Jeevan Utsav is a non-linked and non-participating whole life insurance plan from Life Insurance Corporation of India. It offers lifetime income for the policyholders after the selected accumulation period. The main attraction of this plan is its limited premium paying term. Premium paying terms of LIC’s Jeevan Utsav plan ranged between 5 to 16 years. The minimum age for taking this plan is 90 days and the maximum is 65 years. So, it benefits persons of all age groups, from kids to seniors.
Another key benefit of Jeevan Utsav is its guaranteed additions. Guaranteed Addition is a predefined bonus that is added to the policy every year during the premium paying term. Therefore, the returns on Jeevan Utsav policy are not affected by the ups and downs in LIC’s future performance. Like any other life insurance plan, this plan also provides life coverage for the policyholder. Jeevan Utsav plan also meets the requirements of both insurance and pension needs, throughout the policy term. This plan is beneficial for all individuals, particularly those without a steady retirement income.
Key features of LIC’s Jeevan Utsav
- Limited premium payment term of 5 to 16 years (based on age at entry).
- Guaranteed income for the whole life after the accumulation period.
- Option to choose ‘Flexi Income Benefit’, on income that starts after the accumulation period.
- Lifelong insurance coverage.
- Highly beneficial individuals without a retirement income.
- Available for purchase on behalf of children.
- Option to add Premium Waiver Benefit.
- Loan facility.
- Option to surrender during the premium paying term or after the accumulation period.
- Option to receive death benefits in instalments.
- Tax benefits for premiums as per Sec. 80C of the Indian Income Tax Act.
- Tax benefits for returns as per Sec. 10(10D) of the Indian Income Tax Act.
LIC’s Jeevan Utsav Eligibility and Conditions
| Condition | Minimum | Maximum |
| Age at entry | 90 days | 65 years (nearer birthday) |
| Premium paying term | 5 years | 16 years |
| Accumulation Period | 10 years | 18 years |
| Sum Assured | 5 lakhs | No limits |
Benefits payable under LIC’s Jeevan Utsav in different circumstances are as follows.
| Benefits | Amount Payable |
| Survival Benefit | Option 1: On completion of the accumulation period, the policyholder will get 10% of the sum assured per annum up to the age of 100 years. Option 2: The policyholder can choose Flexi Income Benefit. |
| Death Benefit (Any time during the policy term) | The nominee is entitled to receive the highest value of the following. a) Basic Sum Assured plus accrued guaranteed addition. b) 7 times the annualised premium. c) 105% of the total premium paid. |
| Accidental Death of the policyholder (Applicable up to the age of 70, if AB rider opted) | The nominee is entitled to receive the following benefits: a)Sum assured of Accidental Benefit along with guaranteed death benefit. |
| Disability Of the policyholder (Applicable up to the age of 70, if ADDB rider opted) | The Policyholder is entitled to receive the following benefits: a). Waiver of future premium b). Fixed monthly income for 10 years from the date of disability. c). Lifelong annual income of 10% of the sum assured, payable after the accumulation period. |
Flexi Income Benefit
The Jeevan Utsav plan offers a valuable option that allows policyholders to retain the income amount that commences after the accumulation period with LIC. The retained amount earns an annual interest rate of 5.5%, compounded yearly. Policyholders can withdraw up to 75% of the accumulated amount annually during the policy term, with a maximum of one withdrawal per year. The remaining 25% continues to accrue interest, ensuring ongoing growth.
Guaranteed Addition
Unlike other traditional life insurance plans, the Jeevan Utsav plan offers guaranteed additions as returns, providing a secure and predictable benefit to policyholders. A Guaranteed Addition of Rs. 40 per Rs. 1,000 of the Basic Sum Assured will be added to the policy each year during the premium paying term.
Riders available with LIC’s Jeevan Utsav
Policyholders can choose the following additional riders to enhance their Jeevan Utsav plan.
1. LIC’s Accident Benefit rider.
Enhances the basic sum assured, if the policyholder dies in an accident.
2. LIC’s Accidental Death and Disability Benefit rider.
Enhances the basic sum assured, if the policyholder dies in an accident. Additionally, a predefined monthly payout for 10 years from the date of disability and future premiums will be waived.
3. LIC’s Term rider.
Enhances the insurance coverage with a nominal premium.
4. LIC’s Critical Illness rider.
Provides benefits on diagnosing specified critical illnesses.
5. LIC’s Premium Waiver Benefit rider (for minor lives).
Waives premiums to be payable, in case of proposer’s (person who is obliged to pay premiums on behalf of minor) death during the premium paying term.
Sample Presentation of Jeevan Utsav Plan
| Parameters | Accumulation Term | |||
| 10 years | 10 years | 15 years | 18 years | |
| Age | 35 | 35 | 35 | 35 |
| Premium | 2,02,365 | 2,03,312 | 2,02,540 | 2,01,110 |
| Sum Assured | 9,00,000 | 12,50,000 | 26,00,000 | 34,00,000 |
| ADDB Sum Assured | 9,00,000 | 12,50,000 | 26,00,000 | 34,00,000 |
| Paying Term | 5 years | 7 years | 13 years | 16 years |
| Deferment Period | 5 years | 3 years | 2 years | 2 years |
| Income starting age | 45 | 45 | 50 | 53 |
| Annual Income after the accumulation period | 90,000 | 1,25,000 | 26,00,000 | 3,40,000 |
Sample Benefit Illustration of LIC’s Jeevan Utsav
Mr. Kiran has chosen to invest in LIC’s Jeevan Utsav plan, with the following details:
Let’s outline how the policy will work in Mr. Kiran’s case.
| Age | 35 years | |
| Policy Term | 18 years | |
| Premium Paying Term | 16 years | |
| Sum Assured | 30 Lakhs | |
| Annual Income From the age of 53 | ₹ 3,00,000/- | |
| Riders Opted | Accidental death and disability rider | |
| Premium (includes GST) YLY – Yearly HLY – Half yearly QLY – Qurterly MLY – Monthly | First Year | From Second Year |
| YLY ₹ 1,85,435/- HLY ₹ 94,378/- QLY ₹ 47,545/- MLY ₹ 15,967/- | YLY ₹ 1,81,443/- HLY ₹ 92,346/- QLY ₹ 46,522/- MLY ₹ 15,623/- | |
Benefits Payable in Different Scenarios: –
Scenario 1: Survival Benefit
If Mr. Kiran survives the accumulation period (18 years), he will receive an income of ₹3,00,000 that starts at the age of 53 and continues till his death. Additionally, he will get a sum of ₹49,20,000 upon attaining the age of 100.
Scenario 2: Normal Death
A) During the premium paying term
If Mr. Kiran passes away on the fifth policy year from the policy commencement date, his beneficiary will get
Immediate payment of ₹36,00,000.
B) After the premium paying term
Immediate payment of ₹49,60,000
Scenario 3: Accidental Death
A) During the premium paying term
If Mr. Kiran dies due to an accident on the fifth policy year from the policy commencement date, his beneficiary will get
- Immediate payment of ₹66,00,000.
B) After the premium paying term
- Immediate payment of ₹79,20,000
Scenario 4: Accidental Disability
If Mr. Kiran becomes disabled due to an accident on the fifth policy year from the policy commencement date, he is eligible to get the following benefits
- Monthly income of ₹25,000 for 10 years.
- All future premiums will be waived.
- Annual income @ ₹3,00,000 will start from the age of 53.
- Sum of ₹49,20,000 upon attaining the age 100
Sample Benefit Illustration of LIC’s Jeevan Utsav (Minor Lives)
Mr. Kiran has chosen to invest in LIC’s Jeevan Utsav plan for his son Sooraj, with the following details
Let’s outline how the policy will work in this case
| Age | 2 years | |
| Proposer’s Age | 35 years | |
| Policy Term | 18 years | |
| Premium Paying Term | 16 years | |
| Sum Assured | 30 Lakhs | |
| Annual Income From the age of 53 | ₹ 3,00,000/- | |
| Riders Opted | Premium waiver benefit rider. | |
| Premium (includes GST) YLY – Yearly HLY – Half yearly QLY – Qurterly MLY – Monthly | First Year | From Second Year |
| YLY ₹ 1,83,303/- HLY ₹ 93,364/- QLY ₹ 47,057/- MLY ₹ 15,807/- | YLY ₹ 1,79,357/- HLY ₹ 91,354/- QLY ₹ 46,044/- MLY ₹ 15,466/- | |
Benefits Payable in Different Scenarios: –
Scenario 1: Survival Benefit
If Mr. Sooraj (Policyholder) survives the accumulation period (18 years), he will receive an income of ₹3,00,000 that starts at the age of 53 and continues till his death. Additionally, he will get a sum of ₹49,20,000 upon attaining the age of 100.
Scenario 2: Death Benefit
A) During the premium paying term
If Mr. Sooraj (Policyholder) passes away in the fifth year from the date of commencement, his beneficiary will get
- Immediate payment of ₹36,00,000.
B) After the premium paying term
- Immediate payment of ₹49,60,000.
Scenario 3: Premium Waiver Benefit
If Mr. Kiran (Proposer) dies after five years from the policy commencement date
- All future premiums will be waived, and the policy will continue with all its predefined benefits intact and vest to Mr. Sooraj.
Advantages and disadvantages of LIC’s Jeevan Utsav plan
Advantages:
- Satisfies both insurance and retirement requirements.
- The option to buy on minor lives is a great aspect.
- Good life coverage at a reasonable premium cost.
- The Flexi Income Benefit option is highly beneficial.
- The plan’s short premium paying term is attractive as it allows for earlier completion of payments.
- The option to add riders, especially the Premium Waiver Benefit, is a good feature.
- The plan’s lifelong income feature stands out, as most similar plans from other insurers only provide income for a fixed term.
- Government guarantee for premiums and declared bonuses, which is quite comforting
- Loan and surrender option adds flexibility.
Disadvantages
- The guaranteed addition is an attractive feature, however, it’s only accrued during the premium payment period.
- The guaranteed addition rate is slightly lower than the bonus rate offered by LIC’s endowment plans
- Early surrender may attract financial loss.
- AB and ADDB riders are not available for minor lives.
Conclusion
LIC’s Jeevan Utsav is a beneficial plan suitable for any age group. Its main attraction is the lifelong income benefit it offers. By opting for Jeevan Utsav, policyholders can secure an alternative income stream, making it an excellent choice for retirement planning. The plan’s guaranteed additions make it even more secure. Additionally, the plan’s availability for minor lives is a significant advantage, allowing parents to invest in their children’s future and secure a steady income for them. The Premium Waiver Benefit (PWB) rider ensures that the child receives the full benefit even in the event of the proposer’s demise. If you’re considering this plan for your child, it’s highly recommended to add PWB to maximise the benefits. To further enhance the insurance coverage, it is recommended to opt for the Accidental Death and Disability Benefit rider.
The Flexi Income benefit option allows you to accumulate a corpus fund, which is particularly beneficial for minor lives, as they may not require the annual income benefit during their younger years. Additionally, if you wish to boost your life coverage, you can also consider opting for the Term Rider Benefit. However, it’s important to note that the limited availability of guaranteed additions for the premium paying term is a significant drawback, resulting in no profit accumulation during the deferment period. Nevertheless, after weighing the advantages and disadvantages, Jeevan Utsav emerges as a good plan that offers substantial benefits to policyholders and their beneficiaries.
