LIC’s Jeevan Shiromani
Only plan where Bonus rates are Guaranteed For Whole Policy Term.
For first 5 years Guaranteed Additions in LIC Jeevan Shiromani will be at Rs. 50 per Rs.1,000 Sum Assured and from 6th year onward it will be Rs. 55 per Rs.1,000 Sum Assured every year.
LIC’s Jeevan Shiromani
LIC’s Jeevan Shiromani is a non-linked money back plan that was launched by LIC on 19th December 2017. Basically, it is an efficient insurance plan that provides life protection as well as promotes savings. This plan is typically designed for High Net worth individuals. LIC’s Jeevan Shiromani plan offers pay-outs at regular terms, life coverage as well as a lump sum amount as a maturity benefit. It provides a cover for critical illnesses and also includes three optional riders.
LIC’s Jeevan Shiromani plan will provide support, stability and financial security to your family, when you die. It will give them the financial backbone they will need after such a tragic loss to them. Apart from this, LIC’s Jeevan Shiromani will also reap you many other benefits. As a policy holder, you will receive timely payments while the policy is in force and also receive a lump sum amount on maturity. If you happen to be diagnosed with any of the critical illnesses mentioned under this plan, you have an alternative of a lump sum that will be equivalent to 10% of the sum assured that was chosen initially through the in-built critical illness benefit.
Key Features of LIC Jeevan Shiromani
- Receive paid up as soon as you complete paying one full year’s premium of the policy.
- Surrender the same after completing one year of the plan.
- Pay premium yearly, half-yearly, quarterly and monthly.
- Loan benefits after just a year of the policy.
- Inbuilt critical illness rider.
- Additional riders- Accidental death and disability benefit rider, Accident benefit rider and New term assurance rider.
- You can choose 3 riders maximum.
LIC Jeevan Shiromani- Benefits
1. Death benefits
- If the policy holder dies during the first five years of the policy, then accrued guaranteed addition along with sum assured will be paid.
- If the policy holder dies after completing 5 years but before the maturity date of the policy, then accrued guaranteed addition, sum assured and loyalty additions are paid.
- Sum assured on death (amount payable is higher of)
- 10 times of your annual premium
- 105% of premiums paid till date
- 125% of basic sum assured
2. Survival benefits: If the policy holder survives for the entire policy term and all the premiums are paid, a fixed percentage of sum assured amount will be paid. The fixed percentage for various policy terms are as follows:
- For a policy term of 14 years, 30% of the sum assured on both, the 10th and 12th policy anniversary.
- For a policy term of 16 years, 35% of the sum assured on both, the 12th and 14th policy anniversary.
- For a policy term of 18 years, 40% of the sum assured on each, the 14th and the 16th policy anniversary.
- For a policy term of 20 years, 45% of the sum assured on each, the 16th and the 18th policy anniversary.
3. Maturity benefit: If the policy holder survives for the entire term of the policy and all premiums have been duly paid, he will receive sum assured on maturity, along with accrued guaranteed additions and loyalty additions (if any). Sum assured on maturity is under:
- For a policy term of 14 years, 40% of sum assured.
- For a policy term of 16 years, 30% of sum assured.
- For a policy term of 18 years, 20% of sum assured.
- For a policy term of 20 years, 10% of sum assured.
4. Inbuilt Critical Illness: The policy holder will be entitled to the following benefits, if he or she is diagnosed with any of the fifteen critical illnesses and if the policy is in effect at the time of diagnostics along with due premiums paid:
- Lump sum: Inbuilt critical illness rider benefit is equivalent to 10% of the sum assured. This will be paid only if the claim is permitted.
- Alternative to postpone the premium payment: The policy holder gets this option wherein premiums are postponed for a period of two years from the date of admission of the Critical Illness claim.
- Medical second opinion: The policyholder can take Medical Second Opinion. This can be done either through the available healthcare providers, internationally or through reputed hospitals in India or through specialist doctors available in different places depending on the arrangement in this regard by the Corporation.
List of critical illnesses covered under LIC’s Jeevan Shiromani plan:
- Cancer of particular severity
- Cancer of particular severity
- Benign brain tumor
- Third degree burns
- Open heart replacement or repair of heart valves
- Blindness
- Primary pulmonary hypertension
- Alzheimer's disease or dementia
- Multiple sclerosis with persisting symptoms
- Aortic surgery
- Stroke that results in permanent symptoms
- Permanent paralysis of limbs
- Major organ or bone marrow transplant (as recipient)
- Myocardial infarction
- Regular dialysis due to kidney failure.
Eligibility Criteria for LIC Jeevan Shiromani
- Age: Minimum 18 years of age and maximum 55 years depending upon the policy term.
- Policy term: 14, 16, 18 and 20 years.
- Term of premium payment: Policy term- 4 years.
- Modes of premium payment: Monthly, quarterly, semi-annually and annually.
- Sum assured: Minimum sum assured is Rs. 1 crore and maximum has no limit.
- Maturity age: Minimum 18 years and maximum 69 years.
Exclusions in LIC’s Jeevan Shiromani Plan
- If the policy holder commits suicide within 12 months of the inception of the policy being in effect, the company will not provide any claim. Only 80% of the premiums will be payable.
- If the life insured commits suicide within 12 months from the date of renewal, an amount higher than 80% of the premiums paid until the death date or surrender value as on that day will be payable.
Returns we can expect from LIC Jeevan Shiromani 847
Suppose Mrs. Sita who is 30 years of age and she has chosen the term insurance policy of 20 years for Rs. 1 crore LIC Jeevan Shiromani plan. Mrs. Sita will have to pay premiums until 16 years only. Also, on the 16th and 18th year she will receive a survival benefit of Rs. 45 lakh. On maturity of the policy, Mrs. Sita will receive the balance 10% of the sum assured plus accrued guaranteed plus loyalty additions. This is done assuming the loyalty additions rate as Rs. 200 per Rs. 1000 sum assured. However, in all of this it is prominent that the returns made on this investment is 5%.
Loan Facility in LIC Jeevan Shiromani
If the policy has got a surrender value and correlates with the terms and conditions as per the corporation from time to time, a loan can be availed during the particular policy term. For all the loans granted in 2017-2018 financial year, the interest rate applied is 9.5% per annum. This is to be paid semi-annually for the whole term of the loan. However, the interest rate that is to be applied for policy loans and full term loans is decided periodically.
According to surrender value percentage, the maximum loan will be until 90% for policies that are in effect and up to 80% for policies that are paid-up.
If there is any loan amount or interest pending, it gets cleared through survival benefits or claim amount.
FAQs on LIC Jeevan Shiromani
A few important reasons why you should buy LIC Jeevan Shiromani are as follows:
- Tax benefits and deductions under section 80C and section 10 (10D) of the Income Tax Act, 1961.
- Very high sum assured
- Tax refunds
- Greater accrued amount
- Higher returns on maturity
Who should buy LIC Jeevan Shiromani plan?
High Net worth individuals that are seeking liquidity through loan service, sole earners who want to secure their families in cases something happens to them and people wanting effective secure returns are best suited to buy a LIC Jeevan Shiromani plan.
Which is the most significant feature of LIC Jeevan Shiromani plan?
This policy comes with a premium holiday of 4 years for all policy terms. This means that the policy will still continue for an extra 6 to 9 years even after premiums have been ceased.
What kind of plan is LIC Jeevan Shiromani plan?
LIC Jeevan Shiromani plan is a pure traditional money back plan. It is non-linked and is a with-profit partaking plan.
What is the minimum and maximum term of policy?
The least policy term is of 14 years whereas the highest term of policy is 20 years.
What are the advantages of purchasing a LIC Jeevan Shiromani plan?
First and foremost, this plan has guaranteed additions of 5% and 5.5%, for the initial five years and the remaining term respectively. The plan becomes paid-up as soon as one year of the policy being in effect is completed. Lastly, this plans consists of an inherent critical illness coverage. These are all the key advantages you will receive if you purchase a LIC Jeevan Shiromani plan.
In conclusion, even though the characteristics of this plan may seem attractive, you must really consider what you are really seeking for in an insurance plan. LIC Jeevan Shiromani plans are extremely beneficial but highly expensive too. Therefore, it is more suitable to high net worth individuals who earn more than 20 lakhs a year. Comparatively, the returns seem lower in this plan as well as the sum assured begins from Rs. 1 crore, which is quite high. Not everyone can afford this plan. However, they have exceptional advantages to people that can afford it.
