LIC’s Jeevan Azad (Table & LIC Plan 868) is a traditional, non-participating, endowment policy by LIC, which offers guaranteed, tax-free maturity proceeds. Should you buy this traditioanl endowment plan from LIC in 2023?
If you want to know more about this LIC Jeevan Azad Review (2023) article, then you will get to know all the LIC Jeevan Azad plan Details and more importantly, the LIC Jeevan Azad Policy Benefits here.
LIC had launched Jeevan Azad Plan (No. 868) for the first time in 2023 under the Plan UIN 512N348V01.
LIC Website link to Policy page – Link
Let’s see the features now.
Features of LIC Jeevan Azad (Table 868)
Now let’s have a look at the Policy Details of LIC Jeevan Azad policy or LIC Plan 868. The Eligibility Criteria of the LIC Jeevan Azad Plan and its features are listed below:
- What is LIC Jeevan Azad Plan? – LIC Jeevan Azad plan is a Non-Linked, Non-Participating, Individual, Savings & Life Insurance plan which offers a combination of life protection and savings.
- It is a limited premium traditional endowment policy.
- The policy provides a guaranteed lumpsum payout amount at the time of maturity. The policyholder can choose to receive this maturity amount in installments as well.
- The death benefit can also be claimed by the nominee as either lumpsum or in installments.
- The Minimum Entry Age for the policy is 90 days
- The Maximum Entry Age for the policy is 50 years
- The Minimum Maturity Age for the policy is 18 years
- The Maximum Maturity Age for the policy is 70 years
- The Policy Term is 15 years to 20 years. That is you can choose policy term as 15 years, 16 years, 17 years, 18 years, 19 years, and 20 years.
- The Premium Paying Term is dependent on the policy term. It is Policy Term – (minus) 8 years. So if you choose a 15-year policy, then the premium payment term will be 7 years. But if you go for a 20-year LIC Jeevan Azad policy, then the premium payment term will be 12 years. The premiums of the policy vary and we shall use LIC Jeevan Azad Calculator to see how premiums of the policy vary for different tenure and entry ages.
- The Minimum Sum Assured is Rs 2 lakh
- The Maximum Sum Assured is also low at just Rs 5 lakh. So if you want to take a cover of more than Rs 5 lakh, you can’t do it using just one policy. And even the total Basic Sum Assured under all policies issued to an individual under this LIC Jeevan Azad plan shall not exceed a total of Rs 5 lakh. So clearly, this policy doesn’t provide a large life insurance cover.
- Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly intervals (monthly premiums through NACH only) or through salary deductions.
- This plan offers the option to receive either maturity or death benefits in lump sum or installments.
Maturity Benefits of LIC Jeevan Azad (Plan 868)
When it comes to the maturity benefits of LIC Jeevan Azad Plan, its fairly simple. On successful completion of the policy tenure and if all the premiums are timely paid, the ‘Sum Assured on Maturity’ will be paid to the beneficiary.
There is a Settlement Option as well (for maturity benefit). Under this, the policyholder can choose to receive maturity benefits in installments over 5 years. The installments can be chosen as annually, half-yearly, quarterly, or monthly, subject to a minimum installment amount for different payment modes.
Death Benefits of LIC Jeevan Azad
The death benefit payable on the death of the policyholder or life assured during the policy tenure shall be “Sum Assured on Death” where “Sum Assured on Death” is defined as higher of:
- ‘Basic Sum Assured’ or
- ‘7 times of Annualized Premium’
- And this Death Benefit shall not be less than 105% of the “Total Premiums Paid” up to the date of death.
One has the option to give death benefits to nominee in installments over 5 years rather than in a single lump sum payment. The installments can be paid at intervals of annually, half-yearly, quarterly, or monthly, subject to a minimum installment amount for different payment modes.
Sample Premium Illustrations of LIC Jeevan Azad Plan (2023)
Here is the sample premium illustration of the LIC Jeevan Azad plan. The premiums given below are are calculated for a Basic Sum Assured of Rs 2 lakh with different ages and premium paying terms.
So if you were looking for LIC Jeevan Azad Premium Calculator, then here are all the premium related details of the policy –
- For a 10-year old person buying LIC Jeevan Azad policy with 15-year Policy Term and a 7-year Premium Paying Term, the annual premium will be Rs 17,679 per year plus taxes.
- For a 10-year old person buying LIC Jeevan Azad policy with 16-year Policy Term and a 8-year Premium Paying Term, the annual premium will be Rs 15,190 per year plus taxes.
- For a 10-year old person buying LIC Jeevan Azad policy with 17-year Policy Term and a 9-year Premium Paying Term, the annual premium will be Rs 13,279 per year plus taxes.
- For a 10-year old person buying LIC Jeevan Azad policy with 18-year Policy Term and a 10-year Premium Paying Term, the annual premium will be Rs 11,917 per year plus taxes.
- For a 10-year old person buying LIC Jeevan Azad policy with 19-year Policy Term and a 11-year Premium Paying Term, the annual premium will be Rs 10,692 per year plus taxes.
- For a 10-year old person buying LIC Jeevan Azad policy with 20-year Policy Term and a 12-year Premium Paying Term, the annual premium will be Rs 9682 per year plus taxes.
- For a 20-year old person buying LIC Jeevan Azad policy with 15-year Policy Term and a 7-year Premium Paying Term, the annual premium will be Rs 17,787 per year plus taxes.
- For a 20-year old person buying LIC Jeevan Azad policy with 16-year Policy Term and a 8-year Premium Paying Term, the annual premium will be Rs 15,288 per year plus taxes.
- For a 20-year old person buying LIC Jeevan Azad policy with 17-year Policy Term and a 9-year Premium Paying Term, the annual premium will be Rs 13,377 per year plus taxes.
- For a 20-year old person buying LIC Jeevan Azad policy with 18-year Policy Term and a 10-year Premium Paying Term, the annual premium will be Rs 12,015 per year plus taxes.
- For a 20-year old person buying LIC Jeevan Azad policy with 19-year Policy Term and a 11-year Premium Paying Term, the annual premium will be Rs 10,780 per year plus taxes.
- For a 20-year old person buying LIC Jeevan Azad policy with 20-year Policy Term and a 12-year Premium Paying Term, the annual premium will be Rs 9771 per year plus taxes.
- For a 30-year old person buying LIC Jeevan Azad policy with 15-year Policy Term and a 7-year Premium Paying Term, the annual premium will be Rs 17,846 per year plus taxes.
- For a 30-year old person buying LIC Jeevan Azad policy with 16-year Policy Term and a 8-year Premium Paying Term, the annual premium will be Rs 15,347 per year plus taxes.
- For a 30-year old person buying LIC Jeevan Azad policy with 17-year Policy Term and a 9-year Premium Paying Term, the annual premium will be Rs 13,446 per year plus taxes.
- For a 30-year old person buying LIC Jeevan Azad policy with 18-year Policy Term and a 10-year Premium Paying Term, the annual premium will be Rs 12,083 per year plus taxes.
- For a 30-year old person buying LIC Jeevan Azad policy with 19-year Policy Term and a 11-year Premium Paying Term, the annual premium will be Rs 10,858 per year plus taxes.
- For a 30-year old person buying LIC Jeevan Azad policy with 20-year Policy Term and a 12-year Premium Paying Term, the annual premium will be Rs 9849 per year plus taxes.
- For a 40-year old person buying LIC Jeevan Azad policy with 15-year Policy Term and a 7-year Premium Paying Term, the annual premium will be Rs 18,159 per year plus taxes.
- For a 40-year old person buying LIC Jeevan Azad policy with 16-year Policy Term and a 8-year Premium Paying Term, the annual premium will be Rs 15,670 per year plus taxes.
- For a 40-year old person buying LIC Jeevan Azad policy with 17-year Policy Term and a 9-year Premium Paying Term, the annual premium will be Rs 13,769 per year plus taxes.
- For a 40-year old person buying LIC Jeevan Azad policy with 18-year Policy Term and a 10-year Premium Paying Term, the annual premium will be Rs 12,436 per year plus taxes.
- For a 40-year old person buying LIC Jeevan Azad policy with 19-year Policy Term and a 11-year Premium Paying Term, the annual premium will be Rs 11,221 per year plus taxes.
- For a 40-year old person buying LIC Jeevan Azad policy with 20-year Policy Term and a 12-year Premium Paying Term, the annual premium will be Rs 10,231 per year plus taxes.
- For a 50-year old person buying LIC Jeevan Azad policy with 15-year Policy Term and a 7-year Premium Paying Term, the annual premium will be Rs 19,208 per year plus taxes.
- For a 50-year old person buying LIC Jeevan Azad policy with 16-year Policy Term and a 8-year Premium Paying Term, the annual premium will be Rs 16,719 per year plus taxes.
- For a 50-year old person buying LIC Jeevan Azad policy with 17-year Policy Term and a 9-year Premium Paying Term, the annual premium will be Rs 14,837 per year plus taxes.
- For a 50-year old person buying LIC Jeevan Azad policy with 18-year Policy Term and a 10-year Premium Paying Term, the annual premium will be Rs 13,524 per year plus taxes.
- For a 50-year old person buying LIC Jeevan Azad policy with 19-year Policy Term and a 11-year Premium Paying Term, the annual premium will be Rs 12,328 per year plus taxes.
- For a 50-year old person buying LIC Jeevan Azad policy with 20-year Policy Term and a 12-year Premium Paying Term, the annual premium will be Rs 11,358 per year plus taxes.
Some people have confusion about Will premium amount change during the tenure of the policy after they have bought the plan? The answer is No. Once the policy is issued, the annual premium will remain the same for the entire tenure of the policy if premiums are paid regularly within due date.
So that was how to find out the premium using LIC Jeevan Azad Premium Calculator if you are planning to purchase this LIC Jeevan Azad 868 Plan.
How much Returns does Jeevan Azad (LIC Plan 868) offer?
How much will the maturity benefit of the Jeevan Azad LIC Plan and how much returns can you expect?
This is a simple plan which simply pays the sum assured if you survive the policy term. There are no additional bonuses or benefits. So if you were to use a LIC Jeevan Azad Maturity Calculator to assess how much maturity amount you will get, then you will always get the answer that your maturity amount will be exactly equal to your sum assured at the time of purchasing the Jeevan Azad policy.
Let us use an example from the LIC brochure itself.
Suppose you are a 30-year-old person who buys LIC Jeevan Azad policy of Rs 2 lakh sum assured and opts for a 20-year policy. In this case, your premium paying term will be 12 years. Based on LIC Jeevan Azad Premium Chart above, we know that the annual premium will be Rs 9849 per year and this premium has to be paid only for the first 12 years. After that in 20th year, the policy will mature and pay Rs 2 lakh as sum assured maturity benefit.
Now let’s try to calculate the returns generated by this LIC Jeevan Azad example. For this we need to calculate the returns or IRR of Jeevan Azad plan.
- Age 30 (in Year 1 of Policy), the Premium Paid is (-) Rs 9849
- Age 31 (in Year 2 of Policy), the Premium Paid is (-) Rs 9849
- Age 32 (in Year 3 of Policy), the Premium Paid is (-) Rs 9849
- Age 33 (in Year 4 of Policy), the Premium Paid is (-) Rs 9849
- Age 34 (in Year 5 of Policy), the Premium Paid is (-) Rs 9849
- Age 35 (in Year 6 of Policy), the Premium Paid is (-) Rs 9849
- Age 36 (in Year 7 of Policy), the Premium Paid is (-) Rs 9849
- Age 37 (in Year 8 of Policy), the Premium Paid is (-) Rs 9849
- Age 38 (in Year 9 of Policy), the Premium Paid is (-) Rs 9849
- Age 39 (in Year 10 of Policy), the Premium Paid is (-) Rs 9849
- Age 40 (in Year 11 of Policy), the Premium Paid is (-) Rs 9849
- Age 41 (in Year 12 of Policy), the Premium Paid is (-) Rs 9849
- Age 42 (in Year 13 of Policy), there is no premium to be paid. Hence Rs 0
- Age 43 (in Year 14 of Policy), there is no premium to be paid. Hence Rs 0
- Age 44 (in Year 15 of Policy), there is no premium to be paid. Hence Rs 0
- Age 45 (in Year 16 of Policy), there is no premium to be paid. Hence Rs 0
- Age 46 (in Year 17 of Policy), there is no premium to be paid. Hence Rs 0
- Age 47 (in Year 18 of Policy), there is no premium to be paid. Hence Rs 0
- Age 48 (in Year 19 of Policy), there is no premium to be paid. Hence Rs 0
- Age 49 (in Year 20 of Policy), there is no premium to be paid. Hence Rs 0
- Age 50, the policy matures and pays (+) Rs 2 lakh
If you calculate the IRR of this scenario to simulate LIC Jeevan Azad Maturity Calculator, the returns come to a pathetic 3.8% per cent only! Yes, it is that low. So that was a Jeevan Azad with an Example, which after our IRR Analysis of LIC Jeevan Azad plan, clearly shows how poor returns this policy generates which is nowhere near even the Bank FD interest rates. There are several other better return-yielding investment alternatives than this plan, even if we were to consider the taxation of the maturity amount.
Tax Benefits on LIC Jeevan Azad Plan
The premiums paid for LIC Jeevan Azad are exempted from tax under the Section 80C. The maturity benefit as well as the death benefit amounts are also exempted and are tax-free under the Section 10D(D) of the Income Tax Act, 1961.
Optional Riders Under LIC Jeevan Azad Plan
LIC Jeevan Azad offers several optional riders, through which the policyholder can add to their coverage by paying an additional premium:
- LIC Accidental Death & Disability Benefit Rider – In the event of an accident, the Accident Benefit Sum Assured will be paid in a lump sum to the beneficiary. Whereas in the case of disability, arising out of an accident within 180 days from the date of the accident, an amount equal to the Accident Benefit Sum Assured will be paid in equal monthly installments for 10 years. All future premiums will be waived in the event of accidental disability arising from an accident.
- LIC Accident Benefit Rider – In case of accidental death, the Accident Benefit Sum Assured will be paid in lump sum along with the death benefit of the base plan.
- LIC Premium Waiver Benefit Rider – Under this rider, on the death of the policyholder, the pending premiums of the base policy that are due on and after the date of death till the expiry of the rider term shall be waived.
Other Important Points of LIC Jeevan Azad Plan
- Grace period – A grace period of 30 days shall be allowed for the LIC Jeevan Azad policyholder who chose a payment method of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums payment policyholders from the date of the First Unpaid Premium.
- Revival – If the premiums are not paid within the grace period by the LIC Jeevan Azad policyholder, then the policy will lapse. A lapsed policy can be revived, within 5 consecutive years from the date of the First Unpaid Premium.
- Paid-up – If after at least two full years’ premiums have been paid and any subsequent premiums are not duly paid, this policy shall not be wholly void but shall become a paid-up policy till the end of the policy term. The Sum Assured on death & Sum Assured on Maturity shall be reduced proportionately. This is arrived at by multiplying the respective figure with the ratio of the total period for which premiums have already been paid bears to the maximum period for which premiums were originally payable. If less than 2 full years’ premiums have been paid and any subsequent premium is not duly paid, all the benefits under this LIC Jeevan Azad policy shall cease after the expiry of the grace period from the date of the First Unpaid Premium and nothing shall be payable.
- Free Look Period – If the Policyholder is not satisfied with the Terms and Conditions of the policy, the policy may be returned within 15 days from the date of receipt of payment. If the policy was purchased through distance mode or online, then the free-look period will be extended up to 30 days.
- Loan Facility – The plan provides the policyholder with a loan facility, wherein, one can avail loans provided at least two full years’ premiums have been paid.
Surrender of LIC Jeevan Azad
One can surrender the policy at any time only if all the premiums are paid for 2 years consecutively.
On surrendering the plan, LIC will pay a surrender value equal to special surrender value or the guaranteed surrender value, whichever of them is higher. The Guaranteed Surrender Value = Total premiums paid * Applicable Guaranteed Surrender Value factor.
How to purchase LIC Jeevan Azad Plan online?
Step-by-step process to buy LIC’s Jeevan Azad Plan Online:
- Log-on to LIC website (www.licindia.in) or using this link, for buying this online product. Click on ‘Buy Policies Online’. Select plan LIC Jeevan Azad 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 868 online with rebates of on purchase amount.
Should you buy LIC’s Jeevan Azad (Plan 868) in 2023?
LIC Jeevan Azad is a typical traditional endowment plan by LIC where you pay are supposed to premiums for a limited time & then at maturity, you receive a lump sum amount as the maturity benefit. You also get a small life cover during the policy term period. As we saw in the return analysis, it comes below 4% IRR. There is no loyalty addition or any other bonus for this policy and hence, the returns of this plan are even lower than many other endowment plans of LIC which receive bonuses regularly. And even the maximum sum assured is a small Rs 5 lakh, which is of no use to anyone who is looking for life insurance cover. For life insurance, best option is a simple term plan and as I have maintained earlier, avoid mixing investment and insurance.
Hopefully, you would have found this LIC Jeevan Azad Review of LIC’s newly launched endowment plan (UIN – 512N348V01) useful and the policy details and LIC Jeevan Azad Policy Benefits (2023) would be clear by now. But please make sure you understand and assess the suitability of this low-return, small life cover product first.