LIC Jeevan Umang Plan
LIC Jeevan Umang Plan is a whole-life assurance plan, designed to offer a dual benefit of income and protection to your family in your absence. This plan provides yearly survival benefits from the end of the premium-paying period until maturity. It also offers a lump sum payout at maturity or in the event of the policyholder's death during the policy term
LIC Jeevan Umang- An Overview
LIC Jeevan Umang is a life assurance plan in which the policy holder will be covered till he/she turns 100 years of age. The key benefit of this plan is that it comes with dual benefits of income and insurance protection to help the family of the insured in his/her absence. The assured benefits act as a strong financial backup in case of any emergency.
Why Choose LIC Jeevan Umang?
Tax-free Maturity & Death Benefit
All proceeds from LIC Jeevan Umang, be it on the death of the policyholder, at maturity of the policy, or the annual survival benefits, are entirely tax free under Section 10(10D) of the Income Tax Act, 1969.
Life-long Risk Cover till the Age of 100
The life cover against the risk of death of the policyholder starts from the date of issuance and lasts till he/she reaches 100 years of age.
Guaranteed Income from the Age of 30
Policyholders can buy this policy for themselves or their children and secure a lifetime annual income until 100. These are paid survival benefits for surviving every year till coverage ends.
Features of LIC Jeevan Umang Plan
This LIC plan provides annual survival benefits starting at the end of the premium payment tenure and continues till maturity.
The plan also provides a lump sum amount as a maturity benefit at the end of the policy term, if the insured survives.
The death benefit can be claimed if the policyholder dies during the policy tenure. It is paid either as a lump sum or in regular installments.
The plan offers an option to choose from different premium paying terms i.e. 15 years, 20 years, 25 years, and 30 years.
LIC Jeevan Umang policy is a participating policy that entitles buyers to additional bonuses depending on the profits earned by LIC in a year.
There are discounts available for choosing the either half-yearly or yearly premium payment mode.
Benefits Offered by LIC Jeevan Umang
Here are some of the prime benefits of the LIC Jeevan Umang plan:
Death Benefit
On Death of the Life Assured Before the Commencement of Risk
Nominees can claim the entire premium amount paid (Return of premium).
On Death of the Life Assured After the Commencement of Risk & Before Maturity
Nominee can claim the higher amount between 7 times the annual premium and the basic sum assured amount. Applicable bonuses such as the simple reversionary bonus and final additional bonus are also paid out along with the death benefit.
Survival Benefit
If the life assured survives the premium payment tenure and provided the policy is in force, LIC Jeevan Umang starts paying out an annual survival benefit.
It is equal to 8% of the basic sum assured amount.
The same amount is offered every year till the policyholder survives or till the last plan anniversary before the date of maturity (whichever event occurs earlier).
Maturity Benefit
In case the life assured survives the specified maturity date, then LIC offers them the basic sum assured along with the simple reversionary bonus and final additional bonus if any.
Loans
The loan facility can be availed under the LIC Jeevan Umang plan as per the following terms and conditions:
A policyholder is eligible for a loan if they have paid premiums for a minimum of 2 years without fail.
If in case the loan is availed during the premium paying term, the maximum loan amount is limited to 90% of the surrender value.
In the case of paid-up policies, the cap on the loan amount is 80% of the paid-up value.
Any loan unpaid shall be recovered from the claim proceeds during exit along with the applicable interest.
How does LIC Jeevan Umang work?
Let’s take the example of Dev who is a 30-year-old male at the time of buying this policy. Assuming that he is looking for the following coverage -
Sum Assured - Rs. 10,00,000
Policy Term - (100 minus 30 years) = 70 years
Premium Paying Term - 20 years
Using the LIC Jeevan Umang calculator, the annual premium that Dev will have to pay comes to be Rs. 54,036 (including taxes).
* Note - Taxes include GST of 4.5% levied on 1st-year premiums and 2.25% on premiums payable in the subsequent years.
Let’s see what benefits Dev or his family will be entitled to in the following cases -
If Dev dies within the premium paying term
Dev’s family will receive the death benefit, which is either 7 times the annual premium (Rs. 3,78,252) or the Basic Sum Assured plus applicable bonuses (Rs. 10,00,000 + bonus). Since the latter is higher, LIC will pay this amount.
If Dev dies 10 years after the premium paying term ends
Dev will receive annual survival benefits for surviving these 10 years. It is equal to 8% of the BSA. Therefore, he would have received Rs. 80,000 annually for 10 years till his death.
On his death, Dev’s family can claim the death benefit amount, which will be equal to (Rs. 10,00,000 + bonuses).
If Dev survives the policy term of 70 years
Dev will receive the Basic Sum Assured plus applicable bonuses (Rs. 10,00,000 + bonus) as maturity benefit.
Dev will also have received annual survival benefits starting from the end of the premium paying term till the end of the policy term. Each year of survival entitles Dev to 8% of the BSA, which is equal to Rs. 80,000 per year in this case.
Additional Benefits available Under LIC Jeevan Umang Policy
Rider Benefit
The following riders can be added to the LIC Jeevan Umang plan to increase the coverage.
LIC Accidental Death and Disability Rider Benefit
If the insured dies or suffers from a disability due to an accident, LIC pays out the accidental rider benefit sum assured along with the death benefit under the base plan.LIC Accidental Benefit Rider
The benefit that is covered under this rider is only active during the premium paying tenure (PPT). One can add this rider on the condition that at least 5 years are remaining in the PPT.LIC New Term Assurance Rider
This option can be availed at the inception of the LIC Jeevan Umang policy. The additional sum assured under the rider is paid to the nominee of the policy along with the basic sum assured if the insured dies during the policy tenure.LIC New Critical Illness Rider
This rider can be availed at the inception of the policy only. It offers financial respite to policyholders if they are diagnosed with any one of the 15 critical illnesses covered under this rider.LIC Premium Waiver Benefit
If the policyholder opts for this rider option, then in the event of the demise of the policyholder all the future premiums of the policy are waived off. This rider can help if the life assured is a child and the policyholder is the parent.Death Benefits in installments
Under the policy, there is an option to receive death benefits in installments over a 5/10/15-year period rather than a lump sum payment. The installments must be paid in advance at chosen intervals of annually, half-yearly, quarterly, or monthly, subject to a minimum installment amount for different payment modes, such as
Other Details of the LIC Jeevan Umang Plan
Grace Period
A grace period is 15-30 days offered by LIC to policyholders who have failed to pay a due premium amount. The policy lapses if payment is not done by the end of this period.
Free-look Period
A free look period of 15 days from the date of policy initiation is offered by LIC. During this period, the policyholder can cancel the policy if he/she is dissatisfied with its terms and conditions.
Policy Surrender
The policyholder can surrender the policy, provided the premiums are duly paid for two consecutive years. On surrender of the policy, the insurance company will pay a surrender value equal to the special surrender value or the guaranteed surrender value (whichever is higher).
Paid-up Value
In case the life assured has paid premiums for 2 years but stops after, then the policy will continue as a paid-up policy. In such cases, the sum assured shall decrease as per the remaining premiums.
The paid-up sum assured on death is equal to:
Number of premiums paid/ total number of premiums to be paid X sum assured on death
Similarly, the paid-up sum assured on maturity is equal to:
Number of paid premium/ total number of premiums to be paid X sum assured on maturity
Tax Implications of LIC Jeevan Umang
Statutory taxes, if any, are imposed by the constitutional Tax Authority of India as per the prevailing tax laws. The tax rates are subject to revision from time to time. The taxes applicable shall be paid by the policyholder on the premium for the base policy and riders.
In terms of Income Tax, policyholders can enjoy tax benefits on the premium amount and the death and maturity proceeds under sections 80C and 10(10D) of the Income Tax Act of 1969.
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