The New Jeevan Nidhi Plan from the Life Insurance Corporation of India (LIC) is a ‘with profit’ pension plan. This policy provides a risk cover against death during the policy’s deferment period and also offers the policyholder annuity after the date of vesting. Policyholders can also purchase LIC’s Accidental Death and Disability Benefit Rider to enhance the coverage offered by this policy. Policyholders can claim tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961.
Insurers usually set an eligibility criteria that policy buyers will have to meet in order to be able to purchase the policy.
|Parameters||Criteria for eligibility|
|Minimum age at entry||20 years|
|Maximum age at entry||60 years|
|Minimum age at vesting||55 years|
|Maximum age at vesting||65 years|
The sum assured is a certain amount of money that is guaranteed to the policyholder/nominee by the insurer, before the addition of any bonuses.
|Minimum Sum Assured||Rs.1 lakh|
|Maximum Sum Assured||No limit|
The premium is a fixed sum of money that will have to be paid to the policyholder on a regular basis in order to avail the policy’s coverage.
|Premium Payment Mode||
*Premiums will vary based on age, location, plan term, GST, and other factors.
|Benefit on Vesting||Upon attaining the date of vesting, the sum assured, Guaranteed Additions, and bonuses will be made available to the policyholder.
With this amount, the policyholder can choose to:
|Participation in Profits||From the 6th year of the policy tenure, the policy will accumulate profits in the form of a Final Additional Bonus and Simple Reversionary Bonus.|
Policy buyers can also choose to customise their coverage by opting for LIC’s Accidental Death and Disability Benefit Rider by paying an extra premium. With this rider, if the policyholder meets with an accidental death, the rider benefit will be paid as a lump sum amount, in addition to the base policy’s death benefit. On the other hand, if the policyholder sustains severe injuries due to an accident, the rider benefit will be paid in equal instalments over a 10-year period.
This policy comes with a suicide exclusion. For Single Premium policies, if the policyholder commits suicide within 1 year of purchasing the policy, 90% of the premium paid will be paid to the nominee. For Regular Premium policies, if the policyholder commits suicide within 1 year of buying the plan, 80% of the premiums paid will be given to the nominee. If the policyholder commits suicide within 1 year of reviving the policy, the insurer will pay either 80% of the total premiums paid or the policy’s surrender value.
|Guaranteed Additions||Guaranteed Additions will be paid for the first 5 years at the rate of Rs.50 for every thousand of the sum assured, for each policy year completed.|
|Rebates||Rebates can be claimed upon opting for a sum assured over Rs.3 lakh or choosing the annual or bi-annual mode of premium payment.|
|Policy Revival||Lapsed policies can be revived with 2 years from the date of the first due premium that was unpaid.|
|Surrender Value||The plan can be surrendered while the deferment period is running. Surrender value, as applicable, will be paid.|
|Loan||Policyholders can’t opt for a loan against this policy.|
|Free-Look Period||The insurer provides a free-look period of 15 days, during which the policy can be returned.|
Policyholders can claim tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961. Tax laws can change from time to time, and hence policyholders will have to consult with a tax advisor for more information.
The New Jeevan Nidhi Plan from LIC offers policyholders the dual benefit of a comprehensive risk cover and a savings option. In addition to the policy-related payouts, one is also entitled to receive bonuses that can further increase one’s corpus. With regards to the insurer, LIC is one of the most preferred insurance companies in the country. They have a claim settlement ratio of 98.33% for FY15-16 and have resolved 100% grievances during the same year. LIC has also won a range of awards over the past few years.