LIC’s New Jeevan Anand Plan is a plan which offers a combination of protection and savings. This plan gives financial protection against death with the terms of payment at the end of the policy term in case of his/her survival and also it takes care of liquidity needs through its loan facility.
The Sum Assured on Death will be as follows: Higher of 125% of the Basic Sum Assured or 10 times the annual premiums paid subject to a minimum of 105% of total premiums paid till death.
We will explain the working of LIC New Jeevan Anand with the help of an example:
Expect that Naveen is matured 35 years, purchases LIC’s New Jeevan Anand Plan.
Sum Assured = Rs. 5 lakhs
Policy term = 20 years.
The Annual Premium comes to Rs. 30,273 comprehensive of all charges which are payable for the whole term of 20 years.
- Different Assumptions:
Basic Reversionary Bonus proclaimed each year = Rs. 45 for every 1000 Sum Assured.
It means a bonus of 45 x (5,00,000/1,000) = Rs. 22,500 every year. Please note that there is no guarantee that this same bonus rate will be applicable – it could be higher or lower every year.
Final Addition Bonus = Rs. 20 per 1000 Sum Assured.
It means a Final Addition Bonus of 20 x (5,00,000/1,000) = Rs. 10,000 when the policy ends.
- Scenario 1 – Naveen survives until the end of the policy tenure
For this situation, the Sum Assured of Rs. 5 lakhs would be paid along with the simple reversionary bonuses and any Final Bonus declared by the company.
He gets: Sum Assured + Bonuses pronounced for a long time + Final Addition Bonus if announced. That implies he gets the Maturity Amount of Rs. 5,00,000 + (Rs. 22,500 x 20) + Rs. 10,000 = Rs. 9,60,000.
Likewise as and when he dies even after the policy term, his nominee will also be eligible to receive the Sum Assured of Rs. 5,00,000.
- Scenario 2 – Naveen dies in the 17th year of the plan
Naveen’s beneficiary would get the Sum Assured on Death with the reward and any Final Bonus. The Sum Assured on death would be higher of 125% of the Basic Sum Assured or 10 times the yearly premiums paid subject to at least 105% of aggregate premiums paid till death. In this way,
125% of the Basic Sum Assured = 125% of Rs. 5 lakhs = Rs. 625, 000.
10 times the annual premium = (30, 273*10) = Rs. 302, 730.
105% of all premiums paid = 105% * (30, 273*17) = Rs. 540, 373.
Therefore, the Sum Assured on Death would be the highest of the above options = Rs. 625, 000
His Nominee gets Death Benefits Payable = Rs. 6,25,000 + Rs. (22,500 x 17) + Rs. 10,000 = Rs. 10,17,500
Benefits of LIC’s New Jeevan Anand
- The policy offers the double benefit of financial protection in case of death of the policyholder and savings.
- Death benefit- Sum guaranteed on death alongside reversionary reward and last extra reward (assuming any) will be paid as death advantage to the chosen one in the event of the sad demise of the policyholder.
- Maturity benefit- The plan qualifies for Maturity benefit which will be paid at the end of policy term considering all the premiums have been paid in full. Sum assured along with reversionary bonus and final additional bonus will be paid as maturity benefit.
- Convenience- The arrangement can be obtained online without any problems.
- Flexibility-This plan offers the flexibility of paying premiums monthly, quarterly, biannually or annually depending on what the customer is comfortable with.