Note: this is a guest post from Manish P on LIC Jeevan Saral.
LIC Jeevan Saral is a cash value insurance plan. Usually Parani does not like these products but I beg to differ. If my father would have foreseen the future, and invest as little as Rs 1,000/- a month in any long term investment plan for past 25 years, our family would have had a surplus amount today to bear with the rising prices.
That does not mean that we have a difficulty, but it would have been much better. I have always wanted a long-term investment. It keeps you financially secure and offers the needed assistance when the time arrives.
As I was aware of the financial conditions and started managing my accounts from the engineering college days, I decided to invest in a long-term investment after securing employment.
After research, collection of data and taking the opinions of the experts, I choose the Jeevan Saral plan from the Life Insurance Corporation of India. The periodic investment plan from the LIC is a fabulous systematic investment that accumulates to a larger sum at maturity.
Additionally, the regular investment is also the logic behind the recurring deposits offered by banking institutions across the country. The policy is an endowment assurance, and you will be choosing the preferred amount as well as the payment method.
It indicates you have complete authority over the investment. In this case, you will never lose a penny but rather accumulate over the years if there is no premature withdrawal/termination.
- Product Summary
LIC is the finest investment institution available in the country. The long-term plan gives complete control to the purchaser and ensures that you have a command over the entire investment.
In addition, the Jeevan Saral plan further offers death benefits during its active status. However, if you withdraw the program in the mid-way (only possible after three years), you will not receive any benefit. You will get back the amount for the three years without any interest deducting surrender charges.
If you are willing to continue for the long term, you will receive additional benefits such as loyalty bonus. These features of Jeevan Saral are attractive for risk averse investor like me and make it the best plan today for people who are ready to choose a risk-free long-term investment.
The death benefit offered by Jeevan Saral plan is to the extent of 250 times the monthly premium amount. For example, if you wish to pay Rs. 1,000/- per month as a premium, the death benefits tunes up to Rs. 2,50,000/- for the entire period.
At the time of the death, your family receives the actual premium paid until the date and the death benefits amount. It is a win-win situation for you and your family. Minimum age at entry for Jeevan Saral is 18 years and maximum entry age is 50 years. Maximum age at maturity can be 60 years.
Min Sum Assured = Rs 1,00,000
Max Sum Assured = Rs 25,00,000
The life protection cover is proving beneficial for the plan, as you no longer have to choose an additional policy to cover for the death benefits.
The length of the Jeevan Saral policy is minimum ten years to 35 years maximum. However, it varies according to your age at the time of enrollment. The length of the period defines the total benefits that you will receive at the time of maturity from LIC Jeevan Saral.
The accumulated amount is huge and gives you the chance to reinvest or use wisely according to your family requirements. Moreover, the Jeevan Saral does not charge any penalty for closure of the plan after 5 years. read more int he benefits section.
The accidental death benefit is another addition to the cap. According to LIC, 95% of its total investors in the plan survive until the end. However, the accidental death benefit is a boon for regular travelers that often move on work.
The flexibility offered is high, and you can choose to surrender it at any time without penalty. That is something unusual, which is not the case with other policies from different providers.
Tips for buying life insurance policy
- Maturity sum assured
As a policyholder, you will enjoy the required liquidity through this plan. LIC Jeevan Saral offers the benefit of tax exemption and liquidity. For example, after five long years of the active premium payment, without any defaults and corresponds to the required term under the policy, you may receive 100% Maturity Sum Assured (MSA).
The LIC provides the MSA values at the beginning of the policy. It is giving the opportunity to remove full or partial MSA during this period. For illustration, if you are in need of funds during that period, you can just choose to withdraw the required fund from the MSA.
Through this way, you will meet your financial emergency and secure the future without additional loans. The full MSA is available after ten fruitful years of payment.
Useful post:Why you must avail multiple term insurance policy
- Profits
The benefits associated with the plan are incredible. Apart from offering the assured sum, LIC further adds loyalty bonus in Jeevan Saral plan. It is only applicable if you keep the policy active until its end or for minimum ten years.
For example, if your plan is for 15 years, you have to continue it for at least ten years to receive a loyalty bonus. You can surrender the policy after the 10th year.
It will not affect the loyalty bonus. The loyalty addition depends on the profits made by LIC. As the profits are variable, it will be difficult to state the exact figure at the beginning of the policy. However, past returns were in between 4 and 7% when held more than 10 years.
In best case scenario, if you consider 7% as a return at the end of the plan, it will add up another lakh rupees, considering that the minimum monthly payment is Rs. 1,000/-.
The best part of the entire program is its non-taxable factor. It means, you will not pay a single rupee as tax to the profits obtained through Jeevan Saral. That is entirely fascinating, as investing in recurring deposit still attracts tax on the interest earned.
- Benefits
Jeevan Saral has a good number of advantages over other policies in the market. The following are the advantages that you will receive by enrolling with the plan:
- The death benefit is 250 times the monthly premium in addition to the loyalty bonus, if any. LIC also returns the paid premiums, excluding the first year, to the nominee in a lump sum in Jeevan saral.
- The maturity amount along with the interest and loyalty bonus, if any, is payable at the end of the policy. You can also take a loan from LIC as a holder of LIC Jeevan Saral.
- Supplementary or additional benefits are applicable only when you choose to add new features into the policy. However, you will have to make the required premiums towards the added benefits.
- As the plan is a long-term investment, surrender value is applicable during early termination of the plan. The surrender value is usually greater than the actual guarantee surrender. However, it depends on the stage at which you are surrendering. The policy also enables you to abandon partially.
- If you find it difficult with the policy premium payment, you can do it after three years. Under such condition, LIC returns 30% of the premiums paid, excluding the first year of the payment if returned within 3 years. If you choose for additional benefits, you will have to exclude their premiums. So do not surrender the policy as much possible.
- The maturity sum assured differs according to the total number of years that you completed paying the premiums. For example, if you complete three years and surrender the policy, the MSA will be 80% of the premiums paid. It will be 90% in case of four years and less than five years. It will be 100% if it exceeds five years.
Conclusion
Jeevan Saral is a long-term investment plan offering an excellent opportunity to save a good amount of money for a committed person. Money is an essential tool to sustain in this world and a better way to manage it is through investment in risk free products.
The Jeevan Saral from LIC is surely an appealing product in the market offering benefits and assured sum for risk averse investors. The monthly endowment plan additionally offers death benefits and loyalty bonus.
Together, they add up lump sum, giving you good returns in the end. Surrender value and unique benefits are added attractions, and you can choose the required benefit to the policy. Enjoy maximum benefits by paying as little as Rs. 1,000 per month with LIC Jeevan Saral. Get yourself a cover that protects your money and helps it grow over a period.
Possible to get ur gmail or skype id?
Dear Prasha,
I had taken jeevan saral plan for 25 years at the time of its maturity my age will be 55 years can I extend the plan now only by another 5 years or later on attaining the age of 55 years so that I extend the same plan up to my attaintment of age of 60 years.
Regards,
Girish Sharma
I invested Rs 24020/- for 3 years till Dec 2016.Recently I have taken a term plan also for 50lakhs from LIC. I am investing in PPF also.I am very much confused whether to divert this premium amount towards ELSS fund or continue with the policy till 11 years or 25 years.My policy term is 25 years.The maturity sum assured is around Rs7.5 lakhs in policy bond.
Actually I was not so investment conscious about my investment portfolio at that time as i was not coming in any tax bracket.Now, I am in 20 % tax bracket.At that time I was not aware of Term plan and also was not comfortable in investing any Private Companies.I used to deposit in only PPF. At that time I felt I am short of Insurance and hence bought this policy without keeping any perspective in mind that I am taking this policy for Investment or Insurance.Now , when I am trying to take advise from others.Some are advising me to surrender and some say the policy is good you should continue for at least 10 years. I am 34 now and dont want to take any wrong step related to investment and insurance and ruin my later years. I request you to kindly advise whether to continue investing in this policy or discontinue.I really dont mind investing also if I am supposed to get better returns.As, today I feel I am adequately insured as far as Insurance is concerned in comparison to my annual package as I am having another Limited endowment policy of 2 lakhs also from LIC and also insured by my employer for approx 15-18 lakhs.I will be taking your advise as the final call for this policy as I dont wont to linger on with this policy as I have already invested 1.5 lakhs for my Income tax rebate by investing in PPF, PF , LIC(Limited endowment plan) and LIC e term( Cover of 50 lakhs). I have tried enquiring from lot of people related to its return part also. No one is able to give a clear picture in this regard also.
Hi, how can I calculate the new MSA if I want to surrender my policy? Couldn’t find any easily available charts without the 10% IRR assumption.
LIC and its agents are a cheats for sure, I have completed 5years, the suppose to get 5 paid premiums amount as surrender value, what i came to know from the LIC is they are deducting one premium.
fooling and cheating public.
Hello Parsha,
What do you think is the right time to surrender Jeevan Saral, to get atleast the paid premium.
I purchased 2 Jeevan Saral policy for 25 years one on 8 Dec 2005 and second on 13 July 2011
Is it advisable to surrender the Jeevan Saral policy worth 5 lacs after 7 years as I have taken a term insurance of 50 lacs recently…it’s not a policy with guaranteed addition like Jivan Shree…any deductions after 5 years or I will get back the amount I invested without any deductions n benefits ?Please guide ,Sir…
Hi Subodh
Yes better to surrender. You’ll get surrender value as calculation mentioned in the post. You should not have invested in the plan in first place. But anyway better late than never…
Why Maturity Sum Assured is less compared to Sum Assured? Appreciate if you can give MSA calculations?
Thanks.
In Jeevan Saral plan.
Hi Cocviv
You can google for “Jeevan Saral MSA chart” calculation and look at Images tab. Its available in plenty on web and thats why I dint publish it.
Dear Sir
Pl advise what do you mean by “policy paid up”, instead of surrender ? I have stopped paying premium after 3 consecutive years, coz agent vanished and there was no service. I did not want him to earn commission w/o giving service, hence stopped the policy. It is more than 9 years, I haven’t paid premium.
Now, to get max benefit out of it, should I keep the policy for plan term or surrender it ?
Hi Dhiren
I would advise surrendering it and investing proceeds half in balanced funds and half in liquid funds.
sir i have taken this police in 2011 with 4800+100(accident benfit)=4900/- monthly premium at age of 24.
its goin to b to 5 yrs and wish to withdraw the money. Can u pls tell me the amout which i can get now.?
Hi,
My name is Anand. I have taken jeevan saral for 35 years. My age is now 31. If i continue the policy for 3 years and discontinue without surrendering, can i get a bonus or maturity after 10 years.
my monthly premium is 10000 i started policy in 2012 , after 10 year how much sum i will get ?
Hi Mahmad
My suggestion is to Allow the policy to become paid up. Not good policy for returns nor insurance. The calculation procedure for MSA is already mentioned in the post.
i pay yearly jivan saral primium 30025 after 20 years M A
Hi,
I have taken Jeevan saral with premium 36030 rs per year for 35 year. However, in my policy sum assured is comming as 7.5 lac only. Could you please confirm, in 35 years i wil pay about 12.6 lack…. then why sum assured mentioned is so less? or I am missing something here?
HI
Jeevan Saral has about 200 times monthly premium as SumAssured. It is a pretty bad policy if you’re looking for investment returns or Sum Assured. It does not fulfill anything meaningfully. The death benefit and survival benefits are separate calculations.
Sorry. typo. it is 250 times monthly premium (250x3000per month=Rs 7,50,000 approx Sum Assured).Don’t worry. 7.5 lakh is not the amount you’ll get if you survive for 35 years. Maturity Sum Assured is different from Sum Assured.
I started 10years in 2011 , 4048 as the montly premium what would be amount i would receive on maturity
Dear Sir, Please help in this reagrds. My mother after retirement she took this Jeevan Saral Policy at the age of 60 with monthly premium of 6027 on 5th April 2011 for 10 nyears. Its been close to 5 years. As my brother deceased she took this policy for her grand daughter (My brother child) marriage porpose. At the time of taking this policy agent has told her that she will get the maturity amount as 1075000 & on death assured amount as 875000 only. I was not aware about it. So recently I went to LIC office to see if I can get the loan on that policy. Now we came to know that it is not 1075000. Maturity amount is just 107500. When we asked the agent he said he did not checked it properly. He thaught it is 1075000. My mom trusted him so much & she dint even checked the policy properly. Can you please guide me how we can get our money back. I am not concerned about the intrest. We will be happy to get back the amount what we have paid till now (331485/-). PLEASE sir help me.
Venu Gopal Cirra
[email protected]
9849613211
Hi Venu
Yours is a classic case of how agents dupe investors or ignorant themselves. You should be aware to protect yourself.
Jeevan Saral you will know the maturity benefit based on your age/term at beginning itself. Also Sun Assured on Death and Sum Assured on Maturity are completely different. Considering your policy is 4 years , you’ll get 90% Maturity Sum Assured(MSA) + Loyalty benefit.
This is a very wrong policy for your mother’s age. It is not possible to get your full premium back. If you surrender, you’ll get as per LIC policy only.
Regards
Parani
You don’t seem to have proper knowledge your self. After 3 years they don’t gave full premium paid. Just 30% that too deducting the 1st year premium full. Also after 10 years the rate of interest given is just 3-4% not 7-10% . I think you are just another customer fooled by LIC agents.
You don’t seem to have read the blog and the analysis properly. It exactly says that 30% of the paid premium after deduction of first years premium would be payable if surrendered after 3 years.
As for rate of interest, it clearly mentions that it is variable and the assumption is made on the history of rate of interest paid. Mathematical equations for future are based on reasonable and fair assumptions. Nowhere it is mentioned that it is guaranteed rate of interest.
The blog indeed is informative and correct in its assessment. Don’t be a critic just for the sake of it.
Looks like you have been duped or taken for a ride by LIC agents in the past.
Dear Sir, I have started Seevan saral in 2010 with premium 36080,I have 2.52 lacs but when i am asking surrender value its 2.07 lacs only
What sjould i do? agent tell that i will get bonus if i continue 10 years
Dear Sir, I have started Seevan saral in 2010 with premium 36080,I have 2.52 lacs but when i am asking surrender value its 2.07 lacs only
What should i do? agent tell that i will get bonus if i continue 10 years