LIC Yuva Credit Life & Digi Credit Life – Features Benefits & Options

LIC Yuva Credit Life & LIC Digi Credit Life are Non-Par, Non-Linked, Life, Individual, and Pure Risk Plans. These plans offer protection to the insured’s family by covering any outstanding loan repayments in the event of the insured’s death during the policy’s duration.

LIC Yuva Credit Life Plan can be purchased Offline through Licensed agents, Corporate Agents, Brokers, and Insurance Marketing Firms. LIC Digi Credit Life plan shall be available Online only and can be purchased directly through the LIC’s website www.licindia.in.

LIC Yuva Credit Life & Digi Credit Life

LIC’s Yuva Credit Life & Digi Credit Life are purely decreasing Term Assurance plans wherein the death benefit will be reduced over the term of the policy. In both policies, the policyholder must select the Basic Sum Assured, duration of the policy, and interest rate based on the loan’s terms and conditions. Based on the Policyholder’s choice of Basic Sum Assured, Policy Term, and Interest rate, a Risk Cover Schedule will be created. The Risk Cover Schedule offers interest rates of 6%, 7%, 8%, 9%, 10%, 11%, and 12%, regardless of the loan provider’s interest rate on the policyholder’s loan. The Risk Cover Schedule will display the Death Benefit (Sum Assured on Death) for each Policy Year, calculated using the selected annual interest rate and paid yearly, regardless of loan repayments.

At the inception, the Sum Assured on Death shall be equal to the Basic Sum Assured, and subsequently, at each Policy Year, the Sum Assured on Death shall be as mentioned in the Risk Cover Schedule. Therefore, the death benefit as specified in the Risk Cover Schedule may be higher or lower than the actual outstanding Loan.

Key Features

• Flexibility to Select from Single Premium and Limited Premium Payment

• Policy Holder can select the Policy Term/Premium Paying Term

• Special rates for women

• Benefit of 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

• Choice of loan interest rate as appropriate to the policyholder at the inception of the policy

Eligibility

• Minimum Age at entry: 18 years (Last Birthday)
• Maximum Age at entry: 45 years (Last Birthday)
• Minimum Age at Maturity: 23 years (Last Birthday)
• Maximum age at Maturity: 75 years (Last Birthday)
• Minimum Basic Sum Assured – ₹ 50 Lakh
• Maximum Basic Sum Assured – ₹ 5 Cr (Based on Approval)

The basic sum assured shall be in multiples of the amount specified below –

Policy Term & Premium Paying Term

LIC Yuva Credit Life & Digi Credit Life Benefits

Death Benefit

Death benefit, payable on the death of the Life Assured during the policy term after the date of commencement of risk but before the stipulated Date of Maturity, provided the policy is in force and the claim is admissible shall be “Sum Assured on Death”.

For the Limited premium payment policy, “Sum Assured on Death” is defined as the higher of – 

• 105% of “Total Premiums Paid” up to the date of death; or

• Absolute amount assured to be paid on death 

Where “Total Premiums Paid” means the total of all premiums paid under the base product, excluding any extra premium and taxes, if collected explicitly. 

For a Single premium policy, “Sum Assured on Death” is defined as 

• Absolute amount assured to be paid on death 

Where a Single Premium shall be the premium amount payable excluding taxes and underwriting extra premiums. 

The Absolute amount assured to be paid on death shall be as specified in the Risk Cover Schedule. The Risk Cover Schedule shall show the Sum Assured on Death for each Policy Year and shall be based on the chosen interest rate p.a. effective on an equated yearly repayment basis, irrespective of the actual loan repayment. At the inception, the Sum Assured on Death shall be equal to the Basic Sum Assured, and subsequently at each Policy Year, the Sum Assured on Death shall be as mentioned in the Risk Cover Schedule. Death Benefit as specified in the Risk Cover Schedule may be higher or lower than the actual outstanding loan.

Maturity Benefit

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

Options In case of Early Prepayment of Loan

If Life Assured repays the outstanding loan before the end of the policy term, he/she shall have the following two options 

• To surrender his/her insurance cover.

On such cancellation, an amount equal to the Unexpired Risk Premium Value, if any, shall be payable.

• To continue the policy till the end of the Policy Term.

In case of death of the Life Assured during the policy term, the death benefit shall be payable to the nominee as per the Risk Cover Schedule.

LIC Yuva Credit Life & Digi Credit Life Premium illustration

The sample illustrative premiums for Males, Non-Smoker, Policy Term 25 years, Basic Sum Assured of ₹ 50 Lakh for a loan interest rate of 8% are as follows –

The above premiums are exclusive of taxes.

The sample Risk Cover Schedule for a Policy Term of 25 years and loan interest rate of 8% is as follows –

Conclusion

LIC Yuva Credit Life & Digi Credit Life are good risk cover plans for loans. You can safeguard your assets against loan liabilities by purchasing these plans. You must evaluate these plans thoroughly before buying.