LIC Jeevan Shikhar Plan

LIC Jeevan Shikhar- An Overview

LIC Jeevan Shikhar offered by the LIC of India is a single premium endowment plan that allows proposers to choose the Maturity Sum Assured (MSA). The single premium amount is based on the MSA chosen and the age of the policy holder.

However, the plan is no longer available for sale as it has been withdrawn by the LIC. But the policyholders who already have bought this plan will continue to be covered under the benefits offered by the plan.

Let’s take a quick look at the various features, Plan details and benefits of the policy.

Key Features of LIC Jeevan Shikhar Policy

• Higher Cover in case of death.

• Flexibility to choose Maturity Sum Assured (MSA).

• Guaranteed Return (MSA) along with Loyalty addition on maturity.

• Higher surrender value with an option to surrender the insurance anytime.

• Tax benefits under Section 80(C) of Income Tax Act.

• Tax free maturity amount under Section 10(10D) of Income Tax Act.

Eligibility Criteria of LIC Jeevan Shikhar Policy

Benefits of LIC Jeevan Shikhar Policy

Maturity Benefits: On policy maturity, policyholders are paid the Maturity Sum Assured (MSA) +Loyalty Addition.

Death Benefits: This endowment policy offers amazing death benefits. Let’s check out the death benefits offered by this plan.

Death during First Five Policy Years:

•   Single premium paid (excluding service tax) is returned, if the death happens before 8 years of Age.

•   10 times of the single premium (excluding service tax) paid is returned, if the death happens after 8 years of age.

Death after Five Policy Years and Before Maturity:

•   10 times of single premium paid (excluding service tax) along with loyalty addition is payable as death benefit. 

Please Note: Under this policy, the minimum age of risk commencement is 8 Years. Policyholders get to earn Loyalty Addition only after 5 years of successful completion of policy. 

Loyalty Addition: The Loyalty Addition is paid on the death of the policy holder or when the policy is surrendered. However, it is important to complete at least five policy years, or the policyholder must survive till the end of the policy.

Surrender Option & Surrender Value: Policyholders can surrender the policy at any time during the term of the policy.

The Guaranteed Surrender Value allowed is:

• 70% of the Single premium (excluding extra premiums paid and taxes) in the first year.

• 90% of the Single premium paid (excluding extra premiums paid and taxes), thereafter. (If policy holder chooses to surrender the policy after 5 years of the Policy, Loyalty addition (if any) is also payable.)

Sample Illustration of Death & Maturity Benefits

Let’s say, you’re investing in Jeevan Shikhar Policy (837).  Suppose:

• The Maturity Sum Assured you select is Rs. 5,00,000

• The Policy Term is 15 Years

• The Policy Purchase Year is 2016

• Your present age is 28 Years.

Basis the information provided above, your Single Premium turns out to be Rs. 2,07,405 (with Statutory Taxes).

With the above details, there are two possibilities. In the first case, the policyholder survives for 15 years and receives the maturity amount. Alternatively, in the second case, the policyholder dies before 15 years, and the nominee gets death claim amounts.

Here, we’ve explained both the cases below: 

Case 1: Maturity 

If the policyholder survives 15 years, then the Maturity amount (i.e., the combined total of Maturity Sum Assured plus the Loyalty Additions) will be provided as mentioned below:

Case 2 (Death before 15 Years)

10 times of single premium paid (excluding Service Tax) + Loyalty Addition is payable as death claim amount in case of death of the policyholder before completing 15 years or the maturity date of the policy. Loyalty Addition is provided on the policy only after 5 years from date of purchase. 

Table: Suppose if Death happened in Year 2022 then nominee will get death claim amount as 2017500. 

Exclusions

Suicide Clause: If the Life Assured, whether sane or insane, commits suicide within 12 months from the policy's risk commencement date, the policy will be considered void. In such cases, an amount higher than either 90% of the Single Premium paid or the Surrender Value will be payable. The policyholder's nominee or beneficiaries will not be eligible for any other claims under this policy. However, this clause will not be applicable if the Life Assured's age at the time of policy entry is below 8 years. In such instances, a refund of the Single Premium paid without interest will be provided.

Summing It Up:

LIC's Jeevan Shikhar plan provides individuals with a combination of savings and protection. This non-linked, single premium plan offers policyholders the opportunity to secure their financial future through a lump sum investment while ensuring their loved ones are financially protected in case of any unfortunate event. The plan comes with a fixed policy term and guarantees a maturity sum assured along with loyalty additions, making it an attractive option for those seeking both long-term growth and insurance coverage. The plan is no longer available for sale, but those who have already bought this plan can enjoy its benefits.