LIC Kanyadan Policy alias LIC Jeevan Lakshya Policy
This is needless to say that for last year or so the LIC agents have been selling one endowment policy like hot cakes in the name of LIC Kanyadan Policy. This policy has been very popular among investors and for the agents as well. But quite unfortunately, I have to tell you that there is no such policy in the name of LIC Kanyadan Policy as you can check from the LIC’s website too.
The LIC agents are selling this policy in the name of LIC Kanyadan Policy but actually, this policy is originally named as LIC Jeevan Lakshya policy. This is indeed a gross misdeed from the part of the insurance agents. May be they have done so to make people aware and understand the features and benefits of this policy. This policy can take care of the daughter’s education and marriage in the event of the unprecedented demise of the policyholder. It has the ability to fulfill a father’s dream in terms of her daughter’s education and marriage.
Though this policy is famous among the agents as LIC Kanyadan Policy, its original name LIC Jeevan Lakshya policy indicates that with this policy an investor can fulfill his dreams or the lakshya of his life. That means it really helps an individual to live worry free as after taking this policy his daughter’s education and marriage are secured enough.
Since in the current scenario, everybody and every section of the society wants to make upliftment of the girl child in India, so today I have decided to write this blog post on LIC Kanyadan Policy alias LIC Jeevan Lakshya and should you buy this policy?
What are the key features of LIC Kanyadan Policy?
LIC Kanyadan Policy alias LIC Jeevan Lakshya policy table no 833 is a combination of insurance with savings options. It provides basic risk coverage of sum assured during policy term and the revisionary bonus and Final Additional Bonus at maturity helps in securing the financial needs of the children and the family.
Being an Endowment plan this policy offers both insurance and savings. This means this is a life insurance product that provides for life risk coverage and also helps in savings regularly over a specific period of time up to 3 years before the maturity. At maturity, the policyholder receives a lump sum amount to meet his specific financial needs such as the cost of education and marriage of daughters.
Key features of LIC Kanyadan Policy cum LIC Jeevan Lakshya plan no 833
- This policy is under plan no 833 and having unique identification no -UIN: 512N297V01;
- This policy is a participating one. Means the policy is eligible for a share of profit of the corporation;
- This policy is an endowment plan which provides insurance and savings;
- Minimum entry age 18 years;
- Maximum entry age 50 years;
- Policy term is minimum 13 Years and maximum 25 Years;
- Minimum sum assured is ₹1,00,000 and no maximum limit;
- Premium has to be paid maximum for 22 years(for 25 years policy) i.e. 3 years before maturity;
- Premium has to be paid minimum for 12 years(for 15 years policy)i.e. 3 years before maturity;
- No premium is to be paid if the insured dies during the policy paying term;
- There is a 2% rebate if the premium is paid annually at a time;
- It offers two optional rider benefits under this policy;
- This policy provides 10% of the sum assured every year until one year before the maturity if the insured person dies during the policy term. At maturity again sum assured plus revisionary bonus plus final additional bonus is given to the nominee.
- A loan can be availed against this policy within the surrender value, provided the policy has completed 3 years and policy is in force;
- If an insured commits suicide within 12 months from the policy revival, LIC would pay 80% of the premiums paid excluding taxes or surrender value higher of the two.
What is the eligibility criterion for taking LIC Kanyadan Policy?
- Policy Term: Minimum 13 Years and Maximum 25 Years;
- Age profile: Minimum 18 Years and Maximum 50 Years;
- Sum Assured: Minimum S.A is ₹1,00,000/-. Thereafter, multiple of ₹10,000. No Max limit;
- Premium Payment Term: 3 Years before maturity. No premium to be paid in case of death during the policy term.
- No prior medical test is needed for taking this policy
What are the key benefits of LIC Kanyadan Policy?
The following financial benefits are discussed here.
- Maturity Benefit: In the event of policyholder survives the stipulated date of Maturity provided the policy is in full force by paying up to date premiums, Sum Assured on Maturity along with vested Simple Reversionary Bonuses and Final Additional Bonus, if any, shall be payable. Where Sum Assured on Maturity is equal to Basic Sum Assured.
- Death Benefit: On the death of the policyholder before the stipulated date of maturity provided the policy is in full force by paying up to date premiums. Death Benefit is defined as the sum of Sum Assured on Death, vested Simple Reversionary Bonuses and Final Additional Bonus(FAB), if any, shall be payable on maturity. This means the Jeevan Lakshya plan provides 10% of Sum Assured till the year of maturity and again after completion policy term, 110% of Sum Assured + Bonus + Final Addition Bonus is also paid to the nominee of the deceased.
- Rider Benefits: Accidental death and disability benefit rider are available on payment of additional premium. Under an in force policy, the Accidental death and disability benefit rider can be opted for at any time within the Premium Paying Term of the Basic Plan provided the outstanding Premium Paying Term of the Basic Plan is at least 5 years. Wherever this rider has been opted for under the policy, all the benefits covered under this Rider will be available during the policy term provided the Policy is in force for the full Sum Assured as on the date of accident.
What is the premium under LIC Kanyadan Policy?
Below is the premium chart as given by LIC for minimum Sum Assured of ₹1,00,000 only without any premium for rider benefit such as accidental death. The premium amount shown below is for the basic plan and the amount shown below is excluding GST@4.50%. From 2nd year onwards GST will be @2.25% of the basic premium amount.
|LIC Kanyadan Policy chart|
|Policy Terms||13 Years||15 Years||20 Years||25 Years|
Let’s take an example for easy understanding:
Mr. Vivekananda Dutta, aged 30 years has taken a Kanyadan Policy for 15 years tenure. The Sum Assured of this policy is ₹5 Lakh only. He will have to pay a premium of ₹8173/- plus GST@4.50% annually.
Maturity year will be 2033. and his age will be 44 years
What will be maturity proceeds if he survives the entire policy term?
Maturity year will be 2033 and his age will be 44 years. If Mr. Vivekananda Dutta survives till maturity after 15 years, he will receive ₹8,17,500 at maturity.
What will be the maturity proceeds if he dies after 10 years of policy continuation?
From 2029 to 2032 his family will receive ₹50,000 every year i.e. 10% of Sum Assured. On maturity, in 2033 his family will receive ₹5 Lakh as the Sum Assured and Revisionary bonus and Final Additional Bonus altogether. Thus total maturity proceeds will be ₹8,67,500.
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What is the exclusion of this policy?
This is a very crucial point to know that if an insured person commits suicide within 12 months from the date of the commencement of the policy, no risk coverage would be provided in that case.
Is there any Free Look Period under LIC Kanyadan Policy?
This policy allows a period of 15 days from the date of receipt of the policy document to review the terms or conditions of this policy and where the policyholder disagrees to any of those terms and conditions, he has the option to return this policy.
Is there any Grace Period under LIC Kanyadan Policy?
Under this policy, the insurer allows a grace period of time from the due date for the payment of premium, without any penalty/ late fee, during which time the policy is considered to be in force with the risk cover without any interruption as per the terms of the policy.
A grace period of one month but not less than 30 days shall be allowed for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums. If the premium is not paid before the expiry of the days of grace, the Policy lapses without any further questions.
Is there any surrender value under LIC Kanyadan Policy?
The policy can be surrendered at any time during the policy term provided at least 3 full years’ premiums have been paid. The Guaranteed Surrender Value shall be the sum of the following :
(a). Percentage of total premiums paid (net of GST) excluding any extra premiums and premiums for the rider(s), if opted for. This percentage will depend on the policy term and policy year in which the policy is surrendered.
(b).The surrender value of vested simple reversionary bonuses, if any, which is equal to vested bonuses multiplied by the surrender value factors applicable to vested bonuses. These surrender value factors, which are guaranteed, will depend on the policy term and the policy year in which the policy is surrendered.
Just go through the below chart for getting Guaranteed surrender value against the premiums paid.
Also, see the below chart for getting vested bonus calculation.
Final words on LIC Kanyadan Policy
This policy is purely an endowment plan that provides risk coverage along with savings options till policy payment term. However, it is always better to see insurance as purely an insurance product. Insurance never should be compared with the investment product. If an investor does not have trust in equity or equity-related products, this policy is suitable for him.
This policy is an ideal investment cum insurance product for low-risk appetite investors. But there are a plethora of pure plain vanilla term insurance products which meets one’s insurance needs with low cost and high sum assured options.
Thus, finally, I can say that LIC Kanyadan Policy alias LIC Jeevan Lakshya plan is ideal insurance and savings product for the conservative investors only.