LIC has launched 4 new plans in 2016. In this post I have tried to list down the important features, details and my recommendations on all LIC New Plans that are launched in 2016-17.
From January 2016 to December 2016, LIC has launched three Endowment plans and one Money-back plan. Out of the three Endowment plans, one is a Limited Premium Payment Endowment scheme. The new plans are namely; LIC Bima Diamond Plan, LIC Jeevan Pragati, LIC Jeevan Shikhar & Jeevan Labh
Before discussing more on these plans, let us understand what are Endowment & Money-back plans.
What is an Endowment plan? – It 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.
What are Money-back policies? – They provides life coverage during the term of the policy and the maturity benefits are paid in installments by way of Survival Benefits (money-back payments).
What are Limited Premium Payment Insurance Plans? – A limited premium payment plan is a plan where you pay the premium for a shorter span of time and enjoy the benefits of an insurance cover for a long time.
LIC New Plans list – Launched in 2016 – Snapshot
I have listed down the important features of LIC of India’s new plans that are launched in 2016 along with my recommendations (whether to ignore a plan or to buy).
(Click on the image to open it new browser window)
- Latest LIC policy : LIC Bima Diamond Plan
- Bima Diamond plan was launched in September, 2016 and is available for purchase till 31st August, 2017.
- This is a non-linked, traditional Money Back policy. Survival benefit is payable at an interval of every 4th year.
- It is a limited premium payment plan.
- Maximum Basic Sum Assured that is offered under this policy is Rs 5 Lakh only. So, this is surely not enough if you are looking for high life insurance cover.
- There are no simple and annual bonuses under Bima Diamond Plan. Loyalty Additions (if any) alone are paid on policy maturity.
- This plan can offer you returns of around 4% to 5% only.
- If you are planning to buy this plan, advisable to ignore it. This plan neither offers you high life cover nor gives you decent investment returns.
- If you have already invested in this policy, you may let it lapse.
- For complete details on this plan, kindly read : LIC Bima Diamond Plan – Review & Returns Calculation.
- LIC Jeevan Pragati
- This plan is available for purchase from February, 2016.
- It is a non-linked, with-profits and savings cum protection plan.
- The main feature of Jeevan Pragathi plan is the ‘sum assured on death’ (part of death benefit) automatically increases after every five years during the term of the policy.
- The Death Benefit under this plan is ‘Sum Assured on Death + Vested Simple Reversionary Bonuses + Final additional bonus’, if any, shall be payable to the nominee.
- On survival to the end of the policy term, the maturity benefit which is ‘Sum Assured on Maturity + Simple Reversionary Bonuses + Final Additional bonus (FAB)’ if any, shall be payable to the policy.
- Final Additional Bonus is not payable on PAID-UP policies.
- If you are planning to buy this plan, you may ignore it.
- The expected returns on this plan can be around 7%. But do remember that the returns are highly dependent on the bonus rates that LIC declares every year. (Read : ‘LIC’s latest Bonus rates 2016-17‘)
- For complete details on this plan, kindly read : Review of LIC Jeevan Pragati plan with an illustration.
- LIC Jeevan Shikhar Plan
- This is an endowment plan. It’s a participating, non-linked, with profit, savings cum protection plan.
- This was available for purchase till March 2016 only.
- Its a singe premium plan wherein the proposer can choose the Maturity Sum Assured (MSA).
- On policy maturity, the Maturity Sum Assured along with Loyalty Addition (if any) shall be payable.
- The expected returns from this plan are around 6%.
- In case, you have already bought this plan, you can consider surrendering it. The policy can be surrendered at any time during the policy year. The Guaranteed Surrender Value allowable shall be as under:
- First year (after 3 months) : 70% of the Single premium paid.
- Thereafter : 90% of the Single premium paid.
- For complete details on this plan, kindly read : Jeevan Shikhar plan – Review & Calculation.
- LIC’s Jeevan Labh Plan
- Jeevan Labh is a Limited Premium, non-linked, with profit Endowment Plan
- The death benefit under this plan is : Sum Assured + Bonus + Final Additional Bonus (if any).
- The maturity benefit under this plan is : Sum Assured + Bonus + Final Additional Bonus (if any).
- The expected returns can be in the range of 5 to 7% depending on the premium payment term.
- If you are planning to buy, you can ignore it.
- If you have already invested in this plan, you may let it lapse. (Read : ‘How to get rid-off unwanted life insurance policy?‘)
- The detailed review on this plan is available @ LIC Jeevan Labh Plan – Review, illustration & Returns Calculation.
My standard suggestions :
- Returns : Are you investing in these kind of plans for maturity returns? – The traditional life insurance plans can offer returns in the range of 4 to 7%. Personally, I believe that this is a very low return on investment, considering the fact that one has to remain invested for 10+ years. So, unless you are content with low returns, these kind of conventional insurance plans may not be for you. (Read : ‘Traditional life insurance plan – a terrible investment option?‘)
- Life insurance cover : Are you investing in these kind of plans for insurance cover? – The main point to note here is, ‘quantum of life cover’. These kind of plans are very costly to get high sum assured. So, if your requirement is to get adequate life cover, affordable Term insurance plans are the right choice.
- Tax Saving : Are you investing in these kind of plans for tax saving under section 80c? – if that’s the case, even a long term Small Savings Scheme like PPF (Public Provident Fund) can be a better choice than traditional life insurance plan. (Read: ‘PPF + Term plan Vs Traditional life insurance plan‘). You can also look into ELSS tax saving mutual funds for long-term goals.
Generally, December to March is the peak season for the life insurance companies in India. Most of the life insurance plans are offered as ‘tax-saving cum investment’ schemes. So, kindly be aware of the pros & cons of the financial products before you buy.
- LIC’s New Plans in 2017 ;
(Featured Image courtesy of bplanet at FreeDigitalPhotos.net) (Post published on : 7-December-2016)
JEVAN TARUN BABY POLICY OF 19 YEARS I SELECTED AND RECENTLY I PAYED IT POLICY ,IN THAT SMALL CONFUSSION I GET IT.AFTER 10 YEARS IAM UNABLE TO PAY REST OF YEARS, SO HOW MUCH I GETTING ,WITH OR WITH OUT INTREST I RECIEVED.PLZ CLEAR ME
These kind of traditional policies can give at best 4 to 5% returns.
If your requirement is life cover, you may buy a term insurance plan.
Kindly read : LIC jeevan tarun – review..
Can you please suggest any LIC plans for best investment return purpose for myself.
If you are looking for decent return on investment then you may consider other investment options. Kindly do not mix insurance with investment.
Kindly read :
List of investment options!
Traditional life insurance plan : a terrible investment option?
Your articales are always good . ☺
I was wondering if there is any review for SBI smart shield plan from you.
Dear Tanusree ..No, I have not published any article on Smart shield plan..
Suggested readings :
Best term insurance plans
HDFC Click 2 Protect 3D plus review
Aegon term insurance plan review
ICICI Protect smart review
Thanks for quick response . All articles are very good. I have option to add accidental death benefit to insurance which cost extra 3500/- for 50 lac cover ( base term cover 1Cr ) .Is this a good idea ?
Dear Tanusree ..If it is just a death benefit cover with no Permanent disability risk cover then may be a stand-alone PA cover can be considered.
Kindly read : Importance of Personal Accident insurance cover.
hi, sreekanth sir can u tell what is best plan in lic in 2017 and best return
May I know your requirements? Are you looking for life cover or better investment returns?
I am 41 years and looking for Mutual fund or any saving plan with Medium returns.
May I know your investment time-frame?
Kindly read : List of investment options!
my son age 22 monthly earn 15000/- what plan to take kindly advice
Dear chelladurai .. May I know his investment objectives & time-frame?
Is anyone dependent on him, financially?
please contact my no is 9536780787 Lic Adviser Sumit Tyagi Meerut
When is a good time to buy a Term Insurance? Please advise.
Dear Ramya..can be today 🙂
Kindly do not postpone buying a Term insurance plan.
Read: If life is unpredictable, insurance cant be optional!
Is it recommended that both husband and wife should take the term plan when both of us are working???
Dear Ramya..If both are earning then can consider taking term insurance plans.
Both of us individual term insurance plans is it?
Anything that we can take combined?
Dear Ramya..Better to have separate policies.
Also, Read: Why Personal Accident insurance cover is important?
Sure thank you. Will do
I have been investing in ELSS for 1 year and planning to stay invested for 10-15 years. My company provides decent health insurance. I do not have any life insurance. How important is it to invest in LIC for tax/ life/ investment purposes?
My monthly contributions are:
ELSS – 4500/-
PF – 6000/-
Monthly take home – 70k
If i should, how much should i invest for LIC per year? What abt PPF? Please advise.
Kindly read : Why insurance is important? If life is unpredictable, insurance is a must!
May I know your financial goals & time-frame?
PF, NPS and ELSS i have planned to stay invested for 25-30 years (retirement)
I am looking at LIC to help in my mid term goals may be for 10-15 years or so.. (kids education and home etc So may require 10L or so, Hence wanted to check how much should i invest in LIC which covers investment/ tax/ insurance everything.
Suggest you not to mix insurance with investment.
If you are planning to opt for Endowment or money-back plans, kindly avoid them. They can hardly give you a return of around 5% on maturity.
Traditional life insurance plan – a terrible investment option?
Kid’s Education goal planning & calculator.
So your suggestion would be – Go for term insurance if u want life cover, and if you? need better returns go for other options like ELSS and other investment opportunities.
Hence not combining both. Right??
ULIP will not serve the purpose ? Please advise
ULIPs do serve the purpose if your investment objective is better real rate of return in long-term (assuming equity based portfolio is chosen in ULIP policy).
But given a choice between an ULIP Vs Equity fund for long-term wealth creation, don’t you believe that MFs are a better choice, given their liquidity, flexibility, wide choice, control, etc.,
Personally, given a choice, I prefer to invest in MFs to ULIPs.
Thanks for that sreekanth.
So your suggestion would be – Go for term insurance if u want life cover, and if you need better returns go for other options like ELSS and other investment opportunities.
Hence not combining both. Right??
Hope my understanding is right. Could you please confirm?
Your interpretation is correct 🙂
I need suggestion for one of my friend as she is 25 years and getting CTC 325000/ annum and could invest 5-7 k /month. She asked me to suggest for investment/ insurance.
I have already suggested her not to invest in LIC rather she can opt for term plan later around reaching the age of 30.
And for savings/investment with better returns she could go for PPF & mutual fund investment.
By opting for PPF she can also show investment for tax saving later on.
Please suggest what I suggested is well enough or not ?
And also suggest better option for PPF investment, by bank ICICI/HDFC/Post Office ?
If life cover is required, plans like endowment or money-back can be avoided (be it of LIC’s or any other companies’).
If she does not have any dependents now, yes she can plan to take term insurance cover when it is required.
If tax saving and long term wealth accumulation are her investment objectives, can consider investing in an ELSS tax saving mutual fund. Ex – Franklin Taxshield fund.
Best ELSS Funds.
Traditional life insurance policies – a terrible investment option?
Im Gopi 32 years and im looking for high Return plans with sum assured of Rs. 10lakhs..
If you are looking for high returns then better not to invest in Insurance plans.
Kindly do not mix insurance and investment.
May I know your investment time-frame? Do you have any dependents? Do you have adequate life cover?
my daughter is 21 years joined MNC co last 5 months. her projected income for this year is 630000/- upto 31.3.2017. we need to plan for her investment for all possible tax savings & investment growth. so far she has invested Rs50000 in PPF . pls guide the best possible investment for her. she can invest monthly Rs30000 in future.
Dear mukund Ji,
Considering her profile, she can consider investing in an ELSS fund may be 2 to 4 installments over the next 3 months.
List of investment options
Best ELSS funds.
Tax treatment of various investments.
List of income tax deductions.
I am 30 years old & want to take one term policy for 50 Lakhs with Critical illness rider.
Is it good idea to add critical illness rider with term policy or better to take separate policy for critical illness.
Please suggest some policies which will be good in your opinion.
In case, your family has a history of any CI, advisable to take a stand-alone one.
Best Term insurance plans.
Best portals to compare health insurance plans.
Dear Srikanth, why at later stage, not right now? Health insurance provided by company. For accident, I’ve chosen National Insurance Personal Accident, premium 1118 pa for 10Lac SA.
Please suggest best Life Insurance plan. And better accident insurance plan, than my one, if there.
My previous comment is a suggestion..If you believe that life cover is a must to you at this point of your life-stage, kindly go ahead.
Buy a term plan from any insurer of your choice. Kindly disclose the required info in proposal form honestly.
Suggest you to buy a health insurance plan and advisable not to depend entirely on Employer’s group cover alone.
Dear Srikanth, no offence please. Can you please recommend me two best plan for Life & Health? Cover 20 lakh & 5 lakhs respectively.
Kindly go through the suggested articles plz.
Dear Srikanth, I’m 27, unmarried male from Kolkata, working in private sector company. CTC is 2.8 LPA. I want to purchase a life insurance for me. Please suggest best plan in market.
In case, you do not have dependents and also do not have financial liabilities, you may buy a term plan at a later stage of your life.
Do you have adequate health and personal accident insurance coverage?
Nice explanation. Keep rocking
Thank you dear Raghul..Keep visiting 🙂
Rakesh Sharma LIC Advisor my cell no. 08262811188