LIC Jeevan Sugam Policy Review

Details, Review and Analysis about LIC Jeevan Sugam Policy.
LIC or Life Insurance Corporation of India, the largest insurance company of India, has recently come out with its new launch called "LIC Jeevan Sugam Policy". In this article, we will see whether this LIC Jeevan Sugam Policy offers anything new and unique, whether investors should consider this policy for investment or insurance or both (or none), whether this policy has any better competitor products available in the market which can be looked upon.

Introduction & Details about LIC Jeevan Sugam Policy
A cursory look at LIC Jeevan Sugam Policy offering tells that this is a single premium policy i.e. the investor needs to pay one time money to invest into this policy. This is a non-linked policy, which means your investments will not be of ULIP nature i.e. not linked to any market or stock specific returns.
However, please note that this is a limited period offering i.e. it will open for subscription during a limited period (45 days only, from the launch date).
On the returns side, this policy offers a sum assured return on maturity (on survival of investor) or death benefits (on unfortunate demise of the investor).

What are the benefits available in LIC Jeevan Sugam Policy?
Your benefits are linked to the amount of investments you make in this policy. The basic sum assured is claimed to be 10 times of the single invested amount.

The higher the investment amount, the better awards are promised. They even top it up with extra percentage offerings if the invested amount exceeds certain value (see details below).

Benefits are described for two situations - (1) Death Benefits - In case of Death of insured investor and (2) Maturity Benefits - In case of survival of insured investor. Let's see each of them seperately.

Review of LIC Jeevan Sugam Policy

Death Benefits in LIC Jeevan Sugam Policy
In case the investor dies before the maturity of the LIC Jeevan Sugam Policy, following benefits will be given to the nominee:

- On death during first five years of taking the policy:
Basic Sum assured i.e. 10 times the single premium (net of service tax) excluding any extra premium charged shall be payable.

- On death after completing five years of taking the policy:
Basic Sum assured i.e. 10 times the single premium (net of service tax) excluding any extra premium charged along with loyalty addition, if any, shall be payable.

So the speration line is 5 years and if the deceased investor completes 5 years, the loyalty addition amount will be given. No loyalty addition amount if investor dies before 5 years of policy completion.

What are the maturity benfits or survival benefits of LIC Jeevan Sugam Policy
On maturity, the Maturity Sum Assured along with Loyalty Addition, as applicable, shall be paid to the investor.

Loyalty Addition is a top-up reward which is usually available in many LIC policies and is given to investors and policy holders who complete the full policy term without any discontinuity - either in terms of policy premium payments or in terms of early withdrawl from the policy.
However, the problem is that it is an uncertain value which is not known to the investors upfront. It is paid only at the end of maturity period and is unknown. It can range from zero to any value, depending upon what LIC decides.

What is the policy investment period or policy term for LIC Jeevan Sugam Policy
The LIC Jeevan Sugam Policy has a term of 10 years.
The minimum investment needed is 6,000 Rs. (based on minimum sum assured of Rs. 60,000) and there in no limit on the maximum side.
Maturity Amount should be in multiples of Rs. 5000, that means invested amount should be in multiples of Rs. 500.

Please note that invested amount may be applicable for service tax deductions.

What are the premium rates for LIC Jeevan Sugam Policy?
LIC provides an indicative sample table for 1000 Rs. sum assured value based on the age of the investor.

Age at entry	Single Premium Rates (Rs.)
10	537.75
20	552.90
30	562.65
40	629.35

That means, a person who is 30 years old looking for 5 Lakh Rs. sum assured (Rs. 1000*500) should invest 562.65 * 500 = 281,325 Rs.

What are the other top-up options available under LIC Jeevan Sugam Policy?
LIC wants to attract more high value investments in this LIC Jeevan Sugam Policy, so they are offering top up benefits or incentives if someone invests big amounts. It is based on the maturity sum assured value.

Maturity Sum Assured	Increase in Maturity Sum Assured
Below Rs.150,000	Nil
Rs.150,000 to Rs. 399,999	3.50%
Rs.400,000 and above	4.50%

i.e. if someone wants to have 5 Lakh sum assured, he will get additional 4.5% on maturity.
Total payout on maturity = 5 Lakhs + 4.5% of 5 Lakhs as incentive + any loyalty bonus amount
= Rs. 522,500 + Loyalty Bonus

So in a nutshell, you invest 281,325 Rs. and forget it for 10 years. At the end you receive Rs. (522,500 + Loyalty Bonus).
Let's head over to Return Calculation for LIC Jeevan Sugam Policy and comparison with other (or better) products.