Jeevan Varsha: Review

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Jeevan Varsha is the new Money Back plan from LIC with Guaranteed addition.

Guaranteed return, Safety and liquidity these are the three USP of this plan.

Let us do an analysis of Jeevan Varsha based on these features.

Features:

9 year

12 year

Min./Max Entry age

15/66 years

15/63 years

Min./Max. Maturity age

75 years

Min./Max SA

Rs. 50,000 (Rs. 75,000 for mthly)

Premium needs to be paid for 9 years for both the 9 year and 12 year term and one can pay it in monthly/q-ly/h-ly or y-ly mode.

Death benefit:

SA + GA + Loyalty addition (If any).

Money Back Feature:

Policy provides money back after every 3 years.

Survival benefit

Term 9 year

Term 12 year

3rd year

15% of SA

10% of SA

6th year

25% of SA

20% of SA

9th year

60% of SA + GA + LA(if any)

30% of SA

12th year

40% of SA + GA + LA(if any)

Money back after every three years is the most important part of this policy; however money back amount in the initial year is very low.

Guaranteed addition:

Guaranteed addition of Rs. 65 per Rs. 1000 SA is paid for policy with 9 years term and Rs. 70 per Rs. 1000 SA is paid for policy with 12 years term.

Again it must be noted that addition is on SA and so every year same amount gets added.

I don’t think in the life insurance industry there is any money back plan available which pays after every three year and it has a guaranteed return, and hence these two points are the most attractive ones.

Return.

This is the third feature of this policy and according to me is the weak point.

Let us take an example.

For a person of age 35 years and the term 12 years and for Sum assured of Rs. 100,000 yearly premium comes at Rs. 16,053

As premium needs to be paid only for 9 years total premium payment is Rs. 1,44,477.

On this he will get guaranteed addition of Rs. 84,000.

Total Premium paid

Money Back

3rd year

48,159

10000

6th year

96,318

20000

9th year

1,44,477

30000

12th year

40000 + 84,000(GA)

Total

1,44,477

1,84,000

If we calculate; guaranteed return of Rs. 84,000 is received after paying premium of

Rs. 1,44, 477.

Now let us play with numbers.

You have paid Rs. 1,44,477, your SA is paid to you in the form of MB which is Rs, 1,00,000 this means (Rs, 1,84,000 – Rs, 1, 44, 477) return of only Rs. 39,523 L.

One can however take an advantage of money back to enhance the return by investing the amount in high return instrument.

Surrender:

Policy has surrender rules similar to traditional policies, you can not surrender it for first three years and after that pay a heavy surrender charge and get your money back.

Conclusion:

Do not invest your money if you are looking for guaranteed return because here money back comes with cost, however for those who are looking for liquidity and also wants to save tax along with risk cover can consider this plan.

Like “Jeevan Astha” this is closed ended plan and is open only till 31st march but please don’t feel bad even if you miss the bus ;-)

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