Insurance and Financial Advisor

LIC SIIP (Plan No. 852) – Should you invest?
# Why SIIP-I am not sure why LIC opted this name 🙂 Is it to compete with the Mutual Fund industry where the concept of SIP is very much famous and many investors think SIP is a product not a way of investment. I am not sure why this mad rush of choosing a product name-calling SIIP.

# GUARANTEED Addition:-LIC claiming that it is first of it’s kind that ULIP is offering some guarantee. However, there is no clarity as of now on when they pay it. Let us wait for clarity. However, as per my knowledge, it hardly charges the return equation.

# Return of Mortality charges at maturity:-It is one more gimmick to attract customers. How much will be the mortality charges of LIC’s such product? Above that what will be the value of such mortality charges when the policy mature down the life after 20 years or 25 years? It is just a peanut. I am not sure why LIC opted for this feature. Is it to showcase that Term Life Insurance products offer the return of premium and hence we too do it in ULIP?

# Charges:-Even though LIC claim that there are no policy admin charges, however, you have to pay premium allocation charges and fund management charges. Fund Management Charges are as high as around 8% for 1st year for offline policies and 3% from 6th year onwards.

Even if we consider the online plan, the cost is still high compare to the mutual fund industry. I think to compete with Mutual Fund industry with respect to expense ratios and portfolio exposure clarity, ULIPs must change its complete view.

# Death Benefit:-In case of the death of the policyholder, the nominee will receive higher of-basic sum assured, fund value or 105% of the premium paid. However, if you separate insurance with investment, then in case of the death of the policyholder, the nominee will receive both invested value and also the life insurance claim from term life insurance. Hence, if one is looking at this product as a Life Insurance, it is completely a waste.

# LIC'S NEW JEEVAN LAKSHYA POLICY #

How does LIC Jeevan Lakshya Policy work?
When buying the LIC Jeevan Lakshya Plan, the customer has to decide on the following:
Basic Sum Assured - this is the amount of cover that you want. You can choose a minimum amount of Rs. 1,00,000. There is no upper limit.
Policy Term - this is the period for which you wish to have the cover. The term can be anywhere between 13 to 25 years
Premium Payment Term - You need to pay the premiums for the Policy Term minus 3 years only.

Based on the basic sum assured, your age and the policy term selected. your annual premium will be decided.

Since it is a Participating plan, you will receive Simple Reversionary Bonus and Final Additions as and when declared by LIC.

Benefits in the LIC Jeevan Lakshya Plan

Death Benefit in LIC Jeevan Lakshya Plan

In case of the death of the policyholder before the end of the policy term, the nominee will receive all of the following:
10% of the Basic Sum Assured as an Annual Income Benefit from the next policy anniversary date to the policy anniversary date one year before the Maturity Date. We will explain this better in the example.
110% of the Basic Sum Assured payable on the Maturity Date
Simple Reversionary Bonus which has accrued throughout the policy term payable on the Maturity Date
Final Addition Bonus if declared payable on the Maturity Date
The Death Benefit shall not be less than 105% of all premiums paid as on date of death of the policyholder.

Maturity Benefit in LIC Jeevan Lakshya Plan

At the end of the policy term, the policyholder will receive the following:
Basic Sum Assured
Simple Reversionary Bonus
Final Addition Bonus if declared