LIC Jeevan Sangam is a new Endowment plan from Life Insurance Corporation of India (LIC). LIC is launching this policy on 4th March, 2015. LIC’s Jeevan Sangam is a participating, non-linked, savings cum protection and single premium plan. The risk cover in Jeevan Sangam is a multiple of single premium. This new plan is available for sale for a limited period of time i.e., 90 days from the date of launch (This plan is open for purchase till 1st June 2015).
In this plan, the proposer can choose the Maturity Sum Assured (MSA). The single premium amount is based on the chosen MSA and the age of the life insured.
Features of LIC Jeevan Sangam :
- Jeevan Sangam is a Single Premium Endowment plan. It is a conventional / traditional plan (Savings cum protection policy).
- Minimum Entry Age – 6 years
- Maximum EntryAge – 50 years
- Minimum Maturity Sum Assured (MSA) – Rs 75,000
- Maximum MSA – No limit
- Basic Sum Assured (BSA)– 10 times the tabular single premium
- Policy / Plan Term – 12 years
- Premium Mode – Single Premium
- Maturity Benefit in Jeevan Sangam : On policy maturity, the Maturity Sum Assured along with Loyalty Addition (if any) shall be payable.
Maturity Benefit = Maturity Sum Assured + Loyalty Addition
- Loyalty Addition : The Loyalty Addition shall be payable on death of the policy holder or on surrender of the policy, provided the policy has run for atleast five policy years, or on policyholder surviving till policy maturity.
- Death Benefit in Jeevan Sangam :
- On death during first five policy years:
Before the date of commencement of risk: Single premium amount paid will be refunded. After the date of commencement of risk: Basic Sum assured i.e. 10 times the tabular single premium shall be payable. (What is ‘Date of commencement of risk’ : In case the age at entry of the Life assured is more than 8 years or more, risk will commence immediately. If age is less than 8 years, the risk under this plan will commence from one day before the policy anniversary coinciding with or immediately following the age of 8 years.) - On death after completion of five policy years but before the stipulated Date of Maturity: Death Benefit is Basic Sum assured i.e. 10 times the tabular single premium along with Loyalty Addition, if any, shall be payable.
- On death during first five policy years:
- Surrender option & Surrender value : The policy can be surrendered at any time during the policy year. The Guaranteed Surrender Value allowable shall be as under:
- First year: 70% of the Single premium (excluding extra premiums paid and taxes).
- Thereafter: 90% of the Single premium paid (excluding extra premiums paid and taxes). (If policy is surrendered after completion of 5 years, Loyalty addition (if any) will also be paid)
Illustration of LIC’s Jeevan Sangam Plan
How does Jeevan Sangam plan work? As mentioned above, it is an endowment plan. The premium is dependent on your age and on the Maturity Sum Assured (MSA) you choose. You have to pay premium only once and risk cover is available through out the policy tenure. On maturity, you get MSA, along with Loyalty Addition (LA).
Calculation of Returns on LIC Jeevan Sangam
So, is this plan a good one or bad one? Is it worth your money? Let us calculate the returns with an example. I have used the IRR (Internal Rate of Return) function of Microsoft Excel (MS Excel) to calculate the returns on policy maturity.
As calculated above, the returns from LIC Jeevan Sangam can be around 6% to 7%. I have assumed 10 % of Sum assured as Loyalty Addition (which is on a higher side), still the returns are just 6.83% only. You may expect Loyalty Addition (LA) of around 8% of Sum Assured as one time payment. So, the returns are highly dependent on Loyalty Addition payout.
My opinion :
We are at the fag end of the Financial Year 2014/2015. People generally rush to buy tax-saving plans at the fag end of a financial year. So, its a perfect time to launch a traditional policy, that too a single premium plan. Let’s say, your Section 80C is still not complete and you can invest Rs 50,000 more. In this scenario, a single premium plan looks like a perfect investment to fill your Section 80C. Is this the right way of planning your taxes?…..NO….
Do not buy a Life Insurance plan, just to save some taxes. You will curse yourself if you buy a traditional plan in a hurry to save tax.
- Do not mix insurance with investment.
- You can expect returns of around 6% from these kind of policies.
- It is better to buy a simple Online Term Insurance plan (Read my article on “Top 9 Best Online Term Insurance Plans“)
What is your opinion on LIC Jeevan Sangam? Do share your views and comments.
Continue reading :
Dear sir, i need to invest 5000 annually for the benefit of my children whose age are girl 11 yrs and boy 3 yrs,which is the best option
Dear kokila,
May I know if you have adequate life insurance cover?
Kindly read below articles;
Kid’s education goal planning & calculator.
List of best investment options!
Hi Sreekanth,
To Cover 80C for my wife,
1. she is planning to invest in some one time investment plan by today/tomorrow only (as there is no time left).
2. She already has various LIC term insurance with 33k premium.
3. She needs to invest 90k to cover for 80C
4. She may leave the job next year, so she does not want to go for another term policy (moreover when amount is so high i.e. 90k)
Please suggest.
Regards
Ranjan
Dear Ranjan..I know this is a late reply ..
Suggest you to plan taxes from the beginning of the FY itself. This FY, plan your taxes from this month itself.
Read:
List of best investment options.
Best ELSS Funds.
Hi ,
I am Ravi and my age is 34. Till now i have never invested or taken any insurance. Now i would like to invest one lakh for 10 years. Please advise me. What do you think ,which plan should i go for for high assured income at-least when i reach 45 age.
i have no knowledge in insurance or mutual funds
My email id : ravikiran**@yahoo.com
Dear Ravi..Do you have any family member(s) who are financially dependent on you?
i have my Parents who are dependent on me. so 2 members
Dear Ravi,
Suggest you to kindly buy a Term insurance plan and a stand-alone Personal Accident insurance plan at the earliest.
Read:
Best Term insurance plans.
Best Personal Accident Insurance plans.
Once you buy these, you can buy health insurance plans for self & parents.
Also, read:
Best portals to compare medical insurance plans.
Blocks of Financial Planning pyramid..
Hi Sreekanth , i want to invest 150000 for investment purpose only( insurance not required) to gain maximum profit in next 10-15 years.
what is the best option ?
Dear Rahul,
You may consider investing in equity oriented mutual funds.
Kindly read:
Best Equity funds.
Best Balanced funds.
MY MF picks.
Greetings,
I’m planning to pay single premium 2 lakhs . What are the final benefits amount after 12 years Under LIC Jeevan Sangam .
Please let me know the details
Hi Sreekanth,
As of now I have 5 LIC policies listed below …planning to close all the below expect Jeevan Anand – maturity is in 2019.
Money back 4 lak (25k premium annually)
Money back 1 lack (7K premium annually)
Child plan 1 lakh (5k premium annually)
Lic term plan of 14 lakhs (5k premium annually)
Jeevan Anand 1 lakh (12K premium annually)
And planning to buy a term insurance from HDFC or ICICI or ???
I do have medical policy from Max bupa of 18 lakhs
Pls advice..thanks in advance
Best wishes,
Bhagyaraj Nair
Dear Bhagyaraj,
Do you want to close LIC Term plan too? Any reason? (costly??)
Kindly go through my article : How to get rid off bad insurance policies?
Hi Sreekanth,
I’m planning to close LIC term plan.
Reason: will buy a new term plan from HDFC or ICICI as said before, because for 50lakh Sum assured the premium is less than 10k for my age, whereas in LIC its costing 5k for 14 lakhs Sum assured
pls suggest..
Regards,
Bhagyaraj Nair
Dear Bhagyaraj,
Suggest you to first get new term plan and then discontinue LIC term plan (if required).
Dear Sreekanth,
Thanks for your views & prompt reply
Regards,
Bhagyaraj
hello Sreekanth sir…i am vikas, private service man…i am earning 20k per month…
i have a boy kid 1 year 3 month….kindly let me know any lic policy with great return assured…i am planing to invest 5000 to 6000 per month…
This policy should not involve in ULIP or share market…
Kindly let me know any policy relate my son education after getting age of 15 years..or is there any policy for myself…i have 5000 amount per month to invest…
please share your thoughts on my email id vikaskhatter29@gmail.com
i shall be grateful to you…
kindly tell related lic policies schemes.
Thanks
Dear Vikas,
You have to consider taking a term plan. Do not buy a child plan.
Kindly read my articles;
Term insurance Vs Endowment insurance plans
Best Online term insurance plans
Why you should avoid child plans like LIC Jeevan Tarun?
sir.. iam a advisor of SBI LIF INSURANCE. IAM NOT GETTING BUSINESS. WHAT IF I CHANGE THE SBI LIFE TO LIC? CAN I GET BUSINESS IF I JOIN LIC?
Dear Sujatha,
I can’t comment on this..
Dear Sir,
I’m recently joined LIC. I’read your blogs which is really helpful for me.Can you please let me know if someone ask which LIC policy is suitable for me and which is not so could you please suggest me.
And my another query is that Is there any Calculator available where I can define end-user regarding his maturity and other benefits.
Could you please revert me @ robinarora@outlook.com
Thanks in Advance!
Dear Robin,
If you ask for my opinion then I would suggest you to educate your prospects on Term insurance plans. Try to sell term insurance plans only (e-Term, Anmol Jeevan..). As of now, I have not developed any calculator as such.
Hi ,
My father came across Jeevan Sangam and really wants me to take this as their is no money loss in this apart from other Term insurance which charge some amount but do offer good amount in case of death for any unseen reasons.
I am 29 years old and have annual salary of around 10 Lacs per annum. I am single but might get married by end of this year and planning to buy a flat next year.
I have kept most of the amount as FDs and have also started a monthly SIP of 10k recently.
Is it fine if I take Jeevan Sangam for 10 years without buying any other term insurance? If yes, what should be the minimum amount that I should invest in it?
Appreciate an early response as I got to know the last day to buy this policy is 4th June. Thanks in anticipation.
– Nitin
Dear Nitin,
Considering your age, risk profile & earning potential, you should be investing in risk-oriented products and not ‘jeevan sangam’ kind of traditional plans.
Suggest you to read and make your father read below articles;
* Avoid investing in FDs / RDs (safe investments) for long term
* 6 most common Personal Finance Mistakes people make
Lic policy
my date of birth 06/01/1974. i want to invest one lak.what will the total amount retun from this police?
Dear Amit,
Why do you want to invest in this plan? Did you go through my article and understood the pros & cons?
Please provide your valuable feedback on LIC Jeevan Akshay 6!
Dear Rajiv,
What is you age? Why do you want to buy this plan? Let me know your views..
hello sir,
Please advise for this Jeevan Sangam policy, supposedly if I invest 2Lakh as a single premium, and MSA is 1Lakh and there is no death happened in next 12 years from now, What will be the maturity benefit i’ll get on Completion date?
I’ll get this single premium + MSA + LA on maturity or not (in Case if there is no death happened)
Also, would this amount be taxable at that time?
Dear Pulkit,
The maturity proceeds are tax exempted.
Why do you want to invest in this plan?
How is this different from a fixed deposit for 12 years in a bank?
Dear Naveem,
If returns are your primary motto, you may get betters returns by investing in a FD.
If risk coverage is your requirement, suggest you to buy a term plan. Read my article “Top 7 best online term insurance plans“.
Well explained, better than many, but, how do they (LIC) decides Loyalty Bonus, on Market or on own performance.
Dear Mr Sharma,
Thank you.
Loyalty Bonus rate is dependent on LIC’s performance.
Oh no …not again…….. My Jeez when will we see an end to all these ….? My gosh….. How is LIC hurting the interests of these CFPs…? Who pays them to write against LIC..? My God…. Give LIC a break…….
Lol 🙂
Mr. Jamal Akhtar you want premium for LIC child plan? , I will share kindly tell your daughter age and your age.
More Insurance companies are going to come. Let us see what returns they give.
Dear Shivakumar,
Let us not expect ‘returns’ from an insurance policy. Insurance is for risk coverage only. Buy term insurance plans only.
Dear Reddygaru,
I will be retired on 31.12.2021, but till now I am not having any life risk policies. By 28.03.2014, I will get the maturity amount from LIC. How I have to invest that amount for my future life.Pl.advice.
Regards,
(U.R.V.Ramana Rao)
Dear Mr Rao,
What is your age? Do you have any family member who is dependent on you?
Are you saving / investing enough for your retirement life? What are you existing investments (allocated to retirement goal)?
sir in sukanya samriddhi yojna, my daughter age is 10 year .i want to invest only for twelve year from the date of account opening.can i close this account when there is marriage in the age of 22 years.is it mandatory to operate account 14 years.
Dear Pawan,
The account can be closed after your daughter gets married.
Premium amount of jeevan sagun n children moneyback policy
Dear Jamil,
As of now, I do not have the premium charts. Will share them ASAP.
Plz share the premium amount in various age.