LIC’s Nav Jeevan offers good insurance cover, tax benefits with options to pay single or limited premium

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Updated: July 15, 2019 12:37:45 PM

LIC’s Nav Jeevan plan is a non-linked with profit endowment assurance plan, with the options to pay either single premium or limited premium for 5 years.

Life Insurance Corporation of India, LIC of India, LIC policy, LIC's Nav Jeevan Plan, Single Premium Plan, Limited Premium Plan, risk cover, Sum Assured, maturity benefits, death claimWhile the Minimum Sum Assured under Nav Jeevan plan is Rs 1,00,000, there is no limit of Maximum Sum Assured and an individual may take cover according to his/her age and level of income.

Life Insurance Corporation (LIC) of India’s Nav Jeevan plan is a non-linked with profit endowment assurance plan, with the options to pay either single premium or limited premium for 5 years. The plan is available for individuals from the age of 90 days (completed) under Single Premium Option, while for there limited premium, there are two options – 90 days (completed) under Limited Premium under Option-1 and 45 years (nearer birthday) under Limited Premium under Option-2.

The Maximum Entry Age is 44 years (nearer birthday) under Single Premium Option, 60 years (completed) under Limited Premium under Option-1 and 65 years (nearest birthday) under Limited Premium under Option-2.

The policy term under this plan varies from 10 years to 18 years and the Maximum Maturity Age is 62 years (nearer birthday) under Single Premium Option, 75 years (completed) under Limited Premium under Option-1 and 80 years (nearest birthday) under Limited Premium under Option-2.

While the Minimum Sum Assured under Nav Jeevan plan is Rs 1,00,000, there is no limit of Maximum Sum Assured and an individual may take cover according to his/her eligibility, which depends upon age and income level.

While, on survival, the policy holder will get Basic Sum Assured (BSA) and Loyalty Addition (LA), if any, the insurance money to be paid on death are listed below.

On Death: Death during 5 yrs (Before the date of commencement of risk): Refund of premium(s) paid without interest shall be payable. The Premium(s) referred above shall not include any taxes, extra amount paid due to underwriting decision and rider premium(s) if any.

Death during 5 yrs (after the date of commencement of risk): Sum Assured (SA) on Death shall be payable.

Death after 5 yrs : SA on Death + LA

The SA on Death under Single Premium will be Basic Sum Assured (BSA) or 10 times Tabular Single Premium for the chosen Basic Sum Assured.

SA on Death under Limited Premium Option-1 will be BSA or 10 times Annualised Premium for the chosen Basic Sum Assured.

While, the SA on Death for Limited Premium Option-2 will be BSA or 7 times Annualised Premium for the chosen Basic Sum Assured.

As the risk cover or Death Sum Assured is 10 times or more than the single premium or the annualised limite limited premium, income tax benefits under sections 80C and 10.10(D) will also be available.

Along with insurance and tax benefits, the maturity returns on Rs 10 lakh policy under the single premium option vary from over 6.5 per cent (for a 8-year old child opting for a term of 10 years) to about 3 per cent (for a 44-year old person opting for a term of 10 years). However, the insurance cover will be around 10 times the amount of single premium, even as the maturity benefit hovers around 3-6.5 per cent per annum over the premium amount.

In case of Limited Premium Option 1, the maturity returns on Rs 10 lakh policy vary from 5.44 per cent (for a 8-year old child opting for a term of 10 years) to about 4.73 per cent (for a 44-year old person opting for a term of 10 years).

Similarly, in case of Limited Premium Option 2, the maturity returns on Rs 10 lakh policy vary from 5.05 per cent (for a 45-year old child opting for a term of 10 years) to about 3.21 per cent (for a 65-year old person opting for a term of 10 years).

So, by proposing insurance for his/her minor child along with 80C benefit for himself/herself, a taxpayer may avail handsome returns and that too with sovereign guarantee.

Otherwise, 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 by choosing the Single Premium Option to insure his/her own life or by paying premium for just 5 years may enjoy life cover ranging from 10 to 18 years.

Also, under Single Premium option, loan facility is available under this plan just after completion of 3 months from issuance of the policy, while the facility is available after 2 years from the date of issuance of a policy under Limited Premium Options.

Policies may also be surrendered any time under Single Premium Option and after completion of 2 years from the date of issuance of a policy under Limited Premium Options.

Proposers may opt for Accidental Death and Disability Benefit Rider under the Limited Premium Options, but up to the age 70 years only.

(Disclaimer: This is for you information only and not an investment advice. Please consult your financial advisor before investing in any plan)

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