For the first time, the Life Insurance Corporation (LIC) of India has introduced an endowment insurance plan that has options of paying both regular and single premium to help individuals looking to make last-minute tax-saving investments.
Usually, LIC of India launches limited-period single premium plans at the fag end of financial years, but on the contrary, Navjeevan is a regular plan, which is going to stay.
While making investments in a hurry, tax payers favour single-premium plans over regular-premium ones to avoid creating obligation to pay premiums every year.
Like other limited period plans, LIC’s Navjeevan also provides people opportunity to pay single premium and get at least 10 times the sum assured to avail deductions u/s 80C up to Rs 1,50,000 from the taxable income. Along with single premium, the newly-launched plan also provides the option to pay premium over a period of five years like other conventional limited-premium endowment assurance plans.
LIC’s Navjeevan plan is a non-linked with profit endowment assurance plan, which is available for individuals from the age of 90 days (completed) to as high as 65 years. The plan is not market-linked and the insured persons are eligible to get part of profit earned by the Corporation in the form of Bonus.
However, the single premium option is available to persons between 90 days (completed) and 44 years (nearer birthday) of age.
Along with insurance benefits, the maturity returns under the single premium option vary from about 3 per cent (for a 44-year old person opting for a term of 10 years) to over 6.5 per cent (for a 8-year old child opting for a term of 10 years).
So, a taxpayer may avail handsome returns and that too with sovereign guarantee, by proposing insurance for his/her minor child along with 80C benefit for himself/herself.
Otherwise, by choosing the single-premium option to insure his/her own life, along with the 80C benefit, a taxpayer may avail insurance cover for the opted term (from 10 to 18 years) without any chance of getting it lapsed due to non payment of subsequent premiums on time.
Moreover, under single premium option, loan facility is available under this plan just after completion of 3 months from issuance of the policy.