LIC Jeevan Shiromani (Plan No. 947) is a traditional money back plan offered by LIC for primarily targeted on the rich and HNI investors. If you are considering this HNI plan by LIC, then let’s do a LIC Jeevan Shiromani Plan Review (2023) and do a detailed evaluation of its features, benefits and also calculate the final benefit amount and returns using LIC Jeevan Shiromani maturity calculator.
This non-linked with profit, money back policy with critical illness cover specially targeted at HNIs or high net worth individuals like NRIs, Doctors, Businessmen, High-Salaried, Merchant Navy, Pilots, etc., the policy of LIC Shiromani Plan was launched for the first time in 2017 as LIC Plan 847 – UIN 512N315V01. But it was revised in Feb-2020 under new UIN 512N315V02 as LIC Plan 947.
LIC Website link to Policy page – Link
Let’s have a look at the LIC Jeevan Shiromani Plan Details and features now.
Features of LIC Jeevan Shiromani (947)
Before we undertake a detailed LIC Jeevan Shiromani Plan Review, let’s first list down the features and see what are the LIC Jeevan Shiromani Benefits. Here are the plan details and prominent features:
- This is a traditional Moneyback Plan that comes under LIC Table No. 947.
- What this means is that you keep paying premiums regularly during the premium payment term and the insurer then pays back the sum assured in parts at regular intervals during the term of the plan.
- The Minimum Basic Sum Assured in LIC Plan 947 is Rs 1 Crore or Rs 1,00,00,000 minimum.
- There is no upper limit for the Maximum Basic Sum Assured amount.
- One can purchase this plan at Minimum Entry Age of 18 years.
- The Maximum Entry Age varies based on the chosen policy term. It is 55 years if you choose 14-year policy term. Or 51 years if you choose 16-year policy term. Or 48 years if you choose 18-year policy term. Or 45 years if you choose 20-year policy term.
- The Maximum Maturity Age also varies based on the chosen policy term and starting age. It is 69 years if you choose 14-year policy term. Or 67 years if you choose 16-year policy term. Or 66 years if you choose 18-year policy term. Or 65 years if you choose 20-year policy term.
- The Policy Term available are 14, 16, 18 and 20 years.
- The Premium Payment Term (PPT) available are calculated as (Policy Term – minus 4). So it is 10 years for a policy term of 14 years, 12 years for policy term of 16 years, 14 years for policy term of 18 years, and 16 years for policy term of 20 years.
- The premium can be paid yearly, half-yearly, quarterly or monthly based on investor’s choice and convenience.
- The policy offers Guaranteed Additions, which accrue at the end of each policy year during the Premium Paying Term (PPT) provided all due premiums have been paid on time and in full. The rate of Guaranteed Additions has also been decided upfront. It shall be Rs. 50 per thousand Basic Sum Assured for first five years. After that, it will be Rs. 55 per thousand Basic Sum Assured from 6th policy year onwards.
- The policy, unlike most other traditional LIC plans has an Inbuilt Critical Illness Coverage which would pay an amount equal to 10% of Basic Sum Assured in case of critical illness claim during the policy tenure.
- The plan can be purchased offline via LIC office/agent as well as online on LIC website. Unsurprisingly and to push digital mode, there is a rebate for online purchases of the policy.
- You don’t need to undergo any medical tests to purchase this plan.
- You can also buy more than one LIC Jeevan Shiromani policies in your name if you want.
LIC Jeevan Shiromani Regular Moneyback Benefits (2023)
Since LIC Jeevan Shiromani is a money back plan, it means that the insurer will pay out some amount regularly (as moneyback benefit) during the policy tenure and even before maturity.
The amount (%) and the timing of moneyback depends on the policy term as follows –
- For 14-year Policy, 30% each of Sum Assured is paid as moneyback after the 10th and 12th policy year. The remaining 40% is paid out at maturity in 14th year.
- For 16-year Policy, 35% each of Sum Assured is paid as moneyback after the 12th and 14th policy year. The remaining 30% is paid out at maturity in 16th year.
- For 18-year Policy, 40% each of Sum Assured is paid as moneyback after the 14th and 16th policy year. The remaining 20% is paid out at maturity in 18th year.
- For 20-year Policy, 45% each of Sum Assured is paid as moneyback after the 16th and 18th policy year. The remaining 10% is paid out at maturity in 20th year.
Do note that the guaranteed additions (Rs 50/thousand in first 5 years and Rs 55/thousand after 6th year) are applicable every year. But these accrue till maturity and are not paid out along with moneyback amounts. Instead, the final accrued guaranteed additions are paid out once only in the year of policy maturity.
LIC Jeevan Shiromani Final Maturity Benefits (2023)
Since LIC Shiromani Plan basically a money back plan, it pays out some money as moneyback during the policy tenure and the remaining is paid out as final maturity benefit. The amount (%) of maturity amount is as follows –
- For 14-year Policy, 40% of Basic Sum Assured + Guaranteed Addition + any Loyalty Addition is paid out at maturity in 14th year.
- For 16-year Policy, 30% of Basic Sum Assured + Guaranteed Addition + any Loyalty Addition is paid out at maturity in 16th year.
- For 18-year Policy, 20% of Basic Sum Assured + Guaranteed Addition + any Loyalty Addition is paid out at maturity in 18th year.
- For 20-year Policy, 10% of Basic Sum Assured + Guaranteed Addition + any Loyalty Addition is paid out at maturity in 20th year.
In this plan, you can also defer your maturity benefit for to receive Maturity Benefit in instalments over the chosen period of 5 or 10 or 15 years instead of lump sum amount under an in-force as well as Paid-up policy. This is the Settlement Option of LIC Jeevan Shiromani.
LIC Jeevan Shiromani’s Death Benefit for Nominees
- In case of policyholder’s demise during first 1-5 years, the payout to nominee is = Sum Assured on Death + Accrued Guaranteed Additions
- In case of policyholder’s demise 5th year or later but before maturity, the payout to nominee is = Sum Assured on Death + Accrued Guaranteed Additions + Loyalty Addition, if any.
The Sum Assured on Death is the highest of: i) 10 times annual premium, or ii) Sum Assured on Maturity, or iii) 125% of Basic Sum Assured
There is also an option to defer the death benefits payable to the nominee in form of installments rather than a lumpsum payment chosen over the period of 5, 10 or 15 years. This option can be exercised only by the policyholder during his/her lifetime and Nominee cannot alter this choice of policyholder.
What are LIC Jeevan Shiromani Premium Rates (2023)?
People looking to invest in this policy generally search for LIC Jeevan Shiromani Plan Premium Calculator. But that is not available easily online.
So to find out the LIC Jeevan Shiromani Premium Rate 2023 or the latest annuity rates of LIC Jeevan Shiromani (or Jeevan Shiromani Table No. 947, UIN : 512N315V02), I decided to use the LIC Online Premium Calculator on the website’s sales page (link) as the latest annuity rates are not available elsewhere on the LIC website.
Here is the LIC Jeevan Shiromani Premium Chart for Sum Assured of Rs 1 Crore for different entry ages and different policy tenures or you can treat it as LIC Jeevan Shiromani Plan 947 Premium Calculator (2023) or the LIC Jeevan Shiromani Premium Chart for 2023:
- For a 30-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 20 years with premium payment term of 16 years, the annual premium will be Rs 7.24 lakh per year (including GST) to be paid yearly for 16 years.
- For a 30-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 18 years with premium payment term of 14 years, the annual premium will be Rs 8.14 lakh per year (including GST) to be paid yearly for 14 years.
- For a 30-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 16 years with premium payment term of 12 years, the annual premium will be Rs 9.44 lakh per year (including GST) to be paid yearly for 12 years.
- For a 30-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 14 years with premium payment term of 10 years, the annual premium will be Rs 11.24 lakh per year (including GST) to be paid yearly for 10 years.
- For a 40-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 20 years with premium payment term of 16 years, the annual premium will be Rs 7.59 lakh per year (including GST) to be paid yearly for 16 years.
- For a 40-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 18 years with premium payment term of 14 years, the annual premium will be Rs 8.46 lakh per year (including GST) to be paid yearly for 14 years.
- For a 40-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 16 years with premium payment term of 12 years, the annual premium will be Rs 9.73 lakh per year (including GST) to be paid yearly for 12 years.
- For a 40-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 14 years with premium payment term of 10 years, the annual premium will be Rs 11.51 lakh per year (including GST) to be paid yearly for 10 years.
- For a 50-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 16 years with premium payment term of 12 years, the annual premium will be Rs 10.48 lakh per year (including GST) to be paid yearly for 12 years.
- For a 50-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 14 years with premium payment term of 10 years, the annual premium will be Rs 12.2 lakh per year (including GST) to be paid yearly for 10 years.
- For a 55-year old purchasing a Rs 1 Crore sum assured LIC Jeevan Shiromani policy, for a tenure of 14 years with premium payment term of 10 years, the annual premium will be Rs 12.65 lakh per year (including GST) to be paid yearly for 10 years.
So that was the required premium as calculated using LIC Jeevan Shiromani Plan Premium Calculator.
Now we saw the LIC Jeevan Shiromani Premium Chart (2023) above. Now let’s see how much return does this policy offer which is often sold by agents as a unique LIC Plan for HNIs and rich NRIs.
LIC Jeevan Shiromani (Return Calculations 2023)
All said and done, as an investor you would always want to know as to what returns can you get from LIC Jeevan Shiromani Plan 947?
For this, we use LIC Jeevan Shiromani Plan Maturity Calculator along with a LIC Jeevan Shiromani Plan Example to better understand this.
Let’s take an example to understand this.
Here is the LIC Jeevan Shiromani Benefit Illustration:
Suppose a 40-year old person purchases Rs 1 crore LIC Jeevan Shiromani Plan with a tenure of 20 years and premium payment term of 16 years.
As we saw in the earlier section of LIC Jeevan Shiromani premium calculator, for this policy the annual premium will be Rs 7.59 lakh per year (including GST). This is a 20-year policy but the annual premium needs to be paid for 16 years only.
Now let’s calculate the maturity benefits for this LIC Jeevan Shiromani with Example.
Using the latest details of the plan and LIC Jeevan Shiromani Plan Maturity Calculator, we have the following benefits:
- Guaranteed Additions Calculation – The plan has pre-decided to offer Rs 50 per Rs 1000 of Sum Assured as Guaranteed Addition for the first 5 years. So for a Rs 1 crore policy, this comes to Rs 5 lakh each (50/1000 x Rs 1 crore) for the first 5 years. For the remaining 11 years of premium payment, you get Rs 55 per Rs 1000 of Sum Assured as Guaranteed Addition. So this comes to Rs 5.5 lakh each year from year 6 to 11. Since the guaranteed additions are not paid but accrue over the policy tenure, these will be available only on policy maturity. So at the time of policy maturity, total accrued Guaranteed Additions will be Rs 85.5 lakh for this LIC Shiromani Plan example.
- Loyalty Addition Calculation – The plan was launched in 2017 and hence, we are yet to see the actual loyalty bonus announcement as none of the plans would have completed the shortest tenure of 14 years till now. So we need to assume what the loyalty addition might be. Even if we look at various scenarios of loyalty additional ranging from Rs 100 per thousand to Rs 400 per thousand, the total final loyalty addition for Rs 1 crore policy after 20 years will come to Rs 10-40 lakh.
- We need to remember that the 20 year policy will pay 45%, i.e. Rs 45 lakh each time as moneyback in 16th and 18th year. On maturity of 20 years, the remaining 10%, i.e. Rs 10 lakh, plus guaranteed addition of Rs 85 lakh (calculated earlier) and loyalty addition of Rs 10-40 lakh will be paid together. So final maturity payout may range between Rs 1.05 crore to 1.35 crore. In additional, you would have already received Rs 90 lakh in total as moneyback from the policy.
Considering all the 3 points above in our LIC Jeevan Shiromani with Example illustration, if we calculate the IRR of the policy, then it will be in range of about 5-6.2% per annum pre-tax. The actual post-tax returns will be lower depending on when you have purchases the policy. If the policy had been purchased before 31st March 2023, the maturity and moneyback amounts would be tax-free. But as per the latest change in 2023 for life insurance maturity taxation, an individual will have to pay tax on the maturity amount of life insurance policies where the aggregate annual premium exceeds Rs 5 lakh.
Since the LIC Jeevan Shiromani policy is primarily a HNI focused policy with high sum assured and high premiums (generally more than Rs 7 lakh), the maturity payouts from this policy will always be taxed if you have purchased it from 1st April 2023 onwards.
So the 5-6.2% is the real pre-tax returns that you, which can reduce further due to taxation if we consider that as well in the LIC Jeevan Shiromani Calculator. This may be a far cry from what many commission-oriented LIC agents will tell you in order to sell the plan.
To be fair, 5-6% is not a great return on investment, that too from a long-term product with 15-20 year tenure. Also, even after paying such high premium of Rs 7.59 lakh per year, you just get a life insurance cover of Rs 1 Crore.
LIC Jeevan Shiromani: In-Built Critical Illness Benefit
LIC Jeevan Shiromani Plan also has an inbuilt critical illness benefit. On the first diagnosis of any one of the 15 Critical Illness as specified in the policy, the following benefits will be provided by the LIC:
- Lump Sum Benefit – The Inbuilt critical illness benefits equal to 10% of Basic Sum Assured will be payable. So for a policy with Basic Sum Assured of Rs 1 crore, one will get Rs 10 lakh if diagnosed with a specified critical illness.
- Additionally, there is an option to defer the payment of future premiums by 2 years. LIC will charge No interest for this genuine delay in payment of premium for such health reasons.
But do note that this Critical Illness benefit can be availed just once during the entire policy term and once availed, the benefit terminates.
How to purchase LIC Jeevan Shiromani Plan online?
Step-by-step process to buy LIC’s Jeevan Shiromani Plan Online:
- Log-on to LIC website (www.licindia.in) for buying this online product. Click on ‘Buy Policies Online’. Select plan Jeevan Shiromani Plan.
- Click on ‘Buy Online’. Choose your desired Purchase Price, Policy Variant, Annuity Payout Mode (Monthly/Quarterly/Half-yearly/Yearly), Date of Birth, Gender, Smoking status, etc.
- Enter other details such as Name, Address, Occupation, Qualification etc. displayed on the screen and complete the proposal form online.
- Pay premium online and fulfil the underwriting requirements, if any.
That’s how you can buy LIC Plan 947 online with rebates of about 2% on purchase amount.
How to surrender the LIC Jeevan Shiromani Plan?
You can surrender the LIC Jeevan Shiromani Plan provided that premiums of one full year is paid. On surrendering the LIC Jeevan Shiromani Plan, the surrender value is the higher of either Guaranteed Surrender Value or Special Surrender value shall be paid to the policyholder.
The Guaranteed Surrender Value payable during the tenure of the policy will be = Total premiums paid till the date of surrender X Guaranteed Surrender Value factor MINUS Any survival benefit due or payable.
The Guaranteed Surrender Factor is represented as a % determined by the policy term and the year of surrendering the policy.
In order to surrender the LIC’s Jeevan Shiromani policy the policyholder needs to visit the nearest office or branch of LIC and submit the original policy document along with completely filled discharge form. On receipt of such request LIC shall credit the surrender value in the bank account.
Should you invest in LIC Jeevan Shiromani plan in 2023?
That is the key question obviously after all the discussion, review of LIC Jeevan Shiromani Review, and analysis of plan and policy benefits.
While there is no doubt about LIC being synonymous with trust in India, should you buy LIC Jeevan Shiromani Plan (947)?
While it is pitched as a policy for the rich and HNIs (those who can afford to pay Rs 7-10 lakh annual premium for yeas), the fact is that like any other traditional moneyback plan, the investment returns are quite low at 5-6%. That too before taxes and will reduce further due to newly announced taxation of insurance policies with annual premiums above Rs 5 lakh if you use a LIC Jeevan Shiromani Plan 947 Premium Calculator with taxation. Also, the life cover provided may look large but its not cheap at all. You can very well get a larger cover in just a few thousand Rupees.
Hopefully, you would have found this LIC Jeevan Shiromani Plan Review (2023) of LIC’s popular Moneyback plan, which is often touted as the LIC Plan for HNIs, LIC Policy for HNIs, LIC Plan for rich NRIs or LIC Policy for rich NRIs (UIN – 512N315V02), useful. If you are considering this plan to invest in India, then I hope that LIC Jeevan Shiromani Plan Details and LIC Jeevan Shiromani Policy Benefits would be clear by now.