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.
Maturity Benefit = Maturity Sum Assured + Loyalty Addition
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.
What is your opinion on LIC Jeevan Sangam? Do share your views and comments.
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This post was last modified on July 10, 2023 6:27 pm
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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.