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Should You Buy The LIC New Jeevan Umang Policy?
LIC's new Jeevan Umang Policy available in the market from today is a whole life assurance plan. The plan is similar to the earlier Jeevan Tarang product which is closed for sale.
LIC's new Jeevan Umang Policy available in the market from today is a whole life assurance plan. The plan is similar to the earlier Jeevan Tarang product which is closed for sale. Here's a -take on the new insurance product with respect to eligibility, features and benefits.
Eligibility
The plan can be subscribed by a child of 90 days to an individual aged 55 years. Policy payment term shall be 100 minus the age of the insured at the time of buying the policy. Premium payment term can be either 15, 20, 25 or 30 years.
Minimum sum assured value for the insured is Rs. 2 lakh with no cap on the maximum sum assured amount.
Features
New Jeevan Umang plan of the LIC offers life -long cover uptil the age of 100 years. Regular bonus payout throughout the term of the policy i.e. until 100 years (maximum policy term) with additional bonus at maturity if any.
Available Rider Options
1. Accidental death and disability benefit rider
2. Accidental benefit rider
3. New Term Assurance Rider
4. New Critical illness Benefit Rider
Benefits
Suitable to meet retirement needs, the new plan offers a guaranteed payout of 8% of the Sum Assured value on an annual basis after the final premium is tendered till 99 years of age.
Maturity benefit is payable as lump sum amount equal to sum assured value plus bonus amount and final additional bonus (FAB) if any.
Death benefit is payable in case the insured passes away during the policy term. In case the insured dies before the commencement of risk cover, the premium amount paid until that time with no interest amount shall be payable.
Conclusion
The new Jeevan Umang plan of LIC is a mix of whole life endowment and money back plan with poor returns as bonus shall also be marginal as its not a pure whole life plan. We have always maintained that a term policy is better than an endowment policy. The reason you take an insurance is to protect your family. Endowment plans do not provide adequate insurance, which is a big worry. Another worry is that returns are largely poor. So, the ideal strategy would be if you want returns to buy any other instrument like mutual funds and buy a propert term insurance policy, which also covers you in case of critical illness.
