Life Insurance Corporation (LIC) of India has launched one more new guaranteed single premium plan called Jeevan Nischay. This plan is very much in line with last year’s Jeevan Aastha. This new policy will be sold to ‘existing‘ customers of LIC and will be sold for a limited period until end of March 2010. Yes, you got it right – this plan will be sold to only those who have an existing insurance policy with LIC.
Just as in the case of Jeevan Aashta, Jeevan Nischay is a single premium bond, as the protection it offers is only involving the basic cover. It will be a good instrument for guaranteed returns if not the efficient insurance, given the turbulent market conditions in the current economy. The specimen Maturity Sum Assured per Rs. 1000/- single premium is given below for some ages and terms:
| Age at Entry | Jeevan Nischay Policy Term | ||
| 5 years | 7 years | 10 years | |
| 20 | 1257 | 1410 | 1718 |
| 30 | 1256 | 1409 | 1715 |
| 40 | 1249 | 1400 | 1699 |
| 50 | 1226 | 1369 | 1645 |
As you can infer from the above table, an investment of Rs 1 lakh would mature into Rs 1.7 lakh after 10 years for those below 40 years at the time of availing policy. Other salient features of this policy include:
- Minimum age at entry should be 18 years with 50 years being the upper limit.
- The policy terms are five, seven and 10 years (See the table above).
- The Minimum Single Premium is priced Rs.10,000 with Maximum Single Premium being Rs.10,00,000.
- If premium amount is Rs. 25,000 or higher, the policyholder would receive a higher maturity sum assured due to available incentive.
- Loan facility available under this policy.
- Policy can be surrendered after one year of commencement of the policy.
- If the policyholder is not satisfied with the terms and conditions of the policy, can opt for refund within 15 days from the policy purchase date.
- On death during the first policy year, five times the single premium is payable.
For more detailed information on the policy visit this illustration or refer to lic’s policy home. You may also be interested in knowing about the previous policies by LIC such as Jeevan Varsha and Jeevan Aastha.
Disclaimer : This information is based on the details as available on LIC site at the time of writing this article. Please contact LIC agent / Development officer/ Regional office for official and accurate details.
{ 104 comments… read them below or add one }
I feel that return here is better than KVP? is that so?
Well, it needs a bit of understanding to compare Kisan Vikas Patra (KVP) with Jeevan Nischay. In KVP, as on date the govt gives an intrest of 8.75% pa. More over KVP matures in 8 years 7 months. If you take the same example as that of the one illustrated above for a sum of 25K, LIC generates around 44.5K. But KVP generates almost 44K in 8 years 7 months itself!
Benefit from LIC is that it has insurance cover for all 10 years while giving variable loyalty additions depending on the company performance. LIC has just topped up that KVP profits with a minor enhancement through variable pay along with insurance cover. That way Jeevan Nischay is marginally beneficial compared to KVP.
hi
could you please suggest best equity mutual funds I want to start to do with SIP
Thanks
vinayak
One more dumb insurance product I guess. Anyways.. good for those who seek non-risky returns at a very basic insurance cover. I am still wondering how Jeevan Aastha was sold for so many people.
Depends from individual to individual. If someone doesn’t want to risk their principal and look for guaranteed maturity value, then this policy is for them. But if you are an aggressive investor, I still suggest Term Insurance policy for higher insurance at low cost while the saved money can be put into investment through various other modes.
Rightly said Mohan. I belong to the second category for sure
Good, you were able to identify where you are!
Can’t agree with you more. There is nothing to beat Term Insurance. They are cheap and they do the job they promise to.
Very true!
gOOD REVIEW Mohan. I have invested in 2 LIC policies, only for my TAX Exemption; never seriously giving a thought on returns . But now, with my current employer none of my investments is of any use, making me wonder where I need to Invest effectively…..
Do share some good investment plans, if you are aware of any…..
Be careful about choosing your policies. The insurance agents can take you for a ride if you aren’t careful. If you are looking at pure insurance cover, go for term insurance. That gives you a very high coverage for low premium. Now, depending on the risk you are planning to take, decide on mutual funds. That should make a good investment along with insurance
I will write more often on personal finance planning going forward… watch out!
That was very useful mohan. Please plan to write them soon. It will help me to plan my tax and investments better for this financial year.
Sure, point noted
Very helpful and informative post….we as a family have many insurance policies from LIC ,in fact we availed a loan too against one of it….i have a positive experience relating these.I appreciate this post a lot.Thanks Mohan.
Loan option is certainly a very good feature from LIC. Even I have a good experience with LIC so far. Thanks for sharing your thoughts.
What about tax from the returns at the end of 10 years or policy maturity tenure? Do we need to pay tax on the profit obtained after policy maturity?
Kishore, I just spoke to LIC business development manager. As per him, the premium paid for all LIC insurance policies qualify for tax rebate under section 80c. Also, as of now the returns from this policy does qualify tax excemptions. However, I couldn’t find this anywhere in their site describing the policy.
As the Basic Sum assured is 5 times of the premium, the premium paid for Jeevan Nischay policy is eligible under Sec 80C of I.T Act & Maturity amount is non taxable under sec 10(10D). After Health Plus issue , Now days we are not able to see any I.T sec in LIC’s website or its Ad.
Thanks for that info sundar. Even I was wondering why none of the insurance companies have been talking about tax benefit in their ads off late. Now I know the reason!
Can we take benefit of Income Tax under 80c in every year under this investment or in only first year i.e. 2009 for this policy as it closes on march 2010.
Its a Single premium policy, So you are going to claim the Tax benifit under sec 80C only for the financial year 2009-2010
For me it looks like an instrument to park the money here in LIC Nishchay instead of any FD. FD may give a bit lesser intrest and doesn’t have any insurance cover.. but here I think that is only for safe investors.
Some FDs does give you the flexibility to withdraw your money under specific circumstances. However, such an option ceases to exist for you here unless you opt for some kind of loan or surrender the policy. But that voids the whole purpose of investing in Jeevan Nischay altogether!
I read through the other comments on this article. Thanks for all that insight about Jeevan Nishchay. Even i am looking for financial planning articles on your blog.
You are most welcome!
great info!!
thank you Mohan..
You are most welcome
Dear Sir, I am willing to invest in Lic’s Jeevan Nischay policy but before that i wanted to confirm what type of tax benefit will we get under this plan. Please confirm on urgent basis.
Sunil, yes. There is a tax benefit, see details here – http://mohanb.....mment-5611
Also, I suggest you talk to the LIC folks to confirm the same before taking the policy.
thanks mohan
A warm welcome to you here!. I am glad it was useful to you.
How is this better than NSC ? As NSC matures in approx 6 years.
Also How is this policy better than Jeevan Astha ? Thanks in advance.
Satish, NSC does mature in 6 years and also the yield is very much the same as that of returns from Jeevan Nischay upon survival. However, the catch is in the form of Insurance throughout the policy period as well as 5 times the premium in 1st year of the policy. Like I have mentioned in my previous comments/other posts, if you are looking for investment, go for term insurance and and put your money in other investment modes. This policy is only for those who seek security of their principal and guaranteed returns with a bit of namesake insurance if you exclude 1st year coverage.
Jeevan Aastha was available for only 45 days from the launch date and it doesn’t exist if you plan to take a new policy now
… So, now it is only Jeevan Nischay until March 31st 2010.
Dear Mohan,
Thank you very much for clarifying.
Glad that I was able to bring in more clarity
Do you have any information about how much commission LIC Agent would get from selling of Jeevan Nischay Plan ?
I believe that as a move to implement transparent selling policy IRDA should consider advising all Insurance Companies to publish information regarding sales commission being paid by them to their agents on various policies, on their respective websites.
Meanwhile, specific info. as asked above on Jeevan Nischay would be useful.
Thanks and regards,
Sorry, I have no info on the commission aspect. Yes, I second your thought on the IRDA advisory on publishing such info.
2% of the premium
Thanks for that info Sundar.
I was wondering about the adv of NSC over LIC. Your reply to Satish answered my question. Thanks.
Nice post Mohan. Looking fwd to reading more on financial planning..
Thanks! sure, will post more on financial planning.
Regarding Jeevan Nischay, If i am investing for 5 years then, can i get Income tax Benefit under section 80c?.
Please reply through Email also. Thanks in advance.
Santosh, I have already answered that question – see more details here – http://mohanb.....mment-5522
Is jeevan nischay a good policy for tax benefit? I am planning for my tax savings. Can you help me plan it better?
Karthik, you will get the tax benefit under section 80C on the whole premium you pay towards this LIC jeevan nischay. But the kind of returns it provides is not very convincing. I have mentioned in one of the comment about the tax implications above. Please go through it.
Dear Karthik,
Just putting your money in a Tax Saving Scheme is not enough. You also need to consider whether the asset yields you good returns. Otherwise, what is the use of investing??.
Jeevan Nischay will not even cover your Inflation cost and you will be left with virtually NIL returns. Consider Mutual Funds’ ELSS schemes instead. You can visit my blog for more on these.
BEst of luck,
Srikanth matrubai
It is really informative and helpful. Can u please help me? At the age of 47 years which policy I should opt for? Jeevan Nischay or Jeevan Saral? I have already LIC policy cover of nearly 10.0 lakhs. Will it be beneficial to take policy in my name or in the name of dependent? Pls reply.
Thanks Anutosh. Well, before deciding on which policy, please convince yourself about what you are actually looking for. If your intent is pure insurance, then jeevan nischay isn’t for you. I would suggest you go for a term insurance. But if you are looking for some investment with minimal risk with namesake insurance plus guaranteed returns, then Jeevan nischay is for you.
Insurance is a basic need for everyone now. But you should take a call on what kind of insurance you need for yourself and your dependent. My suggestion is not to combine investment with insurance.
Dear Mohan,
Thanks for your reply. In fact I want to go for simply insurance for me and my dependents for life risk cover. Pls advise now.
Amar, you are most welcome. Term insurance suits the best at a very low premium for higher cover amount.
Dear anutosh,
It is always wise to first consider how much Insurance cover you need. If you need more cover, you can always consider Term Insurance. Why go for a policy which pays you ‘pittance’???
I am a housewife in mid forties. I have a LIC policy of Rs. 1.0 lakh. Can you advise which LIC policy I should opt for?
Sumita, that is a very generic misconception about insurance in India. You should look for how much cover you are getting for the kind of premium you are paying. Always try to get the best balance on these two. Otherwise, you will be paying high premiums for low cover. If insurance is your primary objective, go for term insurance.
I am a PSU employee aged around 46 years. I am paying premium of Rs. 7,000 p.m for different LIC policies e.g. money back, whole life, Jeevan Anand and Term insurance. Now I want to go for a new policy which will give me life cover as well as moderate investment. Which policy I should take Jivan Nischay or Jivan saral or any other. Pls guide as I am getting contradictory information from different agent.
If you are paying Rs.7000 per month, then it is obvious that you are already over insured. Why go for another Insurance policy???
Insurance is for security and NOT returns. Please understand this.
Amar, since you have so many policies already, I suggest you rework on the coverage you are looking for. Then go for one more insurance policy if it is really required. If you think you have enough insurance cover, then go for pure investment options. This way you get the best returns from your hard earned money. Simply parking money in various surplus insurance policies is not a good idea.
As per the present terms & condition of LIC, You can invest Rs. 1 Lakh – If you are having 10 lakhs Policy. So this product is for the existing policy holders.
LIC may want to study the claim ratio from its Jeevan astha. (Even one year not completed) Hence they may safely, put this condition.
thanks for that insight Sundar. I wasn’t aware of such a clause to avail this new jeevan nischay policy. All I thought was to have a pre-existing policy with LIC.
Mr.Mohan – Pls tell me how can i see my lic policy status in internet? I am from kerala & working in malaysia. All my premium paid by bank.
Please login to lic’s website – licindia.com, link your policy online and view the details.
Thanks Mr Mohan for information you are sharing with people.
I think jeevan nichshay should be ok if somebody has not planned (tax/investments) and if s/he want to do some safe investment before 31st march. otherwise there are lot of options like insurance policies, nsc,ppf,kvp, etc, etc…and one need to plan properly for that. I think Jeevan Mitra Triple Cover From LIC of INDIA will be good solution as this policy provides High Cover and Moderate returns Also, for those who dont want to take risk and put their money in safe company. This policy from LIC is Combo of TERM Plan + ENDONMENT Plan.
Dear Mr. Bhosale, thanks for your encouraging comments and your thoughts on insurance in India.
Isn’t 10 years a too long period for just 60% returns on your one time investment? I am not convinced with this policy.
Like I have mentioned in comments, it depends on your priorities and the risk you wish to abide by. This is a safe return plan with minimal insurance.
My age is 41 years, if I invest Rs. 50000/- in this product for five years, what will be the maturity amount?
Sandeep, i don’t have the returns table for this plan. Please check with any LIC agent about the same and they should be able to help you with that.
My comments would appear harsh but these are my observations of LIC’s sales pattern in the last 50 yrs.
I would like to comment on the Loan facility offered by LIC. I think loan facility is another tool by LIC to mint money. First of all they offer you max 5-6% returns per annum on the products(endowment and Money back) sold by them and a minuscle coverage on the same. And to add to the undercoverage, they charge heavy interest on the amount that is our own.
It is a sad fact of Indian insurable population that most of the Indians who have opted from plans from LIC are underinsured and It is the so called govt represented company which is supposed to be “for the people” organization, has minted money to become the largest investor in various companies. They never promoted the term plans. They focussed purely on endowments and money back policies and our people trusted in such a company which has looted Indians for over 5 decades. Our people are more than happy to get 60%-70% more after 10 long yrs. Simple Formula which can work as a replacement for the endowments and money back policies of the world:
If you have one lac to invest, u get 5 lacs in the above mentioned plan
A more prudent formula:
1. Buy a Term Plan – a 30 yr old will get 10 lacs cover for approx 3k or less(approx premium,pl check with ur advisor). Always get yourself financially analysed from a certified advisor.
2. of the remaining amount, invest 50% in Safe investments like FD’s of pvt lenders like L&T,TATA etc which give you more returns than bank FD’s. These are approved by SEBI and are large institutions,so no question of frauds.
3. Invest 25% in Equities.Invest,dont trade.Buy only when others do panic sell i.e. when mkts fall.
4. Invest 15% in Gold ETFs.- Also have diverse investments.
5. Invest in Health policies/mediclaims. Dont forget to insure your house and household items including jewellary. Dont forget to donate some money to the needy.
LIFE IS EXTREMELY UNCERTAIN, but proper planning will yield you great returns. Last point: Think well,take time, do a thorough comparison with many companies available in the industry. Dont trust your agent blindly. even if he is your close relative.Remember investment,esp, insurance investment is a long term proposal. even if u save Rs.100 p.a. you save lot of money. Its your hard earned money, dont fall in the tricks of companies.
Happy Investing…..
Hi Jayant, welcome back after a long break! Your comment speaks off the knowledge you have. Look forward to see you more frequently here going forward!
Great comments, Jayant Bhat. Can’t agree more.
Dear Sir,
Please clarify if I Pay premium Rs. 25000.00 for this policy for five years plan then what maturity value should I got, Presently iam in age at 50 (05.09.1959)
Amount of Sum Insured and can I opt for prematured payment or what is banefit in case of Death. Your early reply shall be highly thankful.
Dear Kakani, please refer to the illustration image attached in the above article, which gives you a good indication on your query related to benefits in case of death as well as maturity. For exact amounts, please get in touch with any LIC agent near your locality.
you are unfortunately not eligible for this scheme as upper age limit is 50 years
@Jayant Bhat
we need to understand the mentality of indian people also, they are happy with 5-6% returns. here people are interested in getting back some portion of agent commission instead of finding a good agent who has a through knowledge. and instead of paying a fee to Financial Advisor they will find some relative / friend agent who parts commission with them.
In your reply you have written about LIC, but all other private companies are also doing the same thing. Insurance companies avoid selling TERM plans, even they try to hide from customers that there is such a product called TERM plan.
Dear Mr. Bhosale,
I agree with you that even other insurance companies are following suit. But all this has been imbibed by the grand-dada of Insurance Industry. It is LIC who has taught people to be content with 5-6%. Since LIC has govt backing, People blindly followed it as per typical herd mentality.
With the advent of Private Insurance Companies, even LIC was forced to get into competition and come out with good products like ULIPs etc. But they are by nature not willing to come out of gross profit making mentality and hence have again started promoting traditional Products. In one my articles on this blog, I’ve clearly highlighted the mis-selling done by majority of agents from Private Insurance Sector.
I’ve seen many TV programmes where CEOs and representatives of Pvt Insurance Cos coming forth to promote term plans and then Investment plans according to the needs of the customer. But LIC has never ever promoted the need for Life Cover.
I am more of a portfolio advisor and I’ve corporate agencies of top 11 companies including LIC and my opinion will never be biased towards Pvt Cos or LIC. Since this topic was specifically related to LIC’s products, I mentioned about LIC. But I agree to your point on the larger front.
I have a specific mission in my life and that is to the educate people to opt for right mix of products alongwith my business.
@Jayanth,
You mentioned that:
“With the advent of Private Insurance Companies, even LIC was forced to get into competition and come out with good products like ULIPs etc”
LIC pushed ULIP policies like MoneyPlus misguiding the investors about it’s astronomical returns. ULIP products itself are bad and LIC just made a killing out of it along with its agents. Other insurance companies are just following the same.
Dear Mr. Govardhan,
LIC or for that matter, any other insurance company has never promised astronomical returns on ULIPs. There is no guarantee on performance of ULIPs as it purely speculative and market linked. ULIPs are not bad at all, but for all those who have invested in the last 4 yrs in ULIPs have gone through their good and bad experiences, thanks to the agents. MArket Plus is a good product like any other ULIP. Actually, my analysis about the misselling is as follows:
Till the time ULIPs were introduced in our market, there was only LIC and it was promoting long tenured products & they were typically endowments. With the advent of ULIPs, Agents saw this as a fast money making tool. ULIPs have to be sold to those who have a bit longer vision but not as long as endowments. i.e. if tenure in endowment is 20 yrs,then ULIPs ideal tenure should be 10 yrs.
These agents mis-sold and told the customers that they ve to pay only for 3 yrs and they themselves were not aware of the technicalities about the amount that the customers would get withdrawal.
And for those who have a long tenure vision,should not worry about market conditions and remain invested. At the end of say,10 yrs, they would definitely sit a bigger corpus.
What generally happens is when market slides down, people often panic and start thinking that their money would be lost,but they forget that markets recover with a much faster pace in a growing economy and we have seen proof of the same.
Infact, what I recommend people is to invest money when markets start sliding down. you get more units. people generally buy mkts are at their peak and then once mkts start coming down, they scream that they have been duped by investing companies. In the long run, ULIPs will give better return that all other insurance products or mutual funds.
I always keep on suggesting that it needs a great and deep thought to invest in insurance products. First priority at younger age is to get yourself a term policy, then ULIPs. Endowment and Money Backs are a strict no no from my end. At older age, the need for term insurance is minimal,so more focus should be on building the already built corpus from younger age.
Instead of Endowment, I would always prefer combination of Term Plan+Mutual Funds or Term Plan+Equity or Gold ETF Investments or Term Plan+FDs. ULIPs can work out as term plans too when the coverage is increased. Maybe at a later stage, I would write an article on how ULIPs can work out Term Plan+Endowment+FDs etc.
Let it be any product, while selling those products executives/agents from companies try to hide the basic and relevent information related to those products. They force people with figures and features which are not available in their own brochure also. Last week i got one mail from a leading private insurance company with some ULIP plan attached to it. I replied to it with some doubts of mine and i got immediate reply also. The figures given in the reply were not matching with the presentation itself. I again replyed to him with some calculations and pointed how did he arrived those figures in his mail. I got the reply… “My computer had some problem so by mistake it was WRITTEN like that…”
well said, I completely agree with you. Even I had such issues with few agents in the past. Unfortunately, computers don’t make mistakes like humans do.. computers are just “Garbage in – Garbage out”
i am very sorry about jayant bhat`s poor knowledge in insurance. he is not aware of the investment pattern of life insurers guarded by irda
Dear Sir,
Might be I am ignorant of laws. Request you to enlighten me on the same. This is blog is not all about blame game. It is to enlighten co-readers.
Thanks Mr. Mohan for all the information you are sharing. I would like to know which product is better LIC Jeewan Saral or Bajaj Allianz Invest Plus from safe investment and return point of view.
Sr. Branch Manager from one of bajaj Allianz branch explained returns from Invest plus for a aperiod of 20 years would be more than 8% since they are going to refund amount deducted from each premium for life insurance(at the time of maturity) along with assured loyalty addition of 10% from 11th Year.
Hi Harsh, I haven’t looked at Bajaj Allianz Invest Plus plan yet.
sir, can i invest 10000 in jeevan nischaya but i have only one previous policy which SA is only 50000.
with regards, ravindra kumar
Hi Ravi, yes. I don’t see any issues in your case as you already have a policy from LIC.
Hi Mohan, I have gone through the blog… What I understood is that rate of return is 5.45%+ loyalty bonus. So what would be the tentative total return as per your opinion. I excluded the insurace story for the time being. Is that better of option than F.D in respect of return and liquidity?
Raju, rate of return in FD would start at 7.5%. If you are a senior citizen, the rate would be a bit higher. Not sure how you came up with 5.45% as the return rate for Jeevan Nischay. The only advantage with jeevan nischay is that you have a little bit of insurance cover plus the returns are tax free! If insurance is not your priority, I suggest you go for FD than jeevan nischay.
How about ELSS? Somehow I am not getting convinced with the policies by LIC off late. Can someone help me find out the best way to invest thru ELSS?
ELSS is the best avenue for your Tax Saving Amount. They not only have lesser lock-in period but have consistently beater all other forms of Tax Schemes in terms of returns. you can visit my blog http://goodfu.....ogspot.com for more on ELSS.
Best of luck,
Srikanth Matrubai
Hi, i m interested to take jivan saral to save yearly tax at the end of year. I have asked one of the agent Lic about premium.She told me that if i will pay 32,000/annum than after 15 year will get 13 lakh and 36,000@annum than will get 17,lakh and on 48,000 premium will be able to get 26lakh amount, is it true or shall i get any proof of it ,
Hi Anil, I am not sure about the kind of returns you have been told. But my strong suggestion is never buy policies just for saving some tax. Please read my new articles on tax planning form home page or under finance section. Do a good study of your existing investments and how much more you need to plan for. Don’t simply go by whatever the agents say. Visit their site and understand it better before you start putting in so much of money as premium on a yearly basis.
i already invested 40k in NSC and looking for further investment in lic.
It helps me lot. thanks alot.
is there any other new fixed payment policies for 2010.
Lic used introduce new policies on every jan month of the year,
if not yet is there any guess it will come jan end.
please let me know and also any other investments if there.
THANKS ALOT MOHAN.
Hi,
May i know what is scenario-1 and scenario-2
if i invest 50000/- in jeevan nichay for 7 year how much return after 7 years
please tell me
Please check with LIC agents, they will be able to provide the right numbers.
i want to know about HDFC savings assurance plan HDFC Standerd Life Insurance. Please let me know the plus and minus points of this plan.Thank You.
Hi Urvish, I haven’t looked at that plan. I will write an article when I go through that product.
hi Mohan,
I am surya from hyderabad. Please suggest me good investment plans.
and is any article abour LIC jeevan anand for investment and insurance.
regards
surya
Hi Surya, I haven’t written an article on Jeevan Anand. Like I have mentioned in most of the articles, don’t mix up insurance and investment. They are two different things to serve different purposes. Please read through finance related articles on this blog to plan your investments.
Hi Mohan,
I am really impressed with your genuine adise on this website, Good going. Keep it up.
Also I wanted to know, which terme insurance policy due you think is the best, as in terms of service, payments etc…
Look forward to your suggestion.
Regards
Arup
Thanks for your kind words. Each provider has their own pros and cons towards Term Insurance. I suggest you compare few products and then finalize the one you want to go ahead with.
If you compute the rate of return compounded for 5 year jeevan nischay it comes to hardly 4.3%. What is so great about this policy other than getting insurance?
That is the whole point I have conveyed there
Hi Mohan,
I found this site while googling. I’m happy I learnt that I should explore Term plans for insuring myself. I was searching for a plan that might help me plan for my daughter’s education too. Kindly give any suggestions. I’m willing to invest upto 1 lakh/p.a.
Thank You.
Hi Prasanna, thanks for visiting my blog and even much happier that people are getting benefited from this blog. Well, if there is any insurance again which has ‘kids’, ‘children’ etc., you can reject it out right! More details on this available on various posts on this blog. Since you are looking to invest significant amount, I suggest you take the help of professional financial advisors to plan your finance better.