Life Insurance Corporation of India or LIC is an Indian multinational public sector Life Insurance company established in 1956 and headquartered in Mumbai. It is India’s largest insurance company and has total assets of ₹45.7 trillion (US $570 billion) as of March 2023. LIC is wholly owned by the Government of India and is administratively controlled by the Ministry of Finance.
LIC provides various types of Life Insurance benefits and people rely more on LIC for Life Insurance plans as it is run by the government.
LIC Jeevan Umang policy is one of the best-performing plans offered by the company that offers dual benefits. This policy provides assurance of income protection throughout your Jeevan as well as insurance protection to your family in your absence.
What is Jeevan Umong Policy?
LIC Jeevan Umang is a Life Insurance plan that was first launched on 1st February 2020. The key feature of this plan is that the policyholder will start earning returns at the rate of 8% per annum from just 15 years of premium and minimum deposit of ₹2 lakh up to the maximum age of 100 years. A lump sum will be paid to the family during the Jeevan of the policyholder or after he completes 100 years ie this policy provides both income protection and insurance coverage in one go.
This policy can also be done in the name of a newborn up to 3 months old so many people do this policy in the name of their children. In that case, the maximum premium period is up to 30 years, they deposit money as much as they can and arrange the income for the rest of the child’s Jeevan. Later, the family dependent on him in his absence will also get a lump sum of insurance.
As a result it can be said that this Jeevan Umang policy is a boon to the common people.
Policy details
The details of Jeevan Umang policy are mentioned in the table below:
- Policy Name: LIC Jeevan Umang
- Plan no: 945
- Started: On 1st February 2020
- Interest rate: 8%
- Life Insurance Term: Up to 100 years of age
- Policy Term: 100 years – Age at the time of policy
- Minimum age: 90 days
- Maximum age: 55 years
- Term of premium payment: 15, 20, 25 and 30 years
- Age at the end of premium payment period: Minimum 30 years and maximum 70 years
- Mode of payment of premium: Monthly, Quarterly, Half-yearly and Annually
- Minimum amount: ₹2 lakh
- Maximum amount: There is no limit
Features of LIC Jeevan Umang Policy
Salient features of this policy are described below:
- The minimum sum insured for Jeevan Umang policy is ₹2 lakh and the sum insured above this sum must be a multiple of 25,000.
- This policy has the facility to choose 4 types of premium tenure namely 15 years, 20 years, 25 years and 30 years respectively.
- You can opt for monthly, quarterly, half-yearly or annual pattern of premium payment. You can even choose to have it deducted directly from your salary. In that case the monthly premium will be paid through National Automated Clearing House (NACH) only.
- A rebate of 2% per annum and 1% per half-yearly is given if you opt for the annual or semi-annual premium mode.
- This policy gives you a grace period of 30 days for quarterly or annual or half-yearly premium and 15 days for monthly premium. If the premium is not deposited within the grace period, your policy will be cancelled. In that case a maximum of 5 years is given to revive the policy.
- Rebates are also given on your sum insured such as:
Sum Insured Discount on premium ₹2,00,000 – ₹4,75,000 There is no discount ₹5,00,000 – ₹9,75,000 1.25% of Sum Assured ₹10,00,000 – ₹24,75,000 1.75% of Sum Assured ₹25,00,000 and above 2.00% of Sum Assured - From the expiry of your premium, you will enjoy returns at the rate of 8% per annum for Jeevan.
- If the insured completes 100 years, he will get a lump sum as maturity benefit at the end of the policy term.
- If the policy is taken out in the name of a child and the child is below 8 years of age, the risk coverage will start after completion of 2 years of the policy or if the child completes 8 years of age, whichever is earlier.
- In case of death of the policy holder during the policy term, the family or nominee will get the money as ‘death benefit’ in lump sum or regular installments as per their choice.
- Besides, you can borrow up to 80%-90% of the surrender value after two years of premium accumulation.
Benefits of Jeevan Umang Policy
Under this policy you will get the following benefits:
Death Benefit:
If the insured dies before the due date of maturity and the policy is still in force then –
- In case of death before commencement of risk coverage –
- In case of death while the risk is covered –
An amount equal to the total amount of premium paid without any tax and interest plus additional premium and rider premium if any will be paid.
(Additional premium is the extra payment due to increased whole risk and rider premium is the additional coverage at the convenience of the policy holder which is made available at an additional cost to the premium.)
Nominee will get “Death Sum Assured” as death benefit. In that case he will get “Simple Reversionary Bonus” and “Final Additional Bonus” if any.
In this case, the “Death Sum Assured” is more than 7 times of the annual premium or basic sum assured. This amount shall in no case be less than 105% of the total premium paid till the date of death.
(Basic Sum Assured is the minimum sum assured of a policy which is available after policy maturity.)
This death benefit can be taken in lump sum or in installments of 5 years, 10 years or 15 years and is specified by the policy holder at the time of taking the policy.
You can choose annual, half-yearly, quarterly or monthly intervals for taking money in installments. Below is a list of minimum installment amounts along with different payment types:
| Mode of installment payment | Minimum installment amount |
|---|---|
| Monthly | ₹5,000 |
| Quarterly | ₹15,000 |
| Semi-annually | ₹25,000 |
| Annually | ₹50,000 |
Survival Benefit:
If the policy holder completes the premium payment term –
- If the policy is in force, 8% of the Basic Sum Assured will be paid every year.
- The same amount will be paid every year till the Jeevan of the policyholder or the last anniversary before the date of maturity (whichever occurs earlier).
Maturity Benefit:
If the policy holder completes the day of maturity at the age of 100 years, he will get “Sum Assured on Maturity” along with “Simple Reversionary Bonus” and “Final Additional Bonus”.
Rider Benefits:
The following riders can be added to increase the coverage in LIC Jeevan Umang policy like –
- LIC Accidental Death and Disability Rider Benefit:
- LIC Accidental Benefit Rider:
- LIC New Term Assurance Rider:
- LIC New Critical Illness Benefit Rider:
- Cancer of specific severity
- Open Chest CABG
- First heart attack of certain severity
- Regular kidney dialysis
- Major Organ/Bone Marrow Transplantation
- Stroke resulting in persistent symptoms
- Permanent paralysis of limbs
- Multiple sclerosis or hardening of the arteries with persistent symptoms
- Aortic surgery or treatment of the aorta
- Primary (idiopathic) pulmonary hypertension or high blood pressure
- Alzheimer’s disease/ dementia
- Blindness
- Third degree burns
- Heart replacement or heart valve replacement
- Benign brain tumor
- Premium Waiver Benefit Rider of LIC:
If the insured dies or suffers disability due to an accident, LIC pays the accidental rider benefit assured along with the death benefit under the base plan.
LIC Accidental Death Benefit Rider is an add-on benefit. If this rider is taken, if the insured dies due to an accident, LIC will pay as financial compensation for that unfortunate event.
The benefits covered under this rider are active only during the Premium Paying Period (PPT). An insurer who has at least 5 years of premium payments remaining can take this rider.
LIC New Term Assurance Rider is an additional benefit added to the base policy which provides double death benefit. But keep in mind that this rider can be taken only at the inception of the policy.
This rider is also available only at policy inception. If you are diagnosed with any of the 15 critical illnesses under this rider, you will get financial assistance from this rider. They are respectively-
But in that case the benefit of the rider will not be more than the Basic Sum Assured and it is important that these benefits can be availed only during the premium period and the outstanding premium payment period should still be at least 5 years.
This rider can be taken only when the Jeevan assured is a minor. In that case, all future premiums of the policy are waived on the death of the policyholder. But keep in mind that this should be during the premium period and the premium payment period should be at least 5 years remaining.
Advantages of the loan:
Loan facility can be availed on Jeevan Umang policy as per the following conditions –
- After paying premiums for at least two years, the policyholder will qualify for the loan.
- If the loan is taken during the premium repayment period, the maximum loan amount can be up to 90% of the surrender value.
- In case of paid-up policies, the loan amount cap will be up to 80% of the paid-up value.
- If the loan is taken after the premium repayment period, the maximum loan amount is fixed in such a way that the annual interest rate does not exceed 50% of the annual survival benefit payable under the policy.
(A paid-up insurance policy is where the policyholder can enjoy the insurance coverage even after stopping paying the premium. In that case, his Sum Assured will be determined based on the amount of premium paid.)
Rebates:
These policies offer rebates on the mode of premium payment and the amount of Basic Sum Assured (BSA). Below is a list of these two types of rebates:
- Rebate on premium payment mode:
- Rebate on Sum Assured:
| Annually | 2% of tabular premium |
| Semi-annually | 1% of tabular premium |
| Quarterly, Monthly (NACH) and Payroll Deductions | There is no discount |
(The tabular cost of insurance refers to the cost of premiums that the policyholder pays to the insurance company.)
| Basic Sum Assured | Rebate |
|---|---|
| ₹2,00,000 – ₹4,75,000 | There is no discount |
| ₹5,00,000 – ₹9,75,000 | 1.25% BSA |
| ₹10,00,000 – ₹24,75,000 | 1.75% BSA |
| ₹25,00,000 and above | 2.00% BSA |
Income Tax Exemption:
This policy has the benefit of tax exemption on premium amount and death benefit and maturity amount under section 80C and 10(10D) of the Income Tax Act, 1969.
Paid-up value:
In case of LIC Jeevan Umang policy if the Jeevan assured has paid the premium for 2 years but then it is discontinued, the policy will be termed as paid-up policy. In that case the sum assured will depend on the premium paid.
- The paid-up sum assured in case of death benefit will be –
- The paid-up sum assured on maturity will be –
(Number of Premiums Paid / Total Number of Premiums) x Sum Assured on Death
(Number of Premiums Paid / Total Number of Premiums) x Sum Assured on Maturity
Grace period:
A grace period of 30 days is provided for payment of annual or half-yearly or quarterly premiums and 15 days for monthly premiums. If the premium is not paid within that specified grace period, the policy will lapse.
If the Jeevan assured dies before paying the premium within the grace period, the policy will continue and the death benefit will be paid minus the outstanding premiums.
Revival:
If the policyholder fails to pay the premium within the given grace period, the policy will be cancelled. In this policy the policy holder will have the opportunity to revive the policy within 5 consecutive years from the date of first outstanding premium.
Free-Look Period:
LIC has a free look period of 15 days from the policy inception date. If the policyholder is dissatisfied with the terms of the policy, he can cancel the policy within this period, in which case the policyholder will be refunded after deducting the proportionate risk premium (for base policy and rider if any) from the premium deposited.
Policy Surrender:
Policy Surrender i.e. complete withdrawal or termination of the policy before the expiry of the policy period. If the policyholder has paid the premium for two consecutive years, then he can surrender the policy. While surrendering the policy, the insurance company will pay the Special Surrender Value or the Guaranteed Surrender Value (whichever is higher).
LIC Jeevan Umang Policy Calculator
Here two different lists are given based on different sum assured amount and different type of payment of the policy. The amount of premium may vary slightly depending on the age of the policyholder. In this case, the age of the policy holder is 30 years.
The following premiums are exclusive of Goods and Services Tax (GST). In that case the current GST rate of 4.5% for the first policy year and 2.25% from the second year onwards will be included
- Basic Sum Assured ₹2 lakh
- Basic Sum Assured ₹5 lakh
| Term of premium | Annually | Semi-annually | Quarterly | Monthly |
|---|---|---|---|---|
| 15 years | ₹15739 | ₹7950 | ₹4015 | ₹1338 |
| 20 years | ₹10692 | ₹5400 | ₹2728 | ₹909 |
| 25 years | ₹7879 | ₹3980 | ₹2010 | ₹670 |
| 30 years | ₹6282 | ₹3173 | ₹1603 | ₹534 |
| Term of premium | Annually | Semi-annually | Quarterly | Monthly |
|---|---|---|---|---|
| 15 years | ₹38722 | ₹19562 | ₹9881 | ₹3294 |
| 20 years | ₹26105 | ₹13189 | ₹6663 | ₹2221 |
| 25 years | ₹19073 | ₹9637 | ₹4869 | ₹1623 |
| 30 years | ₹15080 | ₹7620 | ₹3850 | ₹1283 |
Example of LIC Jeevan Umang Policy:
Now let’s see how much benefit you can get from this policy with the help of an example!
Suppose your
Age = 35 years
Sum Assured = ₹5 lakh
Premium tenure = 20 years
Policy period = 100-35 = 65 years
- In that case 1st year GST 4.5% plus your annual premium will be (₹26755 + ₹1204) = ₹27959.
- GST 2.25% from 2nd year onwards your annual premium will be (₹26755 + ₹602) = ₹27357.
- So your total premium over 20 years will be ₹27959 + (₹27357 x 19) = ₹5,47,742
Now let’s see how much total return you will get at maturity!
- From the age of 55 you will get ₹40,000 per annum at the rate of 8% for a maximum of 100 years starting from your Jeevantime (₹40,000 x 46) = ₹18,40,000.
- You will get sum assured of ₹5 lakh.
- Along with this you will get “Vested Simple Revisionary Bonus” which accrues to your policy every year, i.e. ‘Sum Assured / 1000 X Policy Term X VSRB Rate’ in this case a total of ₹16,90,000.
- Apart from this “Final Additional Bonus” which is given to you only once in case of policy term of 15 years or more i.e. ‘Sum Assured / 1000 X FAB Rate’ in this case you will get a total of ₹17,75,000.
- From the maturity of this policy you will get a total return of ₹18,40,000 + ₹5,00,000 + ₹16,90,000 + ₹17,75,000 = ₹58,05,000.
But in actual practice the number of policyholders enjoying 100 years maturity is very few. In that case, let’s see the benefits of death benefit.
- If the policyholder dies after 5 years of taking the policy then the nominee will get Sum Assured + VSRB Total (₹5,00,000 + ₹1,30,000) = ₹6,30,000
- If death occurs after 15 years nominee will get Sum Assured + VSRB + Final Additional Bonus Total (₹5,00,000 + ₹3,90,000 + ₹10,000) = ₹9,00,000
- If death occurs after 30 years nominee will get Sum Assured + VSRB + Final Additional Bonus Total (₹5,00,000 + ₹7,80,000 + ₹5,50,000) = ₹18,30,000
LIC Jeevan Umang Policy Questions (FAQ)
What kind of Life Insurance?
LIC Jeevan Umang policy is not linked to market risk and is a Life Insurance plan that provides both protection and benefit to the policyholder throughout Jeevan. This plan provides annual returns from premium payment till maturity and after maturity sum assured plus bonus returns a large amount.
What are the benefits of LIC Jeevan Umang Policy?
This plan provides both income and protection to the policy holder’s family. This policy offers returns and Jeevan coverage at the rate of 8% per annum from the date of completion of premium payment till the maximum age of 100 years and after maturity you will also get a huge return on sum assured and bonus. Besides, the premium of this policy is exempt from income tax under section ’80C’ and the return on maturity is fully tax exempt under section 10D(d) of the Income Tax Act.
Does Jeevan Umang policy give 8% guaranteed return?
The return of this policy is not linked to market risk and here after paying your premium you get Jeevan coverage at 8% of Sum Assured per annum, up to and including your maximum age of 100 years. Sum Assured and Bonus sum total returns at maturity of 100 years of the policyholder, otherwise the nominee will get a large death benefit.
Can a loan be taken from LIC Jeevan Umang policy?
Yes, loan can be taken from this policy after paying minimum 2 years of premium. The loan amount will depend on the status of premium paid. In that case, up to 80% – 90% of the surrender value of the policy can be borrowed.
Does Jeevan Umang policy give monthly returns?
After paying the premium, the policyholder will get 8% of the principal sum assured every year till maturity. You can choose to pay that maturity or death benefit in monthly installments of 5, 10, or 15 years.
Is Jeevan Umang policy tax free?
The premiums of this policy are exempt from income tax under Section 80C of the Income Tax Act, 1961. Also, the term amount received is also kept fully tax free under Section 10(10D).
What are the disadvantages of LIC Jeevan Umong policy?
Although the premium is exempt from income tax on these policies, the policyholder has to pay extra for GST or tax. As a result the amount of return is less in that case.
