LIC Dhan Varsha 866 is a new plan by LIC. Dhan Varsha is a single premium guaranteed plan. It is a Non-linked, Non-participating, Saving cum life insurance plan. This plan offers insurance coverage as well as protection also. It is proposed to provide financial assistance for the family in case of the death of an insured person during the policy term.
This plan also provides a guaranteed lump sum amount on the date of maturity on the surviving life assured. You can buy this plan offline as well as from the online LIC website also.
In this post, we will review LIC Dhan Varsha 866 plan and evaluate the features and benefits of this plan.
Eligibility for LIC Dhan Varsha
The eligibility criteria for the LIC Dhan Varsha policy is given below.
LIC Dhan Varsha No.866 Benefits
This plan offers two types of benefits. Death benefit & Maturity benefit.
#1 Death Benefit – If the death of the policyholder happens to post the commencement of risk, then his nominee will receive Sum Assured on Death + Accrued guaranteed addition. Sum Assured on Death shall depend on the option chosen by the policyholder as under –
Option 1 – 1.25 times of Tabular Premium for the chosen Basic Sum Assured
Option 2 – 10 times of Tabular Premium for the chosen Basic Sum Assured.
You have to choose these two options at the time of buying the policy itself. Later on, this option can’t be altered.
If the death happened before the commencement of the risk, the Death Benefit payable shall be a refund of premium(s) paid (excluding taxes, extra premium, and rider premium(s), if any), without interest.
#2 Maturity Benefit – If the life assured survived till the maturity of the policy, then he will receive “Basic Sum Assured” along with accrued Guaranteed Additions.
The Guaranteed Additions shall accrue at the end of each policy year, throughout the policy term, and shall depend on the Option Chosen, Basic Sum Assured, and the Policy Term.
Option to take Maturity Benefit in installments for 5 years, After the settlement option is exercised, and the life assured desires to withdraw the option, and commute the outstanding installments, it can be done on written request. Not allowed to the nominee, in case of death of LA during installment payouts.
LIC Dhan Varsha Examples
Here are examples of policies with option 1.25 times premium + Accrued guaranteed addition and 10 times premium + Accrued guaranteed addition. These examples are for 30-year-old person who opts for 1.25 times premium and 10 times premium options.
LIC Dhan Varsha No.866 Review – Should You Invest?
From the above examples and features let’s try to evaluate LIC Dhan Varsha in detail.
#1 Do you want to get insurance and investment in a single product?
LIC Dhan Varsha is a saving cum insurance plan. This means it is a mixed product. As far as financial planning is concerned it is not advisable to club the goal of insurance – life cover (risk cover) with the investment product. I would not advise you to go for a saving cum insurance plan.
#2 What type of Returns can you expect from this policy?
From the above example where 30-year-old person opts for a 10 Lakh policy. In the case of 1.25 times, a premium option is taken IRR is 6%, and for the 10 times, the premium option IRR is 4.74%.
This means returns given by this policy is just a little bit above the saving bank account.
It is very very less and probably equals fixed deposit returns.
From the above two points, it is very clear that this policy is not a very good option to opt for. This policy offers you tax benefits but as far as returns this policy is not advisable to go for.
