LIC is launching a new plan called Jeevan Labh Table No.836. This plan will be available from 4th January, 2016. This is a tax saving season. So targeting this, LIC is launching this new plan. Let us see what Labh (Profit) it gives you.

Jeevan Labh (Table No.836) is a limited premium paying, non-linked, with-profits endowment plan that offers a combination of protection and savings. Therefore, this is a typical endowment plan. The only difference is the limited premium payment. This is a typical insurance cum investment plan of LIC.

Features of Jeevan Labh (Table No.836)

• Minimum Sum Assured is Rs.2, 00,000. There is no maximum basic sum assured limit.
• Policy term will be 16 years, 21 years of 25 years.
• The premium paying term will be 10 Years (for 16-year policy term), 15 years (for 21-year policy term), and 16 years (for 25 year policy term).
• Minimum age at entry is 8 Years.
• Maximum age at entry is 59 Years (for 16-year policy term), 54 years (for 21 year policy term) and 50 Years (for 25 year policy term).
• You can pay the premium as yearly, half-yearly, quarterly, or monthly mode.
• If you pay yearly premium, then you will get rebates of 2% in premium payment and for half-yearly premium rebate will be 1%.
• No rebate for quarterly or monthly payments.
• If you have opted for sum assured of Rs.15 lakh or more, then the rebate will be 1.75%, for Rs.10 lakh to Rs.14, 90,000 the rebate is 1.5% and for Rs.5 lakh to Rs.9, 90,000 the rebate is 1.25%.
• You can avail the loan facility also.
• This plan offers two riders. One is Accidental Death and Disability Benefit Rider and another is New Term Assurance Rider.

Benefits of Jeevan Labh (Table No.836)

Maturity Benefit–

The Sum Assured+Bonus+Final Additional Bonus will be payable at maturity as a lump sum.

Death Benefit–

"Sum Assured on Death", vested Simple Reversionary Bonuses and Final Additional bonus, if any, shall be payable.

Sum Assured on Death-Higher of 10 times of annualised premium or Absolute amount assured to be paid on death i.e. Basic Sum Assured. This death benefit shall not be less than 105% of all the premiums paid as of the date of death.

Who can buy this plan?

• You can buy this plan if you are satisfied with returns of around 5% to 6%. This leads to a negative real return. Real return means return on investments minus the inflation rate. If the return from this plan is 5% or 6% and inflation rate is 7%, then the real return will be -2% to -1%.
• You can buy this plan if you feel your family depends can survive financially without you. Because this plan is a typical endowment plan where the concentration is neither an insurance nor investment need. Therefore, you lack the ideal life protection coverage. One must have life insurance of at least 15-20 times of his or her yearly income. Hard to buy that much of insurance coverage from this plan, as the premium will be high. So you satisfy yourself by investing the amount which is feasible for you. This leads to lower insurance coverage.
• You can buy this plan if your agent is luring you for tax saving purpose. But do remember that the investment without financial goal is dangerous than no investment.
• If your family member or someone who is dear to you is an agent, then to satisfy him (his business), you can definitely buy this plan. He will be happy as without a single rupee investment, he will earn around 35% first year commission and after that around 5% to 6% commission every year. So ultimately, he will be richer than you will.

My take on this plan–

What is new in this plan? The only new part I can say is the limited premium payment option. Other than this, nothing special. It is a typical endowment plan where even by investing for long term, one can expect a negative real return.

Simply by buying a term plan (from LIC itself) and investing in a debt product like PPF will give you more return, same tax benefits, and flexibility than this product.

Apart from this, your agents may lure you by saying the riders available in this plan. Simply avoid it. Instead, I suggest you to buy the accidental insurance separately from general insurance companies than clubbing with this product as a rider.

There is nothing special to review it or concluded that this is one of BEST product LIC launched. This plan is especially launched in January month to target the tax saving salaried.

Take any example for any age; the return from this plan will not be more than 7%. Your agent may show you the benefit in such a way that it may be around 10%. How? He will include the benefit you availed by investing in this plan and then the maturity amount. This is very wrong. If that is the case, then PPF will be on the higher side with the same tax benefits.

I know many agents when it comes to investment they tilt their conversation towards the importance of insurance. When it comes to insurance, they tilt as an investment product, which gives you some returns. However, do remember the Govt launched Pradhan Mantri Jeevan Jyoti Bima Yojana is far better and serves the pure insurance need than this product.