The Life Insurance Corporation (LIC), India’s largest insurer, recently launched a new assurance policy called Navjeevan. It was launched just before the tax filing season. According to its website, this is a non-linked endowment assurance plan that ensures profit. The premium can now be paid in two ways- either lump sum, as a single premium, or under the Limited Premium option with a five-year payment term. LIC’s Navjeevan plan is available for purchase through both online and offline modes.
The Limited Premium payment option is categorized in two parts. If you are aged 45 years and above, you get two choices in terms of the death benefit –either you’ll get 10 times the annualized premium or 7 times the annualized premium. But if the life proposed is under 45 years old, only Option 1, 10 times the annualized premium as death benefit, is available. The minimum age to avail of the plan is 90 days and the maximum age is 65 years.
Here are the important features of LIC’s Navjeevan plan:
Benefits under the Navjeevan plan
Maturity benefit: If the policyholder survives till the end of the policy term, considering all the premiums have been paid then he/she will receive the sum assured on maturity along with ‘Loyalty Addition’, if any.
Death Benefit: If the policyholder dies before the policy’s stipulated Date of Maturity. If a person dies death during the first five policy years, i.e. before the date of commencement of risk then LIC will refund all the premiums paid but without interest. The sum assured will be payable on or after the date of commencement of risk.
If the policyholder dies after the completion of five policy years but before the stipulated Date of Maturity, the nominee will receive the sum assured on death along with any applicable Loyalty Addition.
Optional rider benefits: The plan also offers LIC’s Accidental Death and Disability Benefit Rider. In case the person dies accidentally the Accident Benefit Rider Sum Assured will be payable as lump sum along with the death benefit under the Base plan. The maximum amount that can be availed here is Rs 1 lakh.
According to Zee Business, if you opt for the Limited Premium option for a sum assured of Rs 10 lakh, you will have to pay the monthly premium of around Rs 9,628 in the first year, and Rs 9,430 from second year onwards.
On maturity after 15 years, you would be eligible for Rs 10 lakh along with the Loyalty Addition. Under the single premium payment option for the same term and sum assured amount, one would have to make a one-time payment of around Rs 5,01,287.
So you need to think carefully if it is good enough for a long-term investment.