The latest insurance plan by Life Insurance Corporation's (LIC) is Jeevan Pragati (table No 838) which is a non-linked, with profits plan which offers a combination of protection and savings.

This plan provides for automatic increase in risk cover after every five years during the term of the policy. In addition, this plan also takes care of liquidity needs through loan facility.

What is the eligibility conditions?

a) Minimum Basic Sum Assured: Rs. 1,50,000
b) Maximum Basic Sum Assured: No Limit
(The Basic Sum Assured shall be in multiples of Rs. 10,000/-)
c) Policy Term: 12 to 20 years
d) Minimum Age at entry: 12 years (completed)
e) Maximum Age at entry: 45 years (nearer birthday)
f) Maximum Maturity Age: 65 years (nearer birthday)

Note that under this plan the risk will commence immediately from the date of acceptance of the risk including minor lives.

Highlights of the plan LIC Jeevan Pragati (Table No 838):

• Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly mode (through ECS or through salary deductions) over the term of policy.
• If premiums are not paid within the grace period then the policy will lapse. A lapsed policy can be revived within a period of 2 consecutive years from the date of first unpaid premium but before the date of maturity.
• If at least three full years premium have been paid and any subsequent premiums be not duly paid, this policy shall not be wholly void, but shall continue as a paid-up policy
• The Sum Assured on Death under a paid-up policy shall be reduced to such a sum, called Death Paid-up Sum Assured and shall equal to {Sum Assured on Death * (no. of premiums paid / Total no. of premiums payable)}.
• The Sum Assured on Maturity under a paid-up policy shall be reduced to such a sum called Maturity Paid-up Sum Assured and shall be equal to {Sum Assured on Maturity * (no. of premiums paid / Total no. of premiums payable)}
• The policy can be surrendered provided at least three full years premiums have been paid. The Guaranteed Surrender value shall be percentage of total premiums paid.
• If the Life Assured (whether sane or insane) commits suicide at any time within 12 months from the date of commencement of risk and the Corporation will not entertain any claim except for 80% of the premiums paid, provided the policy is inforce.
• If the Life Assured (whether sane or insane) commits suicide within 12 months from date of revival, an amount which is higher of 80% of the premiums paid till the date of death or the surrender value, shall be payable. The Corporation will not entertain any other claim.

Conclusion

The only thing to consider in this plan is the death sum assured increases after every 5th year.

As this is an endowment plant which offers a combination of protection and savings, it does not serve any of the purpose. This is because the insurance coverage is really very low.

Individuals who are seeking as an investment 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.

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