LIC Jeevan Kiran New Term Plan – Should you buy?

Yesterday LIC launched one more new term plan called LIC Jeevan Kiran (870). How it is different from the existing LIC’s New TECH TERM? Is it wise to consider LIC Jeevan Kiran plan?

LIC Jeevan Kiran New Term Plan 870

It is a Non-Linked, Non-Participating, Individual, Savings, Life Insurance plan which offers a combination of protection and savings. This plan provides financial support to the family in case of unfortunate death of the life assured during the policy term and returns the total premiums paid in case of survival till maturity.

Eligibility for LIC Jeevan Kiran

Let us look into the eligibility features of LIC Jeevan Kiran.

  • Minimum and maximum age at entry – 18 Yrs and 65 Yrs
  • Minimum and maximum age at maturity – 28 Yrs and 80 Yrs
  • Policy Term – 10 Yrs to 40 Yrs
  • Minimum Basic Sum Assured – Rs.15,00,000
  • Maximum Basic Sum Assured – No Limit
  • Premium Payment Options – Single or Regular (Equal to the term of the policy). For regular premiums, the options are Yearly or Half Yearly.
  • Loan – Not Applicable
  • How to buy? – Online or Offline (through agents)
  • Riders – For single premium policies, only an Accidental Death Benefit rider is available. However, for regular premium policies Accidental Death Benefit rider OR Disability Benefit Rider.

Benefits Of LIC Jeevan Kiran

Under this plan, there are two benefits and they are explained as below.

a) Death Benefit

The death benefit payable on the death of the life assured during the policy term after the date of commencement of risk but before the date of maturity shall be “Sum Assured on Death”.

The Sum Assured on Death for regular premium policies is higher of the below.

  • 7 times of Annualized Premium; or
  • 105% of “Total Premiums Paid” upto the date of death; or
  • Basic Sum Assured.

The Sum Assured on Death for single premium policies is higher of the below.

  • 125% of Single Premium; or
  • Basic Sum Assured.

Your nominee is allowed to receive this death benefit in 5 years yearly, half-yearly, quarterly, or monthly options. You have to choose the option 3 months before the maturity. You have to choose this option during the policy period. Also, you are allowed to choose the option to receive some part as a lump and some part as an installment to your nominee.

b) Maturity Benefits

On Life Assured surviving the stipulated Date of Maturity, “Sum Assured on Maturity” shall be payable, where “Sum Assured on Maturity” is equal to “Total Premiums Paid” under Regular Premium Payment policy and “Single Premium Paid” under Single Premium Payment Policy.

Where, “Total Premiums Paid” means a total of all the premiums received, excluding any extra premium, any rider premium, and taxes. “Single Premium Paid” means a single premium received, excluding any extra premium, any rider premium, and taxes.

You are allowed to receive this maturity benefit in 5 years yearly, half-yearly, quarterly, or monthly options. You have to choose the option 3 months before the maturity.

LIC Jeevan Kiran New Term Plan – Should you buy?

Instead of adding a RETURN OF PREMIUM option in it’s existing term plan, LIC launched one more plan LIC Jeevan Kiran which basically a return of premium plan.

As you are going to get back the premium, obliviously you have to pay a hefty premium to it. Hence, rather than opting for this product, it is always best simple plain vanilla term plan.

However, I am not saying that one must stay away from this product. If you are FOND of getting back some peanut at maturity as a relief that your money is not wasted and you don’t know the time value of money, THEN PLEASE GO AHEAD.

12 Responses

  1. Plan # 870
    Whether friend can be nominated as nominee?
    Whether person can state nominee who may not be legal heir in will and subsequently inform in future to LIC for this plan (plan #870). ?

    1. Dear Shreeniwas,
      There should a insurance interest while nominating. Hence, friends can not be nominated. Nomination can be changed at any point of time.

  2. Sir over the years LIC has been giving returns to the tune of 5-6% CAGR. Banks & POs used to give returns to the tune of 8-8.5% even 7-8 yrs ago,now those returns come to the range of 6-7%. NPS Annuity Service Providers also give returns to the tune of 5.25-6.75% range. How do you compare these three investment instrument? Hasn’t at least LIC maintained whereas others just degraded?

    1. Dear Prabir,
      Compare current Bank and PO rates to LIC’s 5% returns. If you feel for the long term investment 5% to 6% is the wonderful wealth creator and you assume inflaiton can be beaten easily, then PLEASE CONTINUE.

  3. Not even peanuts, sir. What you get is only the original premium paid over the period of entire policy term, which, in general would be 15 to 20 years. Imagine the time value of money of all the premiums paid over the policy term. IRR would definitely be negative – no brainer here – (I have not calculated the XIRR but it is no brainer that the XIRR would be negative).

      1. Ya one should,if it is suitable to one’s need than it is far batter product against the available companians products it the same cadare

        1. Dear Punit,
          Even against the LIC’s New Tech Term policy? 🙂 I think as per you, LIC’s New Tech Term Policy is also not equal to this policy mainly because this policy can be SOLD offline but not the LIC’s New Tech Term Policy right?

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