The LIC Jeevan Labh Plan 736 is a non-linked, participating, endowment plan that combines life insurance with savings. Designed for individuals looking for comprehensive coverage with a built-in investment element, this plan offers the dual benefit of life cover during the policy term and a lump sum payout at maturity to help the policyholder meet future financial goals. As a participating policy, it also offers bonus facilities, which can further enhance the policyholder’s returns over the course of the policy.
This endowment policy is particularly suitable for individuals who want to ensure financial protection for their family while building a corpus over time. The policy is flexible, allowing policyholders to select their desired sum assured, policy term, and premium payment options. Furthermore, the plan’s ability to accumulate bonuses enhances its value, making it an attractive choice for those seeking both life protection and investment growth.
In this article, we will delve into the various features and benefits of the LIC Jeevan Labh Plan 736, explain how it works with an example, and provide a complete understanding of how this plan can help you secure your future financially.
1. Introduction to LIC Jeevan Labh Plan 736
The LIC Jeevan Labh Plan 736 is a non-linked, participating, endowment plan that provides a combination of protection and savings. The policy is designed to meet various financial needs, such as providing for children’s education, buying a home, or securing a retirement fund.
As a participating policy, the LIC Jeevan Labh Plan 736 allows the policyholder to participate in the corporation’s bonus scheme, which may help increase the policy’s payout at the end of the policy term. The plan offers both death benefits (to protect the family in case of the policyholder’s untimely demise) and maturity benefits (to reward the policyholder for long-term investment).
Key aspects of the plan include:
- Life cover for the policyholder’s family in case of untimely death.
- Maturity benefit that includes the sum assured along with bonuses.
- Tax benefits under sections 80C and 10(10D) of the Income Tax Act, making it a tax-efficient investment.
2. Key Features of LIC Jeevan Labh Plan 736
The LIC Jeevan Labh Plan 736 comes with several distinctive features, which include:
a. Policy Term and Premium Payment Term
- Policy Term: The policyholder can choose a policy term of 16, 21, or 25 years.
- Premium Payment Term: The premium payment term is usually chosen based on the policy term. For example:
- If the policy term is 16 years, the premium payment term can be 10 or 12 years.
- If the policy term is 21 years, the premium payment term can be 15 or 16 years.
- If the policy term is 25 years, the premium payment term can be 20 or 25 years.
This flexibility allows policyholders to select a premium payment term that suits their financial planning.
b. Sum Assured on Death
In case of the policyholder’s death during the policy term, the policy provides a sum assured on death. The sum assured on death is the higher of the following:
- Basic sum assured (chosen at the time of policy purchase).
- 125% of the annual premium (based on the sum assured).
This ensures that the family of the policyholder is financially protected in case of an untimely demise. Additionally, any bonuses that may have accumulated will also be paid out along with the death benefit.
c. Maturity Benefit
If the policyholder survives the entire policy term, the maturity benefit will be paid at the end of the term. This benefit consists of:
- Sum Assured on Maturity: The sum assured chosen at the time of policy purchase.
- Bonuses: Any reversionary bonuses declared by LIC during the policy term will be added to the sum assured at maturity. These bonuses are paid as an additional sum over and above the sum assured.
- Final Additional Bonus (FAB): In some cases, a lump sum FAB may be provided, depending on the performance of LIC’s portfolio during the policy term.
The maturity benefit helps the policyholder achieve long-term financial goals, such as funding a child’s education, buying property, or planning for retirement.
d. Bonus Facility
The LIC Jeevan Labh Plan 736 is a participating policy, which means it is eligible to receive bonuses. These bonuses are declared annually based on the performance of the Life Insurance Corporation. The types of bonuses available with this policy are:
- Reversionary Bonuses: These bonuses are declared yearly and are added to the sum assured. They are payable either on death or at maturity.
- Final Additional Bonus (FAB): This is a lump sum bonus that may be declared at the time of policy maturity or in the event of the policyholder’s death. The FAB is paid as an additional benefit on top of the sum assured and reversionary bonuses.
Although the bonus is not guaranteed, it adds to the overall value of the policy, increasing the maturity benefit over time.
e. Tax Benefits
The LIC Jeevan Labh Plan 736 provides the policyholder with several tax benefits under the Income Tax Act:
- Section 80C: The premiums paid towards the policy are eligible for tax deductions up to ₹1.5 lakh per year.
- Section 10(10D): The death benefit and maturity benefit are exempt from income tax under Section 10(10D) of the Income Tax Act, subject to conditions.
This makes the policy an attractive option for tax-conscious investors looking to reduce their taxable income while securing their future.
f. Loan Facility
The policy allows the policyholder to avail of a loan against the surrender value of the policy. This feature provides financial flexibility to policyholders, enabling them to access funds in times of emergency or need, without surrendering the policy. The loan amount is generally up to 90% of the surrender value.
g. Paid-Up Option
If the policyholder is unable to continue paying the premiums due to financial constraints, they can opt for the Paid-Up option. Under this option, the policy will continue with a reduced sum assured, but the policyholder will not be required to pay further premiums. The policyholder will still be entitled to the accumulated bonuses and the reduced death benefit or maturity benefit.
3. Eligibility Criteria for LIC Jeevan Labh Plan 736
To be eligible for the LIC Jeevan Labh Plan 736, the following criteria must be met:
- Minimum Age of Entry: 8 years (completed).
- Maximum Age of Entry: 59 years (for a policy term of 25 years).
- Minimum Sum Assured: ₹2,00,000.
- Maximum Sum Assured: No upper limit, subject to underwriting.
- Premium Payment Modes: Premiums can be paid annually, semi-annually, quarterly, or monthly.
4. Benefits of LIC Jeevan Labh Plan 736
The LIC Jeevan Labh Plan 736 offers a range of benefits that make it an attractive option for individuals looking for both life insurance and savings. These benefits include:
a. Comprehensive Financial Protection
The plan provides life cover for the policyholder’s family in case of the policyholder’s untimely demise. This ensures that the family is financially secure, with the sum assured and accumulated bonuses paid out.
b. Flexible Premium Payment
The flexibility in choosing the premium payment term and policy term allows policyholders to tailor the policy to suit their financial situation and long-term goals. Whether you want to pay premiums for a shorter period or align the policy term with a specific life goal, this plan provides the necessary flexibility.
c. Lump Sum Payout at Maturity
The maturity benefit, which includes the sum assured and bonuses, helps policyholders achieve their financial goals. The lump sum amount can be used to pay for children’s education, retirement, buying property, or other long-term expenses.
d. Bonus Participation
The policy’s bonus feature adds value to the policy over time. With reversionary bonuses and the potential for a final additional bonus, policyholders can see their investment grow over the years.
e. Loan Facility
The availability of a loan against the policy’s surrender value ensures that policyholders can access funds in times of need without surrendering the policy.
f. Tax Savings
The tax benefits under Sections 80C and 10(10D) make the LIC Jeevan Labh Plan 736 an attractive option for those looking to save on taxes while securing their future.
5. How LIC Jeevan Labh Plan 736 Works: An Example
Let’s consider an example to better understand how the LIC Jeevan Labh Plan 736 works in real life.
Example:
Suppose Mr. Raghav, aged 35, purchases the LIC Jeevan Labh Plan 736 for himself, with the following parameters:
- Sum Assured: ₹10,00,000.
- Policy Term: 21 years.
- Premium Payment Term: 16 years.
- Annual Premium: ₹50,000.
Breakdown of Benefits:
- Death Benefit: If Mr. Raghav were to pass away in the 10th year, his family would receive the sum assured on death (₹10,00,000) along with the accumulated bonuses (if any).
- Maturity Benefit: If Mr. Raghav survives the entire policy term (21 years), he will receive the sum assured on maturity (₹10,00,000) along with any reversionary bonuses and a potential final additional bonus. Assuming the policy accumulates ₹5,00,000 in bonuses over the term, his maturity benefit would be ₹15,00,000.
- Tax Benefits: Mr. Raghav can claim a tax deduction of up to ₹1.5 lakh on the premiums paid under Section 80C of the Income Tax Act. Additionally, the maturity benefit is tax-free under Section 10(10D).
6. Conclusion
The LIC Jeevan Labh Plan 736 is a well-structured endowment plan that provides life insurance coverage along with a savings component. It allows policyholders to secure their financial future while also receiving a lump sum payout at maturity. The policy’s flexibility in premium payments, coupled with bonus participation, makes it a compelling choice for individuals looking to balance insurance and investment.
By offering a comprehensive suite of benefits, including tax advantages, the LIC Jeevan Labh Plan 736 is an attractive option for those seeking to achieve their long-term financial goals while ensuring financial protection for their family.