For people looking for a long-term financial plan that combines life insurance with savings, LIC Jeevan Umang is one option that offers both protection and survival benefits. Under the policy, eligible policyholders can receive an annual survival benefit after completing the premium-paying period, subject to the terms and conditions of the plan.
For example, a policy with a Basic Sum Assured of Rs 10 lakh can provide an annual survival benefit of Rs 80,000, as the benefit is calculated at 8% of the Basic Sum Assured.
LIC, or Life Insurance Corporation of India, is government-owned. Jeevan Umang is designed as a whole-life insurance plan that provides coverage up to the age of 100, subject to the applicable policy conditions.
How LIC Jeevan Umang Works
LIC Jeevan Umang allows policyholders to choose a premium-paying period of 15, 20, 25 or 30 years. The minimum Basic Sum Assured under the plan starts at Rs 2 lakh.
The policy provides a survival benefit equivalent to 8% of the Basic Sum Assured at the end of each policy year after completion of the premium-paying term. These payments continue according to the policy terms while the policyholder survives.
If the policyholder dies before reaching the applicable age, the nominee receives the death benefit as a lump-sum payment. The nominee may also have the option to receive the amount in instalments, subject to the policy conditions.
What Happens After Premium Payments End?
Suppose a policyholder selects a 15-year premium-paying term and completes all the required premium payments. After the premium-paying period ends, the policy continues to provide the applicable survival benefit.
The annual payment is calculated at 8% of the Basic Sum Assured. For a Basic Sum Assured of Rs 10 lakh, this works out to Rs 80,000 per year. The benefit continues as specified under the policy as long as the policyholder survives and the policy remains eligible for the benefit.
This means the premium-paying period and the period during which survival benefits are received can be different.
Key Features of LIC Jeevan Umang
LIC Jeevan Umang is a whole-life insurance plan with a choice of 15, 20, 25 or 30 years for premium payments. The survival benefit is 8% per year of the Basic Sum Assured.
For instance, a Rs 10 lakh Basic Sum Assured can provide an annual survival benefit of Rs 80,000. The plan offers life cover up to age 100, subject to the applicable policy terms.
The maturity benefit consists of the Basic Sum Assured along with applicable bonuses. Bonuses are declared by LIC and are subject to the conditions applicable to the policy.
A key feature of the plan is that annual survival benefits begin after completion of the selected premium-paying term.
LIC Jeevan Umang vs Fixed Deposit
LIC Jeevan Umang and a fixed deposit serve different financial purposes, so they should not be compared only on the basis of returns or interest rates.
A fixed deposit primarily involves depositing money with a financial institution to earn returns. Jeevan Umang, on the other hand, is fundamentally a life insurance plan that combines life cover with savings, survival benefits and a maturity benefit.
Therefore, the two products have different structures and benefits. Anyone comparing them should consider the insurance protection, payment structure, survival benefits and maturity provisions rather than looking only at the rate of return.