LIC’s Jeevan Saral is an Endowment Assurance plan that provides both life security and money savings. As the name suggests, Jeevan Saral is about simplifying your life. Any eligible person can financially secure the family members in case of an unexpected demise during the policy term. The beneficiary would be provided a one-time hassle-free lump sum in the form of the death benefit.
This death benefit would be in direct proportion to the number of premiums paid. In case the life assured effectively completes his/her policy term and comes to the closure of the plan, then he/she would be awarded a single lump amount in the form of maturity benefit. This Maturity Sum Assured would depend on the life assured’s age at the entry of the plan and would be paid on survival at the end of policy duration. A person can avail this policy by choosing the amount and mode of premium payments. Moreover, the Jeevan Saral provides the flexibility of liquidity and term.
Maturity Benefits in Jeevan Saral
LIC’s Jeevan Saral provides Maturity Sum Assured as Maturity SUM Assured + Loyalty Addition(if any). The Maturity Sum Assured would depend on the age of the life assured at the time of his/her policy purchase. It would also depend on the duration of the policy term and the amount opted for premium payments. The life assured would also be supplied any Loyalty addition (if applicable) in the form of a lump amount along with the Maturity Sum Assured for showing loyalty to the company.
Death Benefits in Jeevan Saral
In the instance of an untimely demise of the Life Assured, single, one-time lump money would be provided to the beneficiary. This is known as a death benefit and is payable only in the course of the policy duration. The death benefit would be equivalent to 250 times the monthly premiums. The beneficiary may also receive any loyalty additions along with premium returns (excluding first-year premiums and extra rider premiums) in the form of one lump value along with the basic death benefits. If after the completion of the plan the policyholder suffers an unfortunate death then there would be no amount payable.
Supplementary/Extra Benefits
The Jeevan Saral policy of LIC provides the facility of supplementary or extra benefits along with the basic plan. A policyholder could opt to obtain extra financial security for his/her beneficiary with the help of this rider in the instance of an unexpected demise. Moreover, the addition of this rider increases the maturity benefit amount, thereby securing the old age of the plan holder. The supplementary/extra benefits are elective riders that could easily be appended to the basic plan. The life assured would have to pay added premium values to avail this exclusive facility.
Tax Benefits in Jeevan Saral
The premium amounts up to 1lakh INR are permitted as a deduction from annual taxable incomes. This tax redemption is under India’s Income Tax Law section 80C. Moreover, the life assured could also enjoy tax exemption on his/her Maturity Benefit under India’s income tax law section 10(10)D (provided entire tax conditions are met).
Policy Loan in Jeevan Saral
The policyholder can get a loan at 9% annual interest rate after full premium payment of first three years in LIC Table 165. Customers can contact the nearest LIC branch for loan eligibility and amount.
Surrender Value in Jeevan Saral
LIC’s Jeevan Saral provides its policyholders with the option for complete surrender or partial surrender of their plans in exchange for monetary value. Hence, if for some reason the policyholder is unable to pay further premiums against the policy and is in need of a large cash amount then he/she can easily surrender back the policy and receive a surrender value. This surrender amount would be the higher value of the special surrender and guaranteed surrender value.
If the policyholder wishes than he/she may only opt for a partial surrender. The values on surrender amounts are as under
- Premiums amounts paid for a minimum of 3 years but less than 4 years = 80 percentile of Maturity Sum Assured
- Premium amounts paid for a minimum of 4 years but less than 5 years = 90 percentile of Maturity Sum Assured
- Premium amounts paid for a minimum of 5 years = 100 percentile of Maturity Sum Assured
Here the Maturity Sum Assured would be re-evaluated under the policy norms to be the Sum Assured corresponding to the duration of premiums paid.
Any Time Maturity (ATM Plan)
The LIC Jeevan Saral Policy allows life insured to withdraw partial/full maturity after 10 years at any time, hence called LIC ATM Plan also. This flexibility lets you reinvest your money or fulfill your financial requirements. LIC ATM Plan rewards you with bonus even if you have stopped paying the premium after 10 years and maturity is kept inactive in insurance account.
Bonus (Loyalty Additions)
The Life Insurance Corporation provides Loyalty Additions to its policyholders as a share in its profits. The Loyalty Additions are with-profits plan that takes part in the company’s revenues. They are delivered in the form of terminal bonuses paid laterally with maturity benefit or death benefit. Hence, a Jeevan Saral policyholder can enjoy these additional bonuses during the policy duration and/or also on the maturity of the plan. Unlike Jeevan Anand in which bonus is declared every year, bonuses in Jeevan Saral it is delivered after 10-year successful policy duration depending on the company’s performance.
The Loyalty Bonus is entirely dependent on the company’s prospective profits and is therefore unfixed and unguaranteed.
Policy Eligibility for Jeevan Saral
| Age Limit | 12 to 60 years |
| Maturity Age | 70 Years-Maximum |
| The term of Policy | 10 to 35 Years |
| Minimum Premium | Rs. 250 /month for the age up to 49 and Rs. 400 /month for age 50 & above |
| Maximum Premium | No limit (Premium in multiple of Rs. 50 /month) |
Premium Payments
Life Assured can pay monthly / quarterly/half yearly /yearly premium through ECS or another mode in plan 165. A grace period of 15 days is allowed for half yearly/quarterly premiums / monthly premium payments and a grace period of one month (30 days) is allowed for policies paying a yearly premium.
LIC Jeevan Saral Example-
Let’s take an example where the whole Jeevan Saral Plan is explained using a chart that will provide you with an idea of what will be the final Maturity amount and the Death Claim if any sudden event happens. The following chart explains the Sum Assured on yearly bases for death Claim and maturity amount-
| Policy Year | Annual Premium Paid | Guaranteed Sum Assured | |
|---|---|---|---|
| On Death | On maturity or surrender | ||
| 1 | 5000 | 10650 | 0 |
| 2 | 10000 | 111395 | 0 |
| 3 | 15000 | 116497 | 8608 |
| 4 | 20000 | 121599 | 13757 |
| 5 | 25000 | 126701 | 19835 |
| 10 | 50000 | 152211 | 46089 |
| 15 | 75000 | 177722 | 79932 |
| 20 | 100000 | 203232 | 112802 |
| 25 | 125000 | 228742 | 143810 |
In this chart, an amount of Rs.5000/- is deposited every year for 25 years in this account. The final Death Claim amount is Rs. 228742/- and the Surrender or Maturity amount is Rs. 143810/- but in this policy, there will be another factor that is added and provided by the corporation as an added benefit and that is the Loyalty Bonus.
Since the Loyalty Bonus is provided every 10 years therefore, this policy is eligible for two times the Loyalty bonus as the tenure of the policy is of 25 years. The final amount after the addition of the Loyalty Bonus after the 35 Year is as follows-
| Claims | Amount without loyalty benefit | Loyalty Bonus-1 | Loyalty Bonus-2 | Total Amount |
|---|---|---|---|---|
| Maturity Benefit | 143810 | 43143 | 94195 | 281148 |
| Death Benefit | 228742 | 68433 | 149827 | 447002 |
