Categories: Insurance Planning

LIC’s Jeevan Labh (Table No.836)-Features and Review

LIC's newly launched Jeevan Labh

LIC is launching a new plan called Jeevan Labh Table No.836. This plan will be available from 4th January, 2016. This is a tax saving season. So targeting this, LIC is launching this new plan. Let us see what Labh (Profit) it gives you.

Jeevan Labh (Table No.836) is a limited premium paying, non-linked, with-profits endowment plan that offers a combination of protection and savings. Therefore, this is a typical endowment plan. The only difference is the limited premium payment. This is a typical insurance cum investment plan of LIC.

Features of Jeevan Labh (Table No.836)

  • Minimum Sum Assured is Rs.2, 00,000. There is no maximum basic sum assured limit.
  • Policy term will be 16 years, 21 years of 25 years.
  • The premium paying term will be 10 Years (for 16-year policy term), 15 years (for 21-year policy term), and 16 years (for 25 year policy term).
  • Minimum age at entry is 8 Years.
  • Maximum age at entry is 59 Years (for 16-year policy term), 54 years (for 21 year policy term) and 50 Years (for 25 year policy term).
  • You can pay the premium as yearly, half-yearly, quarterly, or monthly mode.
  • If you pay yearly premium, then you will get rebates of 2% in premium payment and for half-yearly premium rebate will be 1%.
  • No rebate for quarterly or monthly payments.
  • If you have opted for sum assured of Rs.15 lakh or more, then the rebate will be 1.75%, for Rs.10 lakh to Rs.14, 90,000 the rebate is 1.5% and for Rs.5 lakh to Rs.9, 90,000 the rebate is 1.25%.
  • You can avail the loan facility also.
  • This plan offers two riders. One is Accidental Death and Disability Benefit Rider and another is New Term Assurance Rider.

Benefits of Jeevan Labh (Table No.836)

Maturity Benefit–

The Sum Assured+Bonus+Final Additional Bonus will be payable at maturity as a lump sum.

Death Benefit–

“Sum Assured on Death“, vested Simple Reversionary Bonuses and Final Additional bonus, if any, shall be payable.

Sum Assured on Death-Higher of 10 times of annualised premium or Absolute amount assured to be paid on death i.e. Basic Sum Assured. This death benefit shall not be less than 105% of all the premiums paid as of the date of death.

Who can buy this plan?

  • You can buy this plan if you are satisfied with returns of around 5% to 6%. This leads to a negative real return. Real return means return on investments minus the inflation rate. If the return from this plan is 5% or 6% and inflation rate is 7%, then the real return will be -2% to -1%.
  • You can buy this plan if you feel your family depends can survive financially without you. Because this plan is a typical endowment plan where the concentration is neither an insurance nor investment need. Therefore, you lack the ideal life protection coverage. One must have life insurance of at least 15-20 times of his or her yearly income. Hard to buy that much of insurance coverage from this plan, as the premium will be high. So you satisfy yourself by investing the amount which is feasible for you. This leads to lower insurance coverage.
  • You can buy this plan if your agent is luring you for tax saving purpose. But do remember that the investment without financial goal is dangerous than no investment.
  • If your family member or someone who is dear to you is an agent, then to satisfy him (his business), you can definitely buy this plan. He will be happy as without a single rupee investment, he will earn around 35% first year commission and after that around 5% to 6% commission every year. So ultimately, he will be richer than you will.

My take on this plan–

What is new in this plan? The only new part I can say is the limited premium payment option. Other than this, nothing special. It is a typical endowment plan where even by investing for long term, one can expect a negative real return.

Simply by buying a term plan (from LIC itself) and investing in a debt product like PPF will give you more return, same tax benefits, and flexibility than this product.

Apart from this, your agents may lure you by saying the riders available in this plan. Simply avoid it. Instead, I suggest you to buy the accidental insurance separately from general insurance companies than clubbing with this product as a rider.

There is nothing special to review it or concluded that this is one of BEST product LIC launched. This plan is especially launched in January month to target the tax saving salaried.

Take any example for any age; the return from this plan will not be more than 7%. Your agent may show you the benefit in such a way that it may be around 10%. How? He will include the benefit you availed by investing in this plan and then the maturity amount. This is very wrong. If that is the case, then PPF will be on the higher side with the same tax benefits.

I know many agents when it comes to investment they tilt their conversation towards the importance of insurance. When it comes to insurance, they tilt as an investment product, which gives you some returns. However, do remember the Govt launched Pradhan Mantri Jeevan Jyoti Bima Yojana is far better and serves the pure insurance need than this product.

Stay away..!!

BasuNivesh

View Comments

  • An agent has approached me with the New Jeevan Labh proposal. So I landed here in your page for a review, though I have made up my mind the conventional returns is not my cup of tea. But I found your calculations of 5-6% kind of misleading because I did my calculations when the agent shared the quotes based on current bonus rates. Of course, the bonus is variable, I understand. But word 'guaranteed' doesn't exist in any asset class I suppose. Coming back to your calculations, let me know whether I am calculating the IRR the right way - put all premium payments in negative and the final returns in positive and apply IRR for the entire column. Given this, I was getting 6.74%, 7.14% and 7.8% for 16, 21 and 25 years respectively. Even without the one time final bonus, all the IRR were coming up to 6.8%. I am 35 years. Not a big fan of PPF mentioned by you as the returns are hopeless when I invest every month as I prefer SIP style of investment. Debt mutual funds in long term invite LTCG though inflation indexed. Not many bonds with good YTM and there is reinvestment risk. If at all, I choose to invest in Debt, do I have much options? Any private insurer with rates better than 6.8%?

    • Dear Ram,
      If you are convinced with agents data and 6.8% returns, then fantastic opportunity and go ahead. Regarding the calculations, I don't have enmity either with LIC or with other insurers. If you feel LIQUIDITY not an issue and 6.8% returns are BEST to beat the inflation then please go ahead.

  • Dear Sir,
    took lic jeevan labh policy on 15march 2017..with 16 year pay period and 25 year maturity..Invested 3 years Rs 72000x3years premium = 2,16,000.. After 3 years payment..need to surrender now on 15march 2020...how much should i expect from lic as surrender value?? or please suggest when to surrender to atleast get invested amount...

    • Dear Manoj,
      Regarding the values, approach the regional LIC Branch. Obviously if you try to surrender now, the value be less than what you paid. You may get small return along with what you paid if you pay for more than 5 years or so.

  • Hi Basu
    i will be insured like on LIC’s Jeevan Labh (Table No.836). I will be paid on 5000 per month. My age is 35 which one is better to choose 16/10, 21/15, 25/16. Please need ur suggestion for me.

  • Hi Basu
    How we will get 7% returns in the policy as it has been mentioned in most of the comments. I want to know the calculations. And if we get 7% tax free returns, it does not seem bad.

    • Dear Ajay,
      Don't rely on anyone. Do your own IRR calculation. If you feel 7% TAX-FREE returns are BEST for your long term goals, then go ahead.

      • Hi Basu
        I am not relying on anyone. I just want to know how come the calculation shows that the IRR is 7%.

        • Dear Ajay,
          Please do enter the values as I did. If anything different then let me know, I too may do certain errors right? :)

  • Please share what is commission %for plan jeevan labh 836 for premium paying term 10 years.and policy terms 16 year Please reply.

  • I want to buy jeevan lab for my daughter who is 21 year of age for Rs 36,000/annum for 16 years. At the age of 46 years she will get return of about Rs 21,46,500 with normal life cover Rs 20,27,250 and accidental life cove of Rs 28,22,250. She will be able to pay RS 3000/month by an RD and pay yearly premium when i am no more. The actual premium paid is about Rs 574048 for 16 years. The return percentage per annum is about 10.956. If inflation is considered about 7%then the gain is about 4%. This plus life cover for about Rs 20,27,250 and accidental cover of about Rs 2822250. The policy goes with life and investment for my future of my daughter. Please , advice can I go ahead or is there any alternative which is better then this ?

  • Hi,

    I have received a quotation from LIC Agent for Jeevan Labh where I have to pay 70k premium per annum for 16 years and a term of 25 years with total payment being 11lakhs. The return is shown as 45 lakhs after 25 years. This is a 12% return and not 6-7% as mentioned above. Can you please guide on this? I can share the forecast if you want.

    • Som-Check on what basis he arrived at 12%? In my opinion and firm belief, the returns will not be more than 7%.

      • Problem is as mentioned above, they don't give you that level of details. What is mentioned is -

        Premium- Your Yearly premium under this policy is Rs. 70,981. In 16 years you will pay a total of Rs. 11,16,451.
        Maturity Benefit - A total of Rs.44,98,500(estimated) can be expected through the term of this policy.
        Life Cover - In this policy your life cover will start at Rs. 15,75,000. By virtue of bonus getting added every year, your risk cover will grow to Rs. 44,95,500 when your age will be 58.

        If you calculate the rate of return, it comes to close to 12%.

        • Som-They are wisely ready to give you 12% expected return but not ready to validate their point of view. It only means that they are misleading you. Rest you have to decide.

          • It is on the basis of Rs 47 to Rs 50 bonus per Rs 1000 of SA. This way for 12 lac (Just as an example) SA and 25 years policy term you get Rs 15 lac bonus apart from Rs 12 lac SA. You actually pay only Rs 8.5 lac premium.
            Is this valid numbers and whether bonus is really that high?

  • I did MBA- Finance from reputed B-school.
    Insurance & wealth creation two separate things. thanks for educating people.

    I (27) just had one thought & want cross check with you before implementing.

    My Mom age is 51, thinking to take LIC Jeevan Labh policy.
    She is home maker & carries no responsibility.
    Dad is Rtd. state Govt. employee, so they have medical insurance up to 5 Lk.

    "I want to make sure that she(MOM) have backed up assert (insured amount/maturity benefit), & that she can use as instrument to give boost to surrounded people take care of her in future."
    It doesn't mean that I don't want to take care, But it is good to have some assert in her hand to nominate for nominee.

    It's kind of power in her hands & not much security is required to protect that.

    I am ready to pay premium. 15 Years premium & 21 settlement. Please let me know thought & backed up with strong logic.
    let me know, If you know any alternative .
    Thanks in advance.

    • nym-Whether life insurance required for her? To me NO, then why insurance policies?

      • I am very clear with my requirement.
        My question is, can this policy is used as per my requirement. Do we have any other option.
        Please dont get into concepts of when insurance is required & why & how much.

  • Sir,

    I was a victim of Aviva Freedom Life insurance which I believed to be an investment option as suggested by an agent.
    I am paying my premium of 60,000 every year for past 4 years. Policy have a locking period of 5 years. I tried reaching out to AVIVA for surrender accepting a loss of 25 K. Still I was forced to continue paying on the name of locking period.

    It kept me in losses even after 4 years and have no options other than to continue. I am wondering how come IRDA stay silent when these people continue their loot.

    Thanks so much for your time as you are saving many keeping us away from their trap.....!!!

    Appreciate your good work.

    Ravi

    • Ravikanth-It is not miss-selling alone but miss-buying that making them profitable (INCLUDING LIC).

      • Can you please suggest if I can go for stop payments options and take the amounts once the locking period is complete.
        Please help me with the better term policies available if you have it handy.

          • Amazingly quick response.. Thanks so much ..!!!

            As suggested I will go for ICICI or HDFC.

            Regarding below Mutual Funds and I use FUNDS India for transactions,

            -- BNP Paribas LT Equity Fund(G) -- INR 5000
            -- Franklin India Ultra Short Bond Fund-Super Inst(G) -- INR: 15,000
            -- ICICI Prudential Long Term Equity Fund (Tax Saving) - Growth -- INR: 10,000

            I am planning for an investment of 50,000 more.
            Can you please suggest me if I can add it to Franklin and ICICI or any other better options with 2-3 years locking.

            Regards,
            -Ravi

          • Ravikanth-Without knowing much of your financial goals, it is hard for me to guide.

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Published by
BasuNivesh
Tags: Jeevan Labh (Table No.836)
11 years ago

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