LIC Jeevan Rakshak (New Plan) – Review & Returns Calculation

LIC Jeevan Rakshak (New Plan)

LIC’s Jeevan Rakshak (Plan No.827) is a new Endowment Assurance Plan. This is a non-linked and with profits policy. Life Insurance Corporation (LIC) will be launching this plan on 19th August,2014.

Key features of LIC Jeevan Rakshak Plan:

  • Sum Assured (SA) : The Minimum SA is  Rs 75,000  and the  Maximum allowed is Rs 2 Lakh
  • Policy Tenure : Minimum 10 years and maximum allowed is 20 years
  • Age entry (Life Assured’s) : Minimum is 8 years and maximum is  55 years.
  • Maximum maturity age – 75 years
  • Death benefit before 5 years of policy existence –Basic Sum Assured (BSA)
  • Death Benefit anytime after the 5th year – Higher of BSA or 10 times of annualized premium or 105 % of all premium paid as on date of death plus Loyalty Addition (LA) (if any)
  • Maturity Benefit – Basic Sum Assured (BSA) plus Loyalty Addition
  • Loan – Loan can be taken on the policy after 3 premium payment years
  • In case of surrendering the policy then no Loyalty Addition is payable
  • LA is applicable only after 5 years

LIC Jeevan Rakshak Premium quotes:

LIC Jeevan rakshak premiums

LIC Jeevan Rakshak Premium quotation chart for SA of Rs 2 Lakh : (click on the below image to enlarge)LIC_Jeevan_Rakshak_Premium

How does LIC Jeevan Rakshak Policy work?                          

Let us understand how a 20 year LIC Jeevan Rakshak policy works.

LIC Jeevan Rakshak


How to calculate returns of LIC Jeevan Rakshak Policy ? (Endowment Policy Calculator)

Let us now calculate the returns of the 20 year Jeevan Rakshak plan. I have used IRR (Internal Rate of Return) function of MS Excel. (Incase if you are unable to view the below calculator then kindly refresh your browser)

Life insurance premium quote – Jeevan Rakshak (Vs) LIC’s Online Term Insurance :

In the above example, we have seen that the policy holder (30 years old) has to pay a premium of Rs 7,058 for a Sum Assured of Rs 2 Lakh. The expected return from this policy is around 6%. For a premium of Rs7,500 (Rs 625 pm) the policyholder can get Rs 75 Lakh coverage through LIC’s e-Term plan (online Term insurance plan).

LIC Eterm plan online term insurance

Kindly note these important points before opting for Jeevan Rakshak:

  • The average return on endowment policies will be around 4% to 6%. You may find better investment avenues in the financial markets. In the above calculation the returns are around 6%.
  • As you can analyze from the above example, the rate of return largely depends on the amount of Loyalty Addition paid.
  • Kindly remember that no Loyalty Addition is paid if the policy is surrendered. And it is applicable only after 5 years of policy existence.
  • Section 80 C limit has been increased to Rs1.5 Lakh. Now there is every chance that you may be convinced or lured to buy this policy to save taxes. Tax benefits on Life insurance may reduce the cost of insurance. But, it should not be THE deciding factor.
  • The maximum Sum Assured offered in this plan is just Rs2 Lakh. This amount is payable on death or maturity. So, the value of Rs 2 Lakh is very less (say after 20 years).
  • If you can afford to take risk (depending on your age & financial goals) then it may be a wise decision to avoid these kind of endowment policies. The returns on these policies are below the average rate of inflation.So, they do not create wealth for you.

Before buying life insurance policy try to evaluate if the sum assured is sufficient to cover your life? Is the premium affordable? Can the family members lead the same standard of living in case of any unfortunate event?

(You may like visiting my post on “How to get rid off bad insurance?”)

“You don’t buy life insurance because you are going to die, but because those you love are going to live.” Life insurance is a must. Choose the right policy and cover. Share your thoughts and comments.

About The Author

  • sunny says:

    jeevan rashak 827 what is the loyalty addition. sum assured 200000 term 15 years

  • Yogesh says:

    Dear Sir, hope you are doing well

    I’m a avid reader of you website and seeing your enthusiasm and passion to reply each queries on the posts so honesty and in a simplistic way, It gave me the courage to ask the question.

    I’m very new to this and slowly learning about investment and taxes. I have never done this before but I’m really glad there are people like you who are doing this great job of helping people make the wise decision about there hard-earned money.

    So my father is in serious dilemma right now, whether to go on with following polices or Stop it and invest in better option.

    As I mentioned before, due to limited knowledge back then, the agent got him involve in other policies without explaining its pros and cons. I want to seek your advice on it, so to make a wise decision and how can we optimize the money.

    1. Jeevan Anand ( 815) – taken on 13/03/2014 Sum assured – 3,00,000 End – 13/03/2029 (father)
    2. Jeevan Anand ( 815) – taken on 13/03/2014 Sum assured – 2,00,000 End – 13/03/2029 (mother)

    3. Jeevan Rakshak (827) – taken on 08/03/2016 Sum assured – 2,00,000 End – 08/03/2026 (father)
    4. Jeevan Rakshak (827) – taken on 08/03/2016 Sum assured – 2,00,000 End – 08/03/2026 (mother)

    Looking forward to hearing from you


    • Sreekanth Reddy says:

      Dear Yogesh,
      Thank you for being my blog’s loyal reader!

      May I know, if your mother and father require Life insurance cover? Do they have dependents and financial obligations?

      • Yogesh says:

        I don’t think they necessary require a life insuance cover. But I’m also not clear and would like to know if a person need it or not.

        We are a family of four, me and my sister are currently studying in college.

        • Sreekanth Reddy says:

          Dear Yogesh,
          Are both of you dependent on your Parents? Do they have financial obligations?
          May I know your father’s age, is he employed or self-employed?

          Kindly read :
          * How much Term Life Insurance Cover do I need? | Online Insurance coverage Calculator

          • Yogesh says:

            Yes, we both are dependant on him.

            My father is a government employee. His age is 54.

          • Sreekanth Reddy says:

            Dear Yogesh,
            Ideally, he should have sufficient life insurance cover through a Term life insurance plan (assuming he does not have one).
            If he does not have any major health issues, can try taking a Term plan (for minimum cover like Rs 25 lakhs or so).
            Once he take it, can make these 1 & 2 plans PAID-UP.
            3 & 4 plans can be surrendered.

          • yogesh says:

            could you please elaborate what are the benefits of making
            2 policies Paid-up and other surrender ?

            Also one of the reason he was subscribed to save taxes for 80C?

            Which Term plan would you suggest according to my sittuation, i guess I have given you a onverall picture

          • Sreekanth Reddy says:

            Dear yogesh,
            As you/your father has already paid 6 policy year premiums, advisable to get these PAID-UP.
            You may go through this article to understand about Paid-up and surrender.

            Basic Term plan from any insurance company can be taken by your father.
            Read : Best Term life insurance plans..

          • yogesh says:

            Sir, Is this the right time to take decision on all these four policies or does it make a difference to wait for a year or two?

            Could you please explain why you suggested surrendering the Jeevan rakshak not doing paid up?

          • Sreekanth Reddy says:

            Dear yogesh,
            As suggested, your father can first try buying a Term plan. Considering his age, it can be a challenge to get higher sum assure (or) the premium quote can be on the higher side comparatively. Once he buys a term plan, can take a decision on these four policies..

            Paid up option : As your father has paid nearly 6 out of 15 policy year premium amounts.

            Surrender option : As the policies are still new, can reinvest the surrender value in a better alternative.

          • Yogesh says:

            can we make all 4 policies paid up. as surrender value is way less than the paid up?

            Honestly I need your help on this as we can’t make up the mind where to invest the money after these polices, make FDs, government bonds, NPS.

          • Sreekanth Reddy says:

            Dear Yogesh,
            Yeah, you can..but the accrued benefits will be payable to your father only on policies’ maturity dates..

            If you are not surrendering them then you dont get surrender value for re-investment..

          • Yogesh says:

            But we will get paid up amount in jeevan anand, when we declare paid up right after it, no need to wait for maturity?

            Is there something I’m missing?

          • Sreekanth Reddy says:

            Dear Yogesh.
            Did you understand the difference between Paid-up Vs Surrender? Did you go through this previously suggested article : Life insurance : How to get rid off bad insurance?

          • Yogesh says:

            Now I get it, sorry.

            Also, sonmeone recommended to invest the money in IDFC FD or saving A/c. would you suggest doing that?

          • Sreekanth Reddy says:

            Dear Yogesh,
            No need to be sorry plz!
            Once your father reviews his insurance requirements, can consider re-investing the surrender value in a product as per his investment objectives and time-horizon.
            If ‘safety of capital’ is important, can consider saving in Bank FDs.

            Read : List of all Popular Investment Options in India – Features & Snapshot

          • Yogesh says:

            could you please help me calculate the surrender value of jeevan rakshak policies?

            The premiums of one policy is 17763 and other is 16960 approx.

            I’m curious, How is the surrender amount treated while filling income tax return?

            Also, if we surrender the two policies, that means we have also premium money left for further investment. right?

          • Sreekanth Reddy says:

            Dear Yogesh,
            Suggest you to contact your LIC agent or concerned LIC branch to know the exact SV.

            As, premiums have been paid for two years, the SV wont be taxable.

            Yes,you are right!

          • Yogesh says:

            Does one need to surrender the policy before premium due date? what are the implication if one does after that?

            Also, how to show the surrender value in income tax return to not be included in taxable income?

  • G.Manjunatha says:

    which policy is best for me to buy kindly help me

  • G.Manjunatha says:

    Dear sir my name is manjunatha.G iam working in private company & my salary is rs15000..iam decided to take lic policy then my friend suggested to me to take a lic jeevan rakshak ….it is an offer gave by DO in lic we want to pay rs 3000 for each year & policy is 20 years.i decided to take it but i confused kindly do the needful please & tell me which policies is best for my daughter with low premium iam already taken lic komal jeevan to my son,,,plz plz help me
    iam instrested to save monthly rs 500

  • satish says:

    Dear Seekanth Reddy,
    my relation joined a policy jeevan rakshak plan at that age is 33 years, male(year 2015)
    sum assured is 2 lac
    term 15 year
    premium .3857(with tax) Half Yearly( 3 half yearly installments completed)
    and agent said that i gain 2lacs rs on maturity date
    Recently that person died in september with the reason heart attack , so this is early claim,my relation already submitted all early claims to lic office .The process is completed in october 3rd week
    Still my relation dont get any response from lic, How to know the process is going or not.
    i want some information of this issue and how to apporach them, please send your feedback on this, asap

    thank you.

  • Sudhakar says:

    Dear Sreekanth,
    few days before only i joined this plan (Maturity amt 1.5 Lakh, Premium 3218 half year), also i have Jeevan Anand 149 (Maturity amt 1.5 Lakh, Premium 3098 half year) but this one cover after the maturity. Please suggest me which one is best?

  • SUDHEESH says:

    Sir I have a plan to invest 12000p.a. in insurance. Which is the best in the following two

    1. 4500p.a. term plan of 2000000 for 30 years+7500 F.D. per year for 30 years

    2. 12000 p.a. endowment plan of rs.300000/- for 30years.

    i think the first one is best…is it right?

  • rishabh says:

    plz give more informatin of this policy as i m doing my project work… exclusion inclusion term premium of the policy advantage and disadvantager

  • Venugopal says:

    Sir I am new I want to know the premium calculation for 827 Rakshak pls send your support thanks. (9444111816)

  • rinku says:


    Plz tell me, how to calculate return on lic policy. you are generally said the lic gives the return only around of 4% to 6 %. plz clarified me with example.

  • yogesh saini says:

    sir, i buying a policy jeevan rakshak plan my age is 20 year,
    sum assured is 1 lac
    term 16 year
    premium .2391 6 month
    and agent said that i gain 2lacs rs on maturity date
    it is wrong or right and agent said that bonus & loyalty addition is given to this policy .
    please calculate my returns. and ask me bonus is given on this policy .it is true.
    thank you.

  • yogesh says:

    sir my mother age 52
    policy jeevan rakshak 2015
    term – 16 year
    sum assured – 1lac
    premium is Rs1391 for 3 months
    agent said that maturity amount is 2.5 lac it is true or wrong

  • vikram.g.hulamanivikram says:

    father 43 age son 9 age who is nominee in jeevan rakshak

  • atanu dey says:

    my mother aged 52 has a jeevan rakhsak policy.
    annual premium-14000 (not approx)
    tenure-10 years
    mature year at 2025
    sum assured -1,50,000
    Agent says we will get rs.4 lacs.

  • Rakesh says:

    Sir I want to know which is the best policy of LIC . maximum benefits

  • Rasmi says:

    Hi Sreekanth

    I really appreciate your analysis, Good Job. Keep it man 🙂

    I have decided to take a online term plan, my age is 35+, but someone confused me that term plans are two types.
    1. Simple term plan (this is not refundable money, it will be benefit after death of survivor, which is generally you discussed on your blog, and i am aware this.)
    2. customize term plan (Confusing part: this plan is taking high premium but end of the Premium Paying Term (may be 25/15 years) my premium will be return without any interest only base premium will be paid.

    Is it true! Please look after my concern, your answer will be awaited.

    Thank you.

  • n c manna says:

    hello sir ,
    i am a middle class person .earning very low .i have very low income.i have paid rs-29990 p.a.lici 814 table for 16 years .sum assured rs-460000.shall i get it right way . .iam working outdoor duties.iwant to protect my family because i hae a10 years son & my wife. last sept 2013 i have met an accident and my wright humaous broke and suffering till please suggest me

  • dolma ladakh says:

    I paid half yearly 3546 for 15 year for 100000 after the end of my policy for 15year…how much paid back to me at that time???

  • K.Seshadri says:

    Good effort, and balanced stance! Keeep it up

  • Ravi Kumar says:

    I paid yearly 13364 Rs. Sum-m-200000 for 12 years , can you please confirm how may getting LIC After close my policy.

  • sriram says:

    SIR, I have bought jeevan rakshak for 75000 s.a and term is 20 years. what is the maturity amount?

  • mukesh agarwal says:

    what is rate of return in plan 814 of lic its a endowment plan

    • Dear Mukesh,
      These kind of endowment plans typically give you returns around 6%. The returns are totally dependent on the bonuses declared by LIC.
      When did you buy this policy? (Policy commencement date)

  • priya dhameja says:

    I want to confirm if i pay only 100000 so how will i get the money after 10 years

  • shreyas thakur says:

    hey my mom is planning to buy this policy for me (18 years) and my brother(20 years) !! so plss sggst me tht is ths a good decision ?

  • Nilanjana Choudhuri says:

    can u suggest me a better term plan for my family… i am a housewife and my husband earns only 10000 per month … i have a daughter of 4 years of age. waiting for your reply

    • Sreekanth Reddy says:

      Nilanjana – Kindly visit my post on “Best online term insurance plans”. Your husband may consider taking LIC’s e-term plan. Also, make sure he updates the nominee name in the policy.

    • sagar dhumal says:

      My self Sagar Dhumal I help about LIC pls contact my cell no 9167378026

      pls send ur no I will call u

  • D.V.Ranga Rao says:

    It is suitable only for middle income group

    • Sreekanth Reddy says:

      D.V.Ranga Rao – the suitability of a financial product depends on many factors. Each family’s/indidvidual’s financial requirements may be different and unique. We can not categorize in a generic way.

  • Malay Kumar says:

    LIC’s Jeevan Rakshak Plan is the best available endowment plan available across Insurance Market. It provides risk cum saving to the lower strata of society. This affordable as premiums are as low as Rs.250 pm for SA 1 LAKH.
    As against the over all payment of approx 1.4 lakh one gets Rs.2.8 lakh plus Income tax rebate and life risk . Wonderful Plan. Above all this plan is stand alone and will not be clubbed with other insurance coverage while calculating risk. Apart from this plan is a non medical scheme and easy to take.
    Financial planner you need to study things well before advising to the masses. This Policy is A must for every household.

    • Sreekanth Reddy says:

      Malay Kumar – Appreciate your convincing skills. Let us consider an example of a typical lower income family’s financial situation. Husband will be a sole bread winner with an income of say Rs10,000 pm. His spouse and kid(s) may be dependent on him for all their financial needs. Unfortunately if that breadwinner passes away then do you think this Rs2 Lakhs ( max Sum assured offered under jevan rakshak) is sufficient enough for the family? You have highlighted about ‘risk coverage’in your comment. Do you think is this THE PLAN for risk coverage? Don’t you think LIc’s Term plans (or any other comapanies’) are better options to cover the life risk. For a premium of Rs,7500 the life assured may get a life cover of around Rs70 Lakhs under LIC e-term plan. You have also highlighted about “savings” in your comment. Do you think insurance is for savings or risk coverage. If it is for savings then there are better investment options than this plan. These options can generate higher returns (inflation/tax adjusted) compared to this plan. Don’t you think that a Term plan is a must for every breadwinner in a household? First, study client requirements and then study/identify financial products. Cheers!

      • Manohar says:

        Sreekanth, excellent. You gave a befitting reply.

      • Malay Kumar says:

        Dear friends, I do not know how many of you have moved out in the rural areas of Bihar,Jharkhand,Orissa and Uttar pradesh to sell an Insurance Policy. You also must not be knowing there are many fraud chit fund type companies cheating people in the name of saving in those places where even state or central government administration are unable to make their presence. But our fellow Indian brethren live at those deprived places and the Agents of LIC -rather I’ll call Angels- are able to guide them for Insurance Policy. It was a joke for me to see your illustration of a family having an income of Rs.10000/- pm. People at those places have ample of food grains to feed themselves but they do not have cash to spend,what to talk of Insurance Premium.
        Another aspect,psychology of the people. The first question the people of Rural India ask to an Insurance Agent or any Agent doing financial services-“Kitna milega?”(How much shall I get?) If the agent answers ‘nothing’; his deal immediately gets vanished. If agents scribes death benefits people ask him to get lost.
        All the theories are applicable to those who understand financial planning and go for it. Agents know the importance Term Assurance but it can not be forced on anyone.
        As far as the question of Rs.200000/- being sufficient or not,it depends on various factors.
        I have a live example where son of a deceased insured person started a cycle repairing shop with the help of Insurance money of Rs.50000/- .
        We can not judge what is sufficient for whom sitting here on blog.
        I have 22 years of experience in the Life Insurance sector and eager to share with all of you. I do not want to make any blog a battlefield as one of the friend termed the ‘reply’ as befitting. We all must work towards the welfare of the country and the citizens of India.

        • Sreekanth Reddy says:

          Malay Kumar – With due respect to your work experience. Professionals like you should come forward to create awareness about term insurance. If not people like you then who will take the initiative?
          If you read your comments again, you may realize there are contradictory statements.Had you convinced the person ‘who deceased’ to take TERM policy then family’s position would have been much better. It is not that people invest their entire savings to buy insurance. So, we can convince them a portion of it can be routed to term insurance and remaining portion into income generating investment options.
          If your clients/prospects ask “kitna milega?” then tell them insurance does not make money for them. They have to work to make money.
          I agree that it is very tough to convince people to go for term insurance. But it is not impossible. I can proudly say that i have convinced around 52 families to take term insurance in the last 3 years. Believe me, these families are from different income levels. And few of them are from villages/small towns in Andhra,Karnatka and Tamilnadu.
          Lastly, this blog is for knowledge sharing and certainly not a ‘battle ground.’ You can share your thoughts/views openly.

          • Guys, every one should understand that Insurance is not saving use this concept to insure yourself by term plan with best settlement ratio & low cost thats it always keep distance from those who tell you endowment plans.

          • Sreekanth Reddy says:

            Ajay – Thank you for sharing your views. Insurance does not make money, we have to work and make money. Insurance should be bought to cover the risks.

  • yakub says:

    Srikanth garu plz can u explain the amount will come under this plan.policy of 1lakh .what will we get at last and if in middle accident how much amount and etc.. so that i can get to an idea about the policies it would be a good help.thank u hav a great day

    • Sreekanth Reddy says:

      Yakub – Before recommending this plan, i would like to know few details from you. Your age, existing life insurance coverage etc., You have mentioned “if met with an accident”in your comment. So, kindly first analyze do you have sufficient life insurance coverage before opting for this kind of plan.

    • Veenu says:

      after paid 1 lac you will get around 1.50-1.75 L

  • Pradeep Hattangadi says:

    Nice analysis. Good to keep the investors informed of the pros and cons

  • M.R.Adyanthaya says:

    I liked your comments. Please keep alerting investors like this. I am sure hike in investment limit under 80C may prompt many to go for this kind of policy without proper analysis .

    • Sreekanth Reddy says:

      Dear Sir – Thank you for your comments. Kindly keep giving your valuable feedback.

      • anil kasar says:

        what is loyalty addition?
        and how it is calculated? ????

        • Dear Anil,
          Loyalty Addition is a type of bonus which is declared for being loyal to the LIC and completing a longer tenure. It is a one time payment. Generally it’s declared at the end of the policy, but for some policies it might be applicable after completion of minimum no of policy years (like 5 or 10 years).
          Let’s say, LIC declares Rs 40 per Rs 1000 Sum Assured on a 20 year plan. Mr X has that policy for sum assured of Rs 5 Lakh. On maturity, Mr X will get Rs 20,000 as one time loyalty addition. This is paid along with the maturity benefits.

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