LIC Jeevan Umang Scheme

LIC Jeevan Umang: A Comprehensive Guide

LIC Jeevan Umang stands out in the realm of life insurance products, offering a unique blend of protection and income.

This non-linked, participating, individual, whole life assurance plan is designed to provide comprehensive financial security throughout one’s life.

It has attracted significant attention due to its long-term benefits and structured benefits. This guide will delve into the intricacies of LIC Jeevan Umang, exploring its key features, benefits, eligibility criteria, working mechanism, and more to provide a thorough understanding of this policy.

Understanding LIC Jeevan Umang

LIC Jeevan Umang is designed to provide both insurance coverage and a regular income. It offers:

• Life-long Coverage: The policy provides insurance coverage up to the age of 100, ensuring that policyholders and their families are financially protected against unexpected events.
• Regular Income: Once the premium payment term ends, policyholders start receiving annual survival benefits, ensuring a steady income stream during their later years.

Key Features of LIC Jeevan Umang

Non-Linked Plan

LIC Jeevan Umang is not linked to the performance of market investments, which means its returns are not affected by market volatility. This feature provides stability and predictability in returns, making it a reliable choice for risk-averse individuals.

Participating Plan

As a participating plan, LIC Jeevan Umang allows policyholders to benefit from the company’s profits. This participation entitles policyholders to bonuses that can enhance the overall returns from the policy.

Life-Long Coverage

The policy provides life coverage up to the age of 100, ensuring that the policyholder’s family is financially secure even in old age.

Regular Income

Post the completion of the premium payment term, policyholders are entitled to annual survival benefits. This feature ensures a regular source of income, which can be crucial for managing expenses in retirement.

Tax Benefits

The premiums paid towards LIC Jeevan Umang are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the death or maturity benefits received are tax-free under Section 10(10D), providing significant tax advantages.

Loan Facility

Policyholders can avail of loans against their LIC Jeevan Umang policy after a certain period. This facility can be beneficial in times of financial emergencies, offering liquidity without the need to surrender the policy.

Grace Period

A grace period is provided for premium payments, allowing policyholders to make payments without losing coverage if they miss the due date. This feature adds a layer of flexibility and ensures continuous coverage.

Benefits of LIC Jeevan Umang

Financial Security

The policy provides life-long coverage, ensuring that the policyholder’s family is financially protected in case of their untimely demise. This benefit offers peace of mind and financial stability to the insured’s dependents.

Regular Income

After the premium payment term, policyholders receive annual survival benefits, which provide a steady income. This can be particularly helpful in managing expenses during retirement or meeting other financial goals.

Tax Benefits

The policy offers tax benefits both on premiums paid and the benefits received, making it an effective tool for tax planning and savings.

Loan Facility

In times of financial need, policyholders can avail themselves of loans against their LIC Jeevan Umang policy. This feature provides liquidity and financial flexibility without the need to liquidate the policy.

Flexibility

Policyholders can choose from various premium payment options, allowing them to tailor the policy to their budget and financial goals.

Eligibility Criteria

To be eligible for LIC Jeevan Umang, certain criteria must be met:

Minimum Entry Age

The minimum entry age for LIC Jeevan Umang depends on the policy term. Typically, the minimum age ranges from 90 days to 12 years, allowing for flexibility based on the policyholder’s age and chosen term.

Maximum Entry Age

The maximum entry age for LIC Jeevan Umang is usually 55 years. This ensures that the policy can cover individuals from a young age up to their retirement.

Sum Assured

The minimum sum assured varies depending on the policy term and the policyholder’s age. The sum assured is a critical component as it determines the benefit amount payable to the nominee in case of the policyholder’s death.

How LIC Jeevan Umang Works

Premium Payment

Policyholders are required to pay regular premiums for a specified term. The premium amount is determined based on various factors, including age, sum assured, and policy term.

Risk Cover

LIC Jeevan Umang provides life-long coverage, ensuring that the policyholder’s family is financially protected in the event of their death. This feature offers peace of mind and financial security.

Survival Benefits

After the completion of the premium payment term, policyholders start receiving annual survival benefits. These benefits provide a steady income stream, helping to manage financial needs in later years.

Maturity Benefit

If the policyholder survives until the age of 100, a maturity benefit is paid. This benefit includes the sum assured along with any bonuses, providing a significant financial payout.

Death Benefit

In the event of the policyholder’s death, a death benefit is paid to the nominee. This benefit includes the sum assured along with any bonuses accrued, ensuring that the policyholder’s family receives financial support.

Factors Affecting Premiums

Several factors influence the premium amount for LIC Jeevan Umang:

Age of the Policyholder

The age of the policyholder at the time of policy issuance affects the premium amount. Generally, younger policyholders pay lower premiums compared to older individuals.

Sum Assured

The chosen sum assured directly impacts the premium amount. A higher sum assured results in a higher premium, as the insurance cover and benefits are greater.

Policy Term

The policy term, or the duration for which premiums are paid, also affects the premium amount. Longer policy terms may have different premium structures compared to shorter ones.

Mode of Premium Payment

The mode of premium payment, whether annual, semi-annual, quarterly, or monthly, can impact the premium amount. Some modes may come with additional charges or discounts.

Additional Riders

Opting for additional riders such as accidental death benefits or critical illness coverage can increase the premium amount. These riders enhance the policy’s coverage but come with an additional cost.

Riders Available with LIC Jeevan Umang

To enhance the policy’s coverage, LIC Jeevan Umang offers several riders:

Accidental Death and Disability Benefit Rider

This rider provides an additional benefit in case of death or disability due to an accident. It enhances the overall coverage and ensures additional financial protection.

Critical Illness Rider

The critical illness rider provides a lump sum benefit if the policyholder is diagnosed with a critical illness covered under the rider. This rider offers financial support during health crises.

Term Assurance Rider

The term assurance rider adds an extra layer of protection by providing a higher sum assured in case of death during the policy term. This rider is useful for individuals seeking enhanced coverage.

Advantages of LIC Jeevan Umang

LIC Jeevan Umang offers several advantages, including:

Long-Term Financial Security

The policy provides life-long coverage and regular income, ensuring long-term financial security for the policyholder and their family.

Regular Income After Retirement

The annual survival benefits offer a steady income post-retirement, helping to manage expenses and maintain financial stability.

Tax Benefits

LIC Jeevan Umang provides tax benefits on premiums paid and benefits received, making it an effective tool for tax planning.

Life-Long Coverage

The policy ensures coverage up to the age of 100, providing financial protection throughout the policyholder’s life.

Flexibility in Premium Payment Options

Policyholders have the flexibility to choose from various premium payment options, allowing them to tailor the policy to their financial situation.

Disadvantages of LIC Jeevan Umang

Despite its benefits, LIC Jeevan Umang has some drawbacks:

Lower Returns Compared to Market-Linked Investments

The returns from LIC Jeevan Umang are generally lower compared to market-linked investments, such as equity-linked savings schemes (ELSS) or unit-linked insurance plans (ULIPs).

Long Lock-In Period

The policy has a long lock-in period, which may be a disadvantage for individuals seeking more liquidity or shorter investment horizons.

High Premiums for Higher Sum Assured

Higher sum assured amounts result in higher premiums, which may be a concern for individuals with limited budgets.

LIC Jeevan Umang vs. Other Investment Options

Before choosing LIC Jeevan Umang, it’s essential to compare it with other investment options:

Equity-Linked Savings Schemes (ELSS)

ELSS offers higher returns compared to LIC Jeevan Umang but involves market risk. These schemes are suitable for individuals with a higher risk appetite and longer investment horizons.

Unit-Linked Insurance Plans (ULIPs)

ULIPs combine insurance and investment but come with higher charges compared to LIC Jeevan Umang. They offer market-linked returns and are suitable for individuals seeking both insurance and investment benefits.

Traditional Endowment Plans

Traditional endowment plans are similar to LIC Jeevan Umang but may offer lower returns. They provide a combination of insurance and savings but may lack some of the features offered by Jeevan Umang.

Final Remarks

LIC Jeevan Umang is an excellent choice for individuals seeking long-term financial security and a regular income stream after retirement. Its features, such as life-long coverage, regular income, and tax benefits, make it a comprehensive financial product.

However, it’s essential to carefully consider your financial goals, risk appetite, and investment horizon before making a decision. Consulting with a financial advisor can provide valuable insights and help you make an informed choice.

Disclaimer: This article is intended for informational purposes only and should not be construed as financial advice. It is crucial to consult with a qualified financial advisor before making any investment decisions.