List of LIC Tax Saving Plans In 2024

What are LIC Tax Saving Plans?

LIC Tax Saving Plans are specific life insurance policies offered by the Life Insurance Corporation of India (LIC) that allow individuals to avail of tax benefits under Section 80C of the Income Tax Act. These plans help policyholders save on their tax liabilities while providing life insurance coverage and potentially generating investment returns.

LIC Tax Saving Plans offer the dual advantage of tax savings and financial security, making them popular among individuals seeking a disciplined approach to saving and investing.

Best LIC Tax Saving Plans

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To choose the best LIC policy for tax saving, the buyers must compare the plans and thoroughly review the LIC policies. Here, we have elaborated on the top LIC plans in detail.

1. LIC Index Plus

   LIC Index Plus 873 is a unit-linked life insurance plan offering market growth potential with guaranteed death benefits. Policyholders can invest in their choice of funds and receive guaranteed additions. This plan ensures life cover throughout the policy term and enhances their protection through riders. It provides flexibility in premium payment modes and offers coverage up to 85 years of age.

   Features of LIC Index Plus

   • The plan offers the flexibility to choose from various funds based on your risk appetite and financial goals.

   • The plan offers Annual guaranteed additions to the unit fund to help boost earnings and enhance savings over time.

   • Additional coverage options are available through riders for added financial security.

   • You can make partial withdrawals to address liquidity needs, ensuring financial flexibility.

   Benefits of LIC Index Plus

   • Death Benefit
     This policy offers guaranteed death benefits to beneficiaries, ensuring financial security if the policyholder dies. The death benefit payable is the amount highest of:

     • Unit fund value, or

     • Basic Sum Assured after deduction any Partial Withdrawals.

     • 105% of the total premiums received up to the date of death reduced by Partial Withdrawals, if any

   • Maturity Benefit
     Policyholders receive the Unit Fund Value upon surviving to the maturity date, providing a lump-sum payout.

   • Refund of Mortality Charges
     Policyholders who survive past the maturity date and have paid all due premiums receive a refund of mortality charges, further enhancing returns and value.

2. LIC Nivesh Plus

   LIC Nivesh Plus is a Unit-Linked insurance plan by LIC of India, offering insurance coverage and wealth accumulation through a single premium payment. It provides policyholders with a choice of four investment funds based on risk appetite and options for fund switching and partial withdrawals after the fifth policy anniversary.

   Features of LIC Nivesh Plus

   • The plan offers four investment funds to suit varying risk appetites.

   • You can switch funds and withdraw partially after the fifth policy anniversary.

   • The plan provides guaranteed additions to the policy unit fund over specific policy durations.

   • With the LIC Nivesh Plus policy, you can avail of additional protection through rider benefits such as Accidental Death Benefit Rider.

   Benefits of LIC Nivesh Plus

   • Death Benefit
     The nominee receives a death benefit if the policyholder dies during the term. This benefit is calculated as the amount higher of the following:

     • Unit fund value, or

     • Basic Sum Assured after deduction any Partial Withdrawals.

   • Maturity Benefit
     If the policy survives to maturity, the policyholder will receive a sum equal to the Unit Fund Value.

   • Guaranteed Additions
     The policy offers guaranteed additions to the Policy Unit Fund at specific intervals. These additions are based on a fixed percentage of the Single Premium amount paid and are added to the fund's value once the policy reaches certain milestones:

     • At the end of 6 years: 3%

     • At the end of 10 years: 4%

     • At the end of 15 years: 5%

     • At the end of 20 years: 6%

     • At the end of 25 years: 7%

3. LIC Jeevan Umang

   LIC Jeeva Umang 745 offers the family whole-life insurance coverage and the combined benefit of income and protection. The plan offers annual survival benefits to the insured from the end of the premium-paying term until the policy's maturity.

   Features of LIC Jeevan Umang

   • The plan offers the option to receive a death benefit in installments.

   • Different rider options can be availed to increase policy coverage.

   • The plan offers the option to pay the policy's premium through regular premium payment or by salary deductions during the policy's PPT.

   • Tax benefits can be availed U/S 80C and 10(10D) of the Income Tax Act.

   • Offers the benefit of rebates on premiums for a higher sum assured amount.

   Benefits of LIC Jeevan Umang Plan

   • Death Benefit

     If the life insured dies during the policy's tenure, the death benefit is paid to the policy's beneficiary.
     On death before the commencement of risk
     If the insured dies before the commencement of risk, the return of the premium paid without interest is paid to the policy's beneficiary.

     On death after the commencement of risk
     In the case of the insured's demise after the commencement of risk, the death benefit is defined as the sum assured on death plus vested reversionary bonus, and a final additional bonus (if any) is paid to the beneficiary of the policy. The sum assured on death is defined as:

     • Higher of 7 times the annualized premium; or

     • 105% of the total premium paid to date.

   • Survival Benefit

     If the life insured survives the premium-paying tenure of the policy, a survival benefit equal to 8% of the basic sum assured amount is paid annually until the policy maturity date.

   • Maturity Benefit

     If the life insured survives the entire tenure of the policy, the maturity benefit is paid to the insured as the sum assured on maturity plus the vested reversionary bonus and final additional bonus (if any). The sum assured on maturity is equal to the basic sum assured amount.

4. LIC Jeevan Utsav

   LIC Jeevan Utsav 771 is a whole life insurance plan the company offers. Initially, the company offers two options to tailor benefits to your preference. Option I provides Regular Income Benefits, while Option II offers the flexibility of Flexible Income Benefits, allowing you to choose a plan that aligns with your financial goals. This plan ensures comprehensive financial growth and security protection with flexible premium payments, tax benefits, guaranteed additions, and a loan facility.

   Features of LIC Jeevan Utsav

   • Allows flexible premium payments based on individual financial capacity.

   • It provides tax benefits and offers advantages under prevailing tax laws.

   • Guarantees additions to enhance the maturity value over time.

   • Offers a loan facility, providing access to liquidity against the policy. 

   Benefits of LIC Jeevan Utsav

   • Guaranteed Additions
     LIC Jeevan Utsav provides guaranteed additions at specified rates throughout the policy term, ensuring a predetermined boost to the policy's maturity value.

   • Death Benefit
     If the person insured passes away, the Death Benefit is paid. This benefit includes the "Sum Assured on Death" and accrued Guaranteed Additions, ensuring the policy is active. The Death Benefit is not less than 105% of the total premiums paid until death. "Sum Assured on Death" is the higher value between the 'Basic Sum Assured' and '7 times the Annualized Premium.'
     If a minor is aged below 8 at entry and passes away before risk coverage starts, the benefit is a refund of premiums paid without interest.

   • Survival Benefit
     For those policyholders who survive the policy term, there are two options:
     Option I - Regular Income Benefit:
     Receive a Regular Income Benefit equal to 10% of the Basic Sum Assured annually, starting from a specified year, provided all due premiums are paid.
     Option II - Flexi Income Benefit:
     On survival, policyholders can opt for the Flexi Income Benefit, receiving 10% of the Basic Sum Assured annually starting from a specified year as long as all due premiums are paid.

5. LIC New Jeevan Shanti

   LIC New Jeevan Shanti 758 is a single premium deferred annuity plan in which the policyholder pays a lump sum premium to obtain coverage. The plan also offers the option between Joint life and Single life Deferred annuities.

   Features of LIC Jeevan Umang

   • The LIC New Jeevan Shanti also offers flexibility in choosing the monthly, quarterly, half-yearly, or annually payout frequency.

   • Several riders available with this policy can be added for enhanced coverage.

   • The policy has tax benefits under Section 80C and Section 10(10D) of the Income Tax Act

   Benefits of LIC Jeevan Umang Plan

   • Death Benefit
     Purchase Price and Accrued Additional Benefit on Death (as described below) less the total annuity amount paid up to the date of death, if any, equals 105% of the Purchase Price.

   • Option to cover Dependant with Disability
     Suppose the policyholder has a disabled family member who is a dependent. In that case, he or she may acquire a Deferred Annuity for Single Life (Option 1) on their life for the benefit of a disabled nominee, provided the purchase price is at least Rs. 50,000.

   • Loan Facility
     After three months of policy issuance or after the expiration of the free-look period, whichever comes first, the policyholder may apply for policy loans against their LIC New Jeevan Shanti plan.

Key Features of LIC Tax Saving Plans

• Tax Benefits: The premiums paid towards these plans are eligible for tax deductions under Section 80C up to a specified limit (currently Rs. 1.5 lakh per annum, as of September 2021).

• Life Insurance Coverage: LIC Tax Saving Plans provide life insurance coverage to the policyholder, ensuring financial protection for their family in case of unfortunate events like death or disability during the policy term.

• Maturity Benefit: Depending on the type of plan, the policyholder may receive a lump-sum maturity amount or periodic payouts at the end of the policy term. The maturity proceeds are typically tax-free under Section 10(10D) of the Income Tax Act.

• Investment Component: Some LIC Tax Saving Plans, such as ULIPs, offer an investment component where a portion of the premium is invested in various funds, providing the potential for market-linked returns.

Summing It Up

LIC offers various tax-saving plans that help individuals avail of tax benefits under Section 80C of the Income Tax Act. These plans include traditional endowment policies, unit-linked insurance plans (ULIPs), money-back plans etc. Premiums paid towards these plans are eligible for tax deductions, and the maturity proceeds are usually tax-free. However, it's essential to stay updated on the latest offerings and tax regulations to make informed investment decisions based on individual financial goals and risk tolerance.