LIC Jeevan Shikhar is yet another endowment insurance plan from the stable of Life Insurance Corporation (LIC). The scheme is open for subscription and would be available for the next four months only after which the scheme would close for subscription.
Details of the LIC Jeevan Shikhar Plan:
1. The plan is currently open and would close less than 4 months from now.
2. This like most other LIC offerings is an endowment plan.
3. You pay the premium only once.
4. The insurance plan has a tenure of 15 years.
5. Minimum sum assured is Rs 1 lakh, while there is no maximum limit.
6. Individuals can avail a loan facility under the plan.
7. On death of the policy holder, the nominee would get the sum assured, in addition to loyalty bonus, if any.
8. Tax benefits under Sec 80C of the Income Tax Act.
Should you buy the LIC Jeevan Shikhar Insurance Plan?
There are several single policy premiums that have been launched by the Life Insurance Corporation of India in the past. They tend to give you returns, in the range of 4-6 per cent. What this means is that you could get returns of around this range, if you survive after the policy expires.
Death benefit would be paid up to 10 times the premium paid. This is the same as Unit Linked Insurance Plans (ULIPs) pay, which could be a much better proposition, since the investment could also be in equity dedicated funds for higher returns.
Any personal finance expert would never recommend a endowment insurance plan for insurance coverage, because the insurance coverage is really very low. The purpose of insurance, would be insurance and not investment.
Hence, those desiring to invest should look at other investment avenues, where they would get significantly higher returns. On the other hand those looking at insurance, should look at term plans, which offer very high coverage.
In present times, you should be concerned of providing security for your family and the best way would be to buy a term insurance plans.
Citing this with an example...
If you are aged about 30 and pay a premium of Rs 50,000 annually under the LIC , you could end up getting Rs 5 lakhs as insurance coverage should anything happen to you. This could hardly be sufficient, if there is a death of the holder and he is the only dependent.
Therefore, we would advise investors to take a proper term insurance and not buy the LIC Jeevan Shikhar.