Year 2014 saw lot of changes in the Indian Insurance industry. IRDA (Insurance Regulatory & Development Authority) had implemented a slew of changes with respect to insurance regulations. These changes were applicable to both traditional (endowment/moneyback) and Unit Linked life insurance plans.
Some of the changes were related to minimum death benefits, guaranteed surrender value, use of new mortality table (for fixing premiums) etc., All Insurance companies had to abide to these new regulations with effective from 01-Jan-2014.
LIC (Life Insurance Corporation of India) had hence withdrawn all its popular plans by the end of 2013 and had to launch all new traditional plans throughout 2014. I tried to compile “LIC 2014 new plans list” in this article. I have provided the basic features of all new LIC policies that were launched in 2014. I have also given my recommendation on all these plans.
LIC had launched 14 new plans in 2014-2015. Five LIC Endowment plans, Four LIC Moneyback plans, Four LIC Term Insurance Plans and One Pension oriented plan.
( Endowment plan is a combination of insurance and investment. The insured will get a lump sum along with bonuses (if any) on policy maturity or on death event.
Money-back policies provides life coverage during the term of the policy and the maturity benefits are paid in installments by way of survival benefits.
In Term Plan which is a pure insurance there is no maturity benefit. It means if a person dies during the term of policy then only his beneficiaries will get some money otherwise at maturity, at the end of the term there is no benefit)
Below is the list of latest LIC policies that were launched during 2014 to 2015 :
- LIC Single Premium Endowment Policy (Plan/Table no 817) : This plan was launched on 1st January,2014. It is an endowment policy. The main feature of this policy is that you pay single premium and the risk coverage is available through out the policy term. Maturity Benefit under this policy is the addition of Sum Assured, Simple reversionary bonus and Final Additional bonus. The expected returns from Single premium endowment policy can be in the range of 4% to 6%. My view is that you can ignore buying this policy. (Date of Commencement of risk under this plan:In case the age of Life Assured at entry is less than 8 years, risk under this plan will commence either 2 years from the date of commencement or from the policy anniversary coinciding with or immediately following the attainment of 8 years of age, whichever is earlier. For those aged 8 years or more, risk will commence immediately)
- LIC New Endowment Policy (Plan/Table no 814) : This plan was launched on 3rd January, 2014. It is also an endowment policy but not a single premium plan. This plan has accidental death and disability benefit as an optional rider. The returns from this new endowment policy too can be in the range of 4% to 6%.
- LIC New Money Back Plan (Plan/Table no 820) : This plan was launched on 6th January, 2014. The main feature of this plan is limited premium paying term. The policy term is 20 years and the premium paying term (PPT) is 15 years. You can get Survival Benefits of 20% of Sum Assured (as money back amounts) at the end of 5th, 10th and 15th policy year. The expected returns can be around 5% to 6%.
- LIC New Money Back Plan (Plan/Table no 821) : This is a similar money back plan like the above one. The policy term is 25 years in this plan and PPT is 20 years. Maturity benefit under plan no 821 is the addition of 40 % of sum assured plus Bonuses and Final Additional bonus (FAB, if any).
- LIC New Bima Bachat (Plan/Table no 816) : New Bima Bachat plan was launched on 7th January, 2014. This is a money back plan. This plan offers 3 policy terms (9/12/15 years). It is a single premium payment plan. The expected returns can be in the range of 4% to 6% from New Bima Bachat plan.
- LIC New Jeevan Anand (Plan/Table no 815) : New Jeevan Anand plan was launched on 8th January,2014. This is an endowment cum whole-life plan. This is a modified plan of old Jeevan Anand plan, one of the popular plans of LIC. Death Benefit under New Jeevan Anand is ‘higher of 125% of Sum Assured )or) 10 times of annual premium paid. In addition to this, death benefit also includes ‘Accrued simple bonuses.’ This death benefit is payable if unfortunate event happens during the policy term. If death happens after the policy term (whole life), death benefit includes Basic Sum Assured along with vested simple reversionary bonus and FAB. This is one of the better plans of LIC. But I still suggest you not to mix insurance with investment.
- LIC Anmol Jeevan II (Plan/Table no 822) : This is an offline Term insurance plan from LIC. The maximum sum assured offered under Anmol Jeevan II is Rs 24 Lakh.
- LIC Amulya Jeevan II (Plan/Table no 823) : This is an offline Term insurance plan with higher minimum sum assured of Rs 25 Lakh. No optional riders are available under Amulya Jeevan. Before buying Anmol Jeevan or Amulya Jeevan, you can compare the premiums of other offline term insurance plans offered by other insurance providers.
- LIC e-Term Plan (Plan/Table no 825) : LIC has launched its online Term insurance plan on 17th May, 2014. LIC was a late entrant with respect to the launch of online term plans. But one good point about e-term plan is that is about 35% cheaper than Anmol Jeevan/Amulya Jeevan (LIC’s offline term plans). However, when you compare the premiums of LIC’s e-term plan with private insurance players’ online products, you may find it bit costly. But, LIC has the highest claim settlement ratio among the life insurers. You can surely consider buying LIC e-Term plan.
- LIC Jeevan Rakshak (Plan/Table no 827) : Jeevan Rakshak plan was launched by LIC on 19th August, 2014. This is a traditional endowment policy. ( You may visit my article on ” Detailed analysis on LIC Jeevan Rakshak.”)
- LIC Varishtha Pension Bima Yojana (Plan/Table no 828) : VPBY is launched by the Government of India. LIC is an exclusive administrator of this Varishtha pension plan. ( You may visit my post on “VPBY-review” for more details)
- LIC & Pradhan Mantri Jan Dhan Bima Yojana : Government launched this financial inclusion programme on 28th August, 2014 to encourage people to open bank accounts. PMJDY Scheme offers Rs 30,000 as free term insurance coverage for the first time bank account holders. LIC will provide the life cover under PMJDY scheme from 26th January,2015. Life cover is available for the Jan Dhan Bank Account holders who have opened accounts between Aug 2014 to 26th Jan, 2015 only. ( For more information you may visit my post on “PMJDY & Life insurance coverage details“)
- LIC Jeevan Shagun (Plan/Table no 826) : Jeevan Shagun is a money back plan. This plan was open for sale for limited duration only. Jeevan Shagun is a single premium plan. The expected returns on this plan can be around 7% to 8.5%. (Visit my post for detailed analysis on “LIC Jeevan Shagun – Review & Return Calculation“)
- LIC Limited Premium Endowment Plan (Plan/Table no 830) : This is a limited premium payment plan. You pay premium for limited period and can get insurance coverage for the entire policy term. The available policy terms under this plan are 12/16/21 years. Premium paying Terms options are 8/9 years. ( You may like visiting my post on “LIC Plan no 830 – Features & Review“) ( or you can visit another article on this plan “ LIC Limited Premium Endowment plan offers Limited Returns“)
LIC 2014 new Plans list – Snapshot
I have listed down the basic features of LIC of India’s new plans that were launched in 2014 along with my recommendations (whether to ignore a plan or to buy). (Click on the images to enlarge or open in a new browser window).
LIC Plans 1 to 5..
LIC Plans 6 to 10..
LIC Plans 10 to 14..
( To know and understand more about various types of bonuses, you may visit my post on LIC’s latest Bonus rates 2014-2015)
Be careful while buying Single premium plans. Generally the maturity benefits (like money-back payments, policy maturity amounts) of Life insurance plans are tax free. You are entitled for a tax free maturity/death benefit under Section 10 (10D) only if the minimum sum assured throughout the policy term remains 10 times the single premium paid. The tax benefit under Section 80 C is available only if the annual premium is at least 10% of the sum assured. Regular premium plans may pass this criteria but some single premium plans may not meet this criteria.
You may or may not have bought any of these LIC plans. If you want to invest in any of them, you can analyze my reviews and consider taking decisions accordingly.
In case you have already invested/bought any of these LIC plans and are not happy with your investment decision then you can either SURRENDER your policy or can make them (it) PAID-UP. My suggestion would be to make these unwanted endowment or money-back plans LAPSE, as these plans were launched during the last one year only. You may buy a Term plan from LIC itself and invest the saved premium in other investment options (like mutual funds, bank fixed deposits etc., depending on your financial goals).
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( Image courtesy of David Castillo Dominici & bplanet at FreeDigitalPhotos.net)
You may visit my post on “how to get rid off bad or unwanted insurance” to know more about PAID-UP and SURRENDER options. You may also visit my post on “Comparison of online Term Insurance Plans” to know more about the best online term insurance plans.