HomePersonal FinanceLife InsuranceLIC New Jeevan Amar Policy - Review

LIC New Jeevan Amar Policy – Review

LIC’s New Jeevan Amar replaces the old LIC Jeevan Amar Plan. LIC New Jeevan Amar Plan 955 is a Non-Linked, Non-participating, Individual, Pure Risk Premium Life Insurance Plan, which provides financial protection to the insured’s family in case of his/her unfortunate death during the policy term. 

This Plan can be purchased Offline through Licensed agents, Corporate Agents, Brokers, and Insurance Marketing Firms. This plan is launched along with LIC’s New Tech Term Plan. The New Tech Term plan is a copy of the old plan except for the premium rate. In this post, I shall review LIC New Jeevan Amar Policy and share my findings. I am sure these findings shall help you while buying this plan.

LIC New Jeevan Amar Policy Review

Key Features of LIC New Jeevan Amar Plan

  • Flexibility to choose from two benefit options: Level Sum Assured and Increasing Sum Assured. 
  • Flexibility to 
    • Choose from Single Premium, Regular Premium, and Limited Premium Payment 
    • Choose the Policy Term/Premium Paying Term 
    • Opt for payment of benefits in installments. 
  • Special rates for women. 
  • The benefit of an attractive High Sum Assured Rebate. 
  • Two categories of premium rates namely (1) Non-Smoker rates and (2) Smoker rates. The application of Non-Smoker rates shall be based on the findings of the Urinary Cotinine test. In all other cases, the Smoker rates will be applicable. 
  • Option to enhance coverage by opting for Accident Benefit Rider on payment of additional premium for the rider benefit.

Benefits

Benefits payable under an in-force policy shall be as under 

#1 Death Benefit

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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, provided the policy is in force and the claim is admissible shall be “Sum Assured on Death”. 

For Regular premium and Limited premium payment policy, “Sum Assured on Death” is defined as the highest of: 

  • 7 times of Annualised Premium; or 
  • 105% of “Total Premiums Paid”upto the date of death; or
  • Absolute amount assured to be paid on death. 

For Single premium policy, “Sum Assured on Death” is defined as the higher of: 

  • 125% of Single Premium. 
  • Absolute amount assured to be paid on death. 

Where, 

i. “Annualized Premium” shall be the premium payable in a year chosen by the policyholder, excluding the taxes, rider premiums, underwriting extra premiums, and loadings for modal premiums, if any, and 

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

iii. Absolute amount assured to be paid on death shall depend on Death Benefit Option chosen at the time of taking this policy and is as under: 

Option I: Level Sum Assured Absolute amount assured to be paid on death shall be an amount equal to Basic Sum Assured, which shall remain the same throughout the policy term. 

Option II: Increasing Sum Assured Absolute amount assured to be paid on death shall remain equal to the Basic Sum Assured till completion of fifth policy year. Thereafter, it increases by 10% of Basic Sum Assured each year from the sixth policy year till fifteenth policy year till it becomes twice the Basic Sum Assured. This increase will continue under an inforce policy till the end of policy term; or till the Date of Death; or till the fifteenth policy year, whichever is earlier. From sixteenth policy year and onwards, the Absolute amount assured to be paid on death remains constant i.e. twice the Basic Sum Assured till the policy term ends. For example, Absolute amount assured to be paid on death under a policy with Basic Sum Assured of Rs. X will be Rs. X till the end of fifth policy year, ` 1.1X during the sixth policy year, 1.2X during the seventh policy year, increasing so on by 10% of Basic Sum Assured each year till it becomes 2X in fifteenth policy year. From the sixteenth policy year and onwards, the Absolute amount assured to be paid on death will be 2X. 

The Death Benefit Option once chosen cannot be changed later. 

#2 Maturity Benefit

On survival of the life assured to the end of the policy term, no maturity benefit is payable.

Eligibility 

a) Minimum Age at entry : [18] years (Last Birthday) 

b) Maximum Age at entry : [65] years (Last Birthday) 

c) Maximum age at Maturity : [80] years (Last Birthday) 

d) Minimum Basic Sum Assured : ` 25,00,000/-. 

e) Maximum Basic Sum Assured : No Limit

f) Policy Term : [10 to 40] years 

g) Premium Paying Term 

Regular Premium : Same as policy term 

Limited Premium : 

[Policy Term minus 5] years for Policy Term [10 to 40] years,

[Policy Term minus 10] years for Policy Term [15 to 40] years 

Single Premium : NA

LIC New Jeevan Amar Plan Premium

The sample illustrative premiums for both Option I (Level Sum Assured) and Option II (Increasing Sum Assured) for Basic Sum Assured of ` 50 Lakh for Non-Smoker, Male, Standard lives under different Premium Payment options are as under –

LIC New Jeevan Amar Premium

LIC New Jeevan Amar Premium

LIC New Jeevan Amar Plan Review 

LIC New Jeevan Amar Plan is a pure-term plan. As it is sold offline the premium rate of the New Jeevan Amar Plan is higher compared to LIC New Tech Term Plan.

One additional difference I noticed is that compared to the earlier Jeevan Amar Plan this new plan is costly. You need to pay more premiums in order to purchase LIC New Jeevan Amar Plan.

All plan features are the same as that of a previous plan. It is like old wine in a new bottle with a new name. 

If you don’t have a term plan you can plan to buy one. If you are thinking to buy the LIC term plan, I would advise you to go for the LIC New Tech Term plan instead of the LIC New Jeevan Amar Plan. 

To know more about LIC’s New Jeevan Amar Plan Please visit LIC’s Website.

Shitanshu Kapadia
Shitanshu Kapadiahttp://moneyexcel.com/
Hi, I am Shitanshu Kapadia founder of moneyexcel.com & finxdata.com. I have written 1900+ articles on this blog. I am PGDBA(marketing), engaged in blogging for 10 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. The purpose of this blog is to spread financial awareness and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.
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