Since August 2014, LIC Jeevan Rakshak policy, a participating non-linked plan that offers a combination of protection and savings is being offered by the Life Insurance Corporation of India. It offers a constant financial support to the family in case of the death of the policyholder during the term of the plan and a lump sum amount at the maturity in case of survival of the policyholder. Loan facility is also available through this policy.
LIC Jeevan Rakshak offers the following benefits to the prospective policyholder
The above benefits are not inclusive of service tax, extra premiums or optional rider benefits, if any.
In case of the death of the policyholder after the 5th year of the policy term, Loyalty Additions, if any, will also be payable.
Participation in Profits - If the policy is in full force, then based on the discretion of the Corporation, the policy might be eligible for Loyalty Additions. The rates and amount for the same are decided by the Corporation and are paid out at the completion of the 5th year on the death of the policyholder or after the maturity of the policy on the survival of the policyholder.
Optional Benefit - An optional benefit can be availed through the LIC's Accident Benefit Rider that makes the policy a comprehensive one. Requiring an extra premium to be paid, this benefit is payable as a lump sum along with the death benefit on the accidental death of the policyholder.
Tax Benefit - Premiums up to Rs. 1,50,000 paid under this policy are admissible for deduction from taxable income under section 80C and the maturity proceeds are tax free as per section 10D, subject to fulfillment of specific terms and conditions.
The policy and the optional rider have a set of rules which constrain its availability to prospective policyholders. They are mentioned as below
Premiums for the LIC Jeevan Rakshak Policy can be paid in yearly, half-yearly, quarterly or monthly modes. The payment in the monthly schedule can only be done through ECS facility. Rebates are applicable for yearly and half-yearly modes of payment at 2% and 1% of the Tabular Premium and a 1.5% rebate is applicable for premiums worth Rs. 1,50,000 and above.
A grace period of a month (not less than 30 days) is allowed for yearly and half-yearly payments of premiums, while only 15 days are admissible for monthly payments.
A sample of annual premium rates (not inclusive of service tax) per Rs. 1000 of the sum assured is as follows :
| Age of Policyholder/Term (in years) | 10 | 15 | 20 |
|---|---|---|---|
| 10 | 85.9 | 51.7 | 35.2 |
| 20 | 86.25 | 52.05 | 35.55 |
| 30 | 86.45 | 52.35 | 35.95 |
| 40 | 87.35 | 53.7 | 37.8 |
The policy will be rendered invalid if the life assured commits suicide within a period of 12 months from the date of the commencement of the risk. In that case only 80% of the amount of the total premiums paid (excluding taxes), extra premium and Accident Benefit Rider (if any) will be paid.
How Does LIC Jeevan Rakshak Work
then, considering Mr. Kaushal (Age - 30 years), Mr. Binayak (Age - 40 years) and Ms. Susheela (Age - 50 years) apply for this policy, the sample premiums payable by them would be -
then, considering Mr. Kaushal (Age - 30 years), Mr. Binayak (Age - 40 years) and Ms. Susheela (Age - 50 years) apply for this policy, the sample premiums payable by them would be The policy can be availed by contacting registered LIC offices around India or through licensed agents and brokers of LIC. Medical reports are not a requisite for this policy as it mandates the coverage of only healthy individuals. Proposal form 300, a passport size photograph, address and age proof will have to be submitted during the time of application.
This policy is of a shorter time frame (20 years) and the maximum entry age is 55 years. While tax benefits are applicable on the policy, it can only be considered a fringe benefit to the actual cover it provides. As an investment option, this policy doesn't stand too bright.