regular and flexi-income benefits. Senior citizens can get guaranteed income for life under this policy. An additional Rs 40,000 of the basic sum is assured at the end of each year for the premium-paying period.

Death Benefit:

The benefits include the ‘sum assured on death’ and the accrued guaranteed additions. The death benefit is the total premium paid till death, minus any rider or extra premiums and taxes paid. The sum assured is higher than the basic or seven times the annualized premium. Beneficiaries can receive the death benefits in monthly, quarterly, half-yearly, and yearly installments instead of a lump sum.

Survival Benefits:

For policyholders surviving the policy payment term, two options are available for receiving survival benefits:

Option I – Regular Income Benefit:

Under this option, the policyholder receives 10 percent of the basic sum assured at the end of each policy year. The payment commencement year depends on the premium payment term chosen, with deferment ranging from three to six years. For example, for a PPT of five years, the survival benefit will start from the 11th policy year, and for a PPT of 16 years, the benefit will begin from the 19th policy year.

Option II – Flexible Income Benefit:

Like the regular income option, this flexible option also provides 10 percent of the basic sum assured at the end of each policy year. The deferment period is the same as the regular income option, but policyholders can further defer it. If not withdrawn, the accumulated amount earns 5.5 percent annual interest compounded annually until withdrawal, death, or policy surrender. Policyholders can withdraw up to 75 percent of the accumulated balance, including interest, once a policy year. The remaining amount continues to accrue interest.

Policyholders can change the chosen survival benefit option selected at inception; they can do so only up to six months before the start of the policy year when flexi benefits become due.

The policy offers various riders, such as accidental death, disability, critical illness, premium waiver, and new term assurance. One can avail of loans against the policy or surrender it at any time in case of a financial emergency, provided the policy has completed two years with full premiums paid. The policy has no maturity benefits as it is a lifetime policy.

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