Features & Benefits of LICś Hot-Selling Cake Jeevan Umang.

1. Introduction: The Importance of Whole Life Insurance

Life insurance is more than just a financial product; it is a financial safety net designed to protect loved ones against unforeseen circumstances. In particular, whole life insurance policies extend coverage for the entirety of one’s lifetime—usually up to the age of 99 or 100—making them especially suited for individuals seeking long-term security and a hedge against life’s uncertainties.

While term plans provide coverage for a defined period (like 15, 20, or 30 years), a whole life plan ensures that the insurance coverage remains in force for as long as you live, as long as you continue meeting the policy requirements.

Among the various whole life products available in India, the Jeevan Umang Policy from LIC stands out as a participating non-linked plan for long-term coverage with periodic payouts. When you choose a policy like LIC Jeevan Umang, you are not just buying an insurance plan; you’re investing in a financial strategy that combines protection, savings, and steady returns over an extended period.

2. Overview of LIC and Its Legacy

As many of you know the Life Insurance Corporation of India (LIC) is a Government-owned Insurance Company and was established in 1956. Over the decades, LIC has built a reputation for trustworthiness, stability, and extensive market reach. Serving millions of policyholders, LIC is synonymous with reliability in the Indian insurance landscape.

1. Diverse Portfolio of Plans: LIC’s product range includes term plans, endowment plans, money-back plans, pension/annuity plans, and whole life plans, ensuring there is a plan for practically every need.
2. Broad Distribution Network: With thousands of branches, agents, and now digital platforms, LIC ensures that its products can reach individuals in even the most remote areas of the country.
3. Claim Settlement Track Record: LIC consistently maintains a strong claim settlement ratio, which is a testament to its customer-centric philosophy and robust underwriting processes.

When investing in a LIC policy such as the Jeevan Umang Policy, you are dealing with a public sector giant that has a longstanding history of fulfilling insurance and savings needs across generations.

3. What Is the Jeevan Umang Policy?

The Jeevan Umang Policy is classified as a non-linked, with-profits, whole life assurance plan. “Non-linked” means the returns are not directly tied to market performance, which sets it apart from unit-linked insurance plans (ULIPs). “With-profits” indicates that the policy participates in LIC’s profits through bonuses, potentially enhancing the overall payout.

Core Objectives of the Jeevan Umang Policy

1. Lifetime Insurance Coverage: Coverage extends until the policyholder is 100 years old, ensuring a financial shield for loved ones throughout the policyholder’s lifetime.
2. Survival Benefits: After the premium-paying term (PPT) ends, the policyholder starts receiving annual survival benefits—a feature that works much like a steady income or a pension.
3. Maturity and Death Benefit: If the policyholder reaches 100 years, they receive a lump sum maturity payout. If they pass away before that, the nominee receives a death benefit.

Overall, the Jeevan Umang Policy combines long-term protection with periodic payouts, making it attractive for individuals who wish to secure both a legacy for their family and a consistent stream of income in their later years. So this policy is a hot-selling cake.

4. What are the Key Features of Jeevan Umang?

To appreciate the value proposition of the LIC Jeevan Umang plan, let’s explore the unique features that it offers to its holders:

4.1 Whole Life Coverage

• Coverage Tenure: The insurance coverage remains active until the policy turns 100 years old, making it a true whole life policy. Also, you have full freedom to withdraw the fund at any year if required in case of any emergency but the policy terminates from that point.
• Benefits for Legacy Planning: This extended coverage suits individuals who wish to pass on wealth or ensure their dependents are financially secure, regardless of when death occurs.

4.2 Annual Survival Benefit

• Guaranteed Annual Payout: After the completion of the premium-paying term, the policyholder starts receiving 8% of the Basic Sum Assured every year as a survival benefit without any tax deducted (up to 5Lakhs survival benefit).
• Long-Term Cash Flow: These annual survival benefits can augment retirement income or fund other financial obligations.

4.3 Maturity Benefit

• At Age 100: If you survive until 100, the Sum Assured plus accrued Simple Reversionary Bonuses and any Final Additional Bonus (FAB) is paid as a maturity benefit.
• A Lump Sum for Late Life Needs: This final payout can help cover late-life expenses, and medical emergencies, or serve as a bequest to heirs.

4.4 Death Benefit

• Protection for Loved Ones: In the event of the policyholder’s demise, the nominee receives the Sum Assured on Death plus accumulated bonuses and, if applicable, the Final Additional Bonus.
• No Deduction of Survival Benefits: The survival benefits paid out while the policyholder was alive do not reduce the death benefit—an essential differentiator from some other plans.

4.5 Simple Reversionary Bonus & Final Additional Bonus

• Simple Reversionary Bonus: Declared yearly and added to the policy but paid out only upon maturity or death.
• Final Additional Bonus (FAB): A one-time bonus that may be declared if the policy has run for a specific number of years, further enhancing the payout.

These features collectively ensure the Jeevan Umang Policy fulfills two critical roles: (1) lifelong insurance coverage, and (2) regular survival payouts for the policyholder in their post-PPT years.

5. What are the Eligibility Criteria and Minimum Sum Assured to Invest in Jeevan Umaang?

While the policy is designed to cater to a broad audience, certain eligibility parameters must be met:

These criteria ensure a broad spectrum of individuals—ranging from new parents to middle-aged or even older adults—can leverage the LIC Jeevan Umang plan as a long-term savings and insurance instrument.

6. Premium-Paying Terms and Modes

6.1 Selecting the Right PPT

One of the distinguishing aspects of the Jeevan Umang Policy is the flexibility in the premium-paying term:

• 15-Year PPT: Suited for those who wish to finish premium payments relatively quickly but still enjoy a lifetime of coverage.
• 20-Year PPT: Often a middle ground, balancing manageable premiums with an extended coverage period.
• 25-Year PPT and 30-Year PPT: Longer PPTs result in lower annual or monthly premiums but require a more extended commitment to premium payments.

6.2 What are the Payment Modes that a Jeevan Umang Policy Holder Can Opt For?

Policyholders can opt for annual, half-yearly, quarterly, or monthly premium payment frequencies. LIC also facilitates online premium payment and ECS (Electronic Clearing Service) for ease and convenience. You can even change the premium payment mode to any mode like anual to monthly or any other combination just buy visiting your nearest LIC office or contacting to your LIC Agent.

Things to Note:

• If you prefer to minimize total interest costs or additional loading on frequency, annual payments might be more economical.
• Those with monthly cash flow constraints may opt for monthly or quarterly modes for budget-friendly installments.

7. How Jeevan Umang Policy Works: A Step-by-Step Breakdown?

Understanding the lifecycle of the Jeevan Umang Policy clarifies its benefits:

1. Inception: The policyholder chooses the Basic Sum Assured, premium-paying term, and premium payment frequency (annual, semi-annual, quarterly, or monthly).
2. Premium Payment: During the chosen PPT (for example, 20 years), the policyholder consistently pays the required premiums.
3. Coverage During PPT:
   • If the policyholder passes away during this time, the nominee receives the death benefit (Sum Assured on Death + accumulated bonuses).
   • If the policyholder survives, they simply continue paying premiums.
4. Post-PPT Survival Benefits: Starting from the end of the PPT, the policyholder receives 8% of the Basic Sum Assured annually until they turn 99 years old (provided they are alive and the policy is in force).
5. Maturity at Age 100:
   • If the policyholder is alive, the policy matures, and LIC pays out the Basic Sum Assured + accrued Simple Reversionary Bonuses + Final Additional Bonus (if any).
   • If the policyholder passes away before 100, the death benefit is paid to the nominee, and the policy terminates.

8. What is Survival Benefits? Explained in Detail.

What is Survival Benefits?

In life insurance, “Survival Benefits” refer to the payouts a policyholder receives if they outlive a specified term or meet certain conditions within the policy’s duration. Unlike death benefits, which are paid to beneficiaries when the insured passes away, survival benefits reward the policyholder for living beyond the policy’s maturity date or for reaching certain milestones.

These benefits can be in the form of periodic cash payouts or a lump sum, depending on the type of policy. This feature can serve as both a savings and protection tool, helping individuals meet financial goals while still securing a safety net for their loved ones.

How Survival Benefits Work in Jeevan Umang Policy?

A unique selling point of the Jeevan Umang Policy is the annual survival benefit. Let’s detail how it works:

This annual payout structure stands out from standard money-back or endowment plans, which typically have fixed intervals for payouts rather than yearly distributions after the premium term ends.

9. Bonuses in Jeevan Umang

Because the Jeevan Umang Policy is a with-profits plan, it participates in LIC’s annual surplus distribution. Consequently, policyholders could receive two types of bonuses:

1. Simple Reversionary Bonus:
   • Declared at the end of each financial year.
   • Accumulates into the policy and is payable at maturity or upon the policyholder’s death.
   • The bonus is determined by LIC’s performance, interest rates, mortality experience, and expense management.
2. Final Additional Bonus (FAB):
   • A one-time bonus is declared at the time of claim settlement if the policy has been in force for a sufficiently long duration.
   • Dependent on LIC’s overall profits and the specific policy duration.

Note: While the 8% annual survival benefit is guaranteed, the bonus components are not guaranteed. However, given LIC’s long history of consistent bonus declarations, the possibility of significant bonus additions remains a strong attraction for many policyholders.

10. Riders and Additional Coverage that an Insurance Policy Holder can Opt.

One significant advantage of LIC policies lies in the array of rider options available, allowing policyholders to customize coverage according to their needs at the time of buying any policy:

• Accidental Death and Disability Benefit Rider (ADDB): Provides an extra sum assured in case of accidental death, along with disability coverage in some cases (premium waiver or monthly income).
• New Term Assurance Rider: Offers an additional sum assured for an affordable extra premium, boosting the overall death cover.
• Critical Illness Rider (where applicable): Pays out a lump sum if diagnosed with certain critical illnesses, helping manage high treatment costs.
• Premium Waiver Rider: Ensures that if certain stipulated conditions (like total disability) occur, future premiums are waived off, yet the policy remains in force.

While riders enhance coverage, they also lead to small additional premiums. Weigh the costs vs benefits carefully, considering your health profile, financial commitments, and family’s future needs.

11. Policy Loan Facility

Let’s consider you need urgent funds for any emergency now you have two ways one is you can surrender the policy and get the money that you need but the benefits and all other facilities that you are enjoying in this policy would be stopped if you surrender the policy.

The second option is you can apply for a loan against the policy you hold. LIC issues loan against the policy but you will have the freedom to enjoy the benefits and security that the policy provides to its policyholder.

Traditional life insurance policies are often criticized for poor liquidity. However, the Jeevan Umang Policy includes a loan facility once the policy acquires a surrender value—usually after you’ve paid at least two or three years of premiums.

1. Loan Eligibility: The policy must be in force, and a minimum number of premiums should be paid.
2. Loan Amount: Generally, you may borrow up to 80%-90% of the surrender value of the policy.
3. Interest Rate: LIC periodically decides the interest rate, and it is communicated at the time of availing the loan.
4. Repayment: Policyholders can repay the loan either in installments or a lump sum.

This feature gives financial flexibility if you face an urgent need for funds—like a health emergency, education expenses, or short-term liquidity crunch—without surrendering the policy altogether.

12. Tax Benefits

1. Section 80C Deduction: Premiums paid (up to a specified limit, currently INR 1.5 lakh per year) may be deducted from your taxable income, reducing your tax liability.
2. Section 10(10D) Exemption: Maturity payouts, survival benefits, and death benefits are generally tax-free, provided your annual premiums do not exceed 10% of the Sum Assured (and other conditions are met).

Important: Tax regulations can change. It’s wise to consult a tax professional or your Insurance advisor to understand the latest provisions and ensure you comply with all criteria for claiming deductions and exemptions.

13. Suitability: Who Should Opt for Jeevan Umang Policy?

This whole life insurance plan can be highly beneficial for specific demographic profiles:

1. Individuals Seeking Lifetime Coverage
   • If you want an insurance cover that never expires before you turn 100, the Jeevan Umang Policy fits perfectly.
2. Retirees or Soon-to-Be Retirees
   • The annual survival benefit acts as a stable stream of retirement income.
3. Parents Planning Long-Term
   • You can buy the policy when a child is just 90 days old, locking in lower premiums and establishing a financial safety net as the child grows.
4. People Preferring Conservative Savings
   • If you wish to avoid market volatility and still aim for a moderate but stable return, this non-linked policy could be appealing.
5. Estate Planning Goals
   • Lifelong coverage means your heirs or nominees will eventually receive the death benefit if you do not make it to 100 or the maturity amount if you do—an excellent instrument for legacy creation.

14. Scenario Illustrations

14.1 Scenario 1: Early Policy Start

• Age at Entry: 25 years
• Premium-Paying Term: 25 years
• Sum Assured: INR 10 lakh

1. The policyholder pays premiums from age 25 to 50.
2. From the end of year 25 (when the policyholder turns 50) to age 99, they receive 8% of INR 10 lakh (i.e., INR 80,000) annually.
3. If the policyholder reaches 100, they receive INR 10 lakh + accumulated bonuses + Final Additional Bonus as a maturity benefit.
4. If they pass away at any point during the term, the nominee receives the death benefit (Sum Assured on Death + bonuses).

14.2 Scenario 2: Mid-Life Coverage

• Age at Entry: 40 years
• Premium-Paying Term: 20 years
• Sum Assured: INR 5 lakh

1. The policyholder pays premiums from age 40 to 60.
2. From the end of year 20 (age 60) to 99, they receive 8% of INR 5 lakh (INR 40,000) annually.
3. At age 100, if they survive, the policy provides a maturity payout of INR 5 lakh + accumulated bonuses + FAB.

These scenarios highlight how the Jeevan Umang Policy can serve as a retirement planning tool for individuals in various life stages.

15. Surrender Value and Policy Revival

15.1 Surrender Value

Though the policy is designed for the long term, a policyholder might face circumstances where surrendering is the only option:

• Minimum Premiums Paid: Typically, you must pay at least two or three years’ premiums for the policy to acquire a surrender value.
• Guaranteed Surrender Value (GSV): A statutory percentage of the total premiums paid (excluding extra premiums and taxes).
• Special Surrender Value (SSV): This can be higher than the GSV based on LIC’s discretion, policy duration, and accumulated bonuses.

Caution: Surrendering the policy prematurely can lead to a financial loss and forfeit future potential bonuses and life coverage. Explore loans or paid-up options before surrendering.

15.2 Policy Revival

• Lapsed Policy: If you miss premium payments beyond the grace period, the policy might lapse.
• Revival Period: LIC often allows a revival window of 2-5 years from the date of the first unpaid premium.
• Conditions: You must pay all overdue premiums with interest and may need to undergo a medical checkup for reinstatement.

16. Free Look Period, Grace Period, and Other Key Terms

16.1 What is the Free Look Period for Jeevan Umang Policy?

• Duration: Usually 15 days from receiving policy documents (30 days if purchased online).
• Purpose: If the policyholder disagrees with any term or condition, they can return the policy within this window and receive a refund of premiums after nominal charges.

16.2 Grace Period

• Premium Modes: For annual, half-yearly, or quarterly payments, a 30-day grace period is standard. For monthly premiums, it is typically 15 days.
• Benefit: You remain covered during the grace period. If you pay within this window, the policy does not lapse.

17. Application and Documentation Process

Whether you’re purchasing Jeevan Umang Policy online or via an LIC agent, the steps are relatively straightforward:

1. Choose Sum Assured and PPT: Based on your financial goals, risk appetite, and life stage.
2. Get a Premium Quote: Use LIC’s premium calculators or request a quote from your agent.
3. Application Form: Fill in personal, financial, and nominee details. Be honest about your medical history.
4. Medical Underwriting: For higher sums assured or older ages, LIC might require a medical checkup.
5. Document Submission: KYC (proof of identity, address), age proof, photographs, and any required medical reports.
6. Premium Payment: Pay the initial premium via cheque, online payment, or ECS.
7. Policy Issuance: Post underwriting and approval, the policy document is issued. Keep it in a safe place and inform your family or nominee about its location.

18. Claim Settlement Procedure

LIC is known for its customer-friendly claim settlement. Here’s an overview:

1. Intimation: The nominee or family member must inform the serving LIC branch immediately upon the policyholder’s death, providing basic details like the policy number, date of death, and cause of death.
2. Documents Required: Death certificate, policy document, identity proof of the nominee, bank account details (for claim payout), and if it’s an accidental death, additional documents like FIR or postmortem report may be required.
3. Processing: LIC verifies all documents. If everything is in order, the claim is settled promptly.
4. Payment: The settlement amount (death benefit) is typically transferred via NEFT or direct bank credit.

In case of maturity, the policyholder needs to submit the policy bond and any other formalities required by LIC to receive the maturity benefit.

19. Advantages and Disadvantages Of Jeevan Umang

20. Common Myths and Misconceptions

1. Myth: “Money already paid as survival benefit will be deducted from the final payout.”
   • Reality: The death benefit or maturity benefit remains intact. Paid survival benefits do not reduce these amounts.
2. Myth: “No returns if the policyholder dies during the PPT.”
   • Reality: The nominee still receives the Sum Assured on Death + accumulated bonuses, safeguarding the family’s financial interests.
3. Myth: “The policy has zero flexibility for financial emergencies.”
   • Reality: Once the policy attains surrender value, you can take a loan against the policy rather than having to surrender it.
4. Myth: “This plan is too expensive.”
   • Reality: While it is costlier than a term plan, the policy’s long-term survival benefits, potential bonuses, and maturity amount provide tangible value.

21. Tips for Maximizing Policy Benefits

1. Start Early: The younger you are, the lower the premium for a given Sum Assured.
2. Choose an Optimal PPT: Align the PPT with your retirement age or your child’s educational timeline, ensuring you receive survival benefits when you most need them.
3. Add Riders Selectively: Opt for riders that address your most pressing risks, but avoid over-insuring.
4. Maintain Timely Payments: Regular premium payments ensure bonus accrual and keep the policy in force.
5. Avoid Unnecessary Surrenders: If you need funds, consider the policy loan option or partial liquidity alternatives before surrendering.

22. Frequently Asked Questions (FAQs)

23. Conclusion: Making an Informed Choice

The Jeevan Umang Policy is a holistic insurance product designed for individuals who prefer long-term financial security and a steady stream of periodic payouts once their premium-paying term concludes. As a whole life plan, it is especially well-suited to anyone looking to secure lifetime coverage, ensure a financial legacy for dependents, and also receive annual survival benefits that can function as a secondary income.

While the guaranteed 8% annual survival benefit on the Basic Sum Assured is a standout advantage, the potential for additional bonuses adds another layer of value, enhancing total returns. Moreover, the policy’s tax benefits, loan facility, and flexible PPT underscore its suitability for a wide range of individuals, from parents safeguarding a child’s future to adults approaching retirement who desire consistent income post their active earning years.

That said, like any financial product, the Jeevan Umang Policy is most beneficial when it aligns with your long-term goals and financial circumstances. If you are seeking pure risk coverage at minimal cost, a term insurance policy could be more appropriate. If you want direct stock market exposure, a ULIP might be a better fit. However, if your priority is a balance of security, guaranteed regular payouts, and whole-life protection, then LIC’s Jeevan Umang emerges as a robust and dependable choice.

Ultimately, it’s advisable to conduct a holistic review of your financial plan, assess your immediate and future obligations, and consult with a certified financial advisor or an experienced LIC agent. This ensures you make the best choice for your unique needs and maximizes the potential of the Jeevan Umang Policy to fortify your family’s financial future and support your personal aspirations across your lifetime.