Achieving personal milestones imbues life with greater meaning. However, these milestones often bring additional responsibilities, expenses, and the weight of uncertainties. In such cases, a life insurance-cum-savings plan, such as LIC Jeevan Labh and HDFC Life Sanchay Plus, can assist in completing goals while providing protection for the family’s future against unforeseen events.
Since both plans combine the benefit of savings and insurance components, they inculcate a habit of disciplined saving amongst the insured members and offer a more holistic financial solution. The death benefit provides a lump sum amount that can cover immediate expenses and replace lost income. In addition, a portion of the premium paid to LIC Jeevan Labh and HDFC Life Sanchay Plus goes towards building a savings or investment component, which can accumulate over time and serve as a valuable source of funds for future financial goals, such as education, home purchase, or retirement.
Comparing LIC Jeevan Labh and HDFC Life Sanchay Plus requires careful consideration of their features and benefits, which will be carried out in this post for a better decision!
Comparison Between LIC Jeevan Labh & HDFC Life Sanchay Plus
| Parameters | LIC Jeevan Labh | HDFC Life Sanchay Plus |
| Entry Age | Minimum: 8 Years Maximum: 59 Years (For PT 16 Years), 54 Years (For PT 21 Years), 50 Years (For PT 25 Years) | 30 Days To 65 Years |
| Policy Term | 16/21/25 Years | 5 To 20 Years |
| Premium Paying Term | 10/15/16 Years | 5 To 12 Years |
| Maximum Maturity Age | 85 Years | |
| Plan Options | Not Available |
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| Rider Options |
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| Loan Facility |
| 80% Of Surrender Value |
| Maturity & Death Benefits | Available | |
| Payment Of Premiums | Yearly, Half-Yearly, Quarterly, Monthly | Single Pay, Annual, Half-Yearly, Quarterly, Monthly |
| Tax Benefits | The calculation of benefits payable under the plan will not take into account the amount of tax paid. | You may be eligible for tax benefits in accordance with the current tax regulations. |
| Grace Period | For Monthly Mode: 15 Days For Other Modes: 30 Days | |
| Free-Look Period | 15-30 Days | |
Information About LIC Jeevan Labh
The Jeevan Labh plan from LIC is a limited premium endowment plan that promises financial protection to policyholders and their family members. It provides a blend of security and savings, ensuring both protection and efficient money-saving opportunities.
Additionally, this participating, non-linked, individual, life assurance, and savings plan provides bonuses that augment the ultimate returns entitled to the customer. A noteworthy feature of the plan is that it offers a loan facility to its customers, which can cater to urgent liquidity needs.
Information About HDFC Life Sanchay Plus
The Sanchay Plus from HDFC Life is an insurance policy that combines protection and savings. It is a non-linked, non-participating plan that offers flexibility in terms of premium payment options, policy terms, and premium payment terms.
At the end of the policy term, the plan provides a maturity benefit, which includes the accumulated savings along with any applicable bonuses or returns. In case of the unfortunate death of the insured, the plan also offers a death benefit to the nominee. HDFC Life Sanchay Plus is well-suited for individuals in search of a blend of reliable returns and comprehensive insurance coverage.
What Are The Main Features & Advantages Of LIC Jeevan Labh?
Here are some key features and benefits of LIC Jeevan Labh policy:
Death Benefit:
If the policyholder passes away, the assigned beneficiary of the Jeevan Labh policy from LIC is eligible to receive the sum assured on death along with any declared bonuses. The sum assured on death is calculated as either seven times the annual premium or the absolute sum assured, whichever amount is higher.
Additionally, there is an option for the policyholder to choose that the death benefit be paid to the assigned beneficiary in installments instead of a lump sum. It is also assured that the death benefit will equal at least 105% of the total amount of premiums paid.
Maturity Benefit:
The plan provides a guaranteed maturity benefit on survival, which includes ‘Sum Assured on Maturity’, ‘Simple Reversionary Bonuses’, and ‘Final Additional Bonus’, if any. The payment can be received either as a lump sum or in installments over 5 years, 10 years, or 15 years.
Limited Premium Payment:
LIC Jeevan Labh is a limited premium payment plan, meaning policyholders pay premiums for a specific period. Once this period is completed, the policy remains in force for the entire policy term, providing coverage without the ongoing obligation of premium payments.
Rider Benefits:
The plan also offers various riders along with several benefits. These rider options can be purchased by the customers to enhance their policy coverage and include coverage for critical illness, accidental death, accidental disability, and more.
Amazing Rebates:
Policyholders who opt for a higher sum assured or coverage amount in the LIC Jeevan Labh plan may be eligible for a premium rebate. The rebate percentage typically falls between 1.25% and 1.75% of the basic sum assured. This incentive aims to encourage individuals to select higher coverage levels while simultaneously reducing their premium amounts.
Additionally, the plan offers rebates based on the chosen premium payment frequency. Policyholders who choose the yearly or half-yearly premium payment mode may qualify for a rebate. However, selecting the quarterly mode, monthly mode, or salary deduction method may result in a higher premium compared to other payment frequency options.
Profit Participation:
LIC Jeevan Labh is a participating plan that allows policyholders to participate in the profits of the corporation through bonuses. Bonuses declared by LIC contribute to the overall returns of the policy.
Main Features & Advantages Of HDFC Life Sanchay Plus
The HDFC Life Sanchay Plus plan offers several appealing features and benefits, including the following:
Single-Pay Option:
Unlike many life insurance policies that offer four general premium payment modes (yearly, half-yearly, quarterly, and monthly), the Sanchay Plus plan from HDFC Life provides a single-pay option. This means policyholders have the flexibility to pay the entire premium amount in a lump sum upfront, eliminating the need for ongoing premium transactions and reducing the risk of missed payments.
10 Years Deferment Period:
The deferment period refers to the timeframe during which the insured individual, known as the life assured, is unable to work until benefit payments from the insurance policy commence. The Sanchay Plus plan from HDFC Life offers a longer deferment period of up to 10 years.
This extended period allows individuals to engage in comprehensive financial planning, accumulate savings, and make investments, enabling them to be more financially independent during the initial period of inability to work.
4 Attractive Plan Options:
The HDFC Life Sanchay Plus plan offers four plan options, providing policyholders with flexibility in choosing their desired benefits:
- Guaranteed Maturity: Under this option, the maturity amount is paid as a lump sum after the completion of the policy term.
- Guaranteed Income: With this option, the maturity benefit is provided as a guaranteed income over a specified period following the conclusion of the policy term.
- Life Long Income: This option offers a maturity benefit in the form of a guaranteed income until the age of 99 after the policy term concludes.
- Long-Term Income: Under this option, the maturity benefit is issued as a guaranteed income for a set duration after the policy term’s conclusion. The fixed income payout extends over a longer period compared to the “Guaranteed Income” option.
Optional Riders:
Policyholders have the opportunity to enhance their Sanchay Plus by HDFC Life by purchasing optional riders, which are available for an additional premium. These riders include:
- HDFC Life Income Benefit On Accidental Disability Rider: In the event of Accidental Total Permanent Disability, this rider provides a monthly benefit equal to 1% of the Rider Sum Assured for the subsequent 10 years.
- HDFC Life Critical Illness Plus Rider: If the policyholder is diagnosed with any of the 19 listed critical illnesses and survives for 30 days following the diagnosis, a lump sum benefit equivalent to the Rider Sum Assured will be paid.
It’s important to note that these riders do not include a maturity benefit but offer additional coverage and financial protection against specific risks and events.
Guaranteed Benefits:
The HDFC Life Sanchay Plus plan provides guaranteed benefits in terms of both maturity and death benefits, depending on the plan option chosen by customers. Here are the details of the benefits:
Maturity Benefits:
- Guaranteed Income: Policyholders will receive a guaranteed income for 10/12 years.
- Guaranteed Maturity: It includes the ‘Sum Assured on Maturity’ along with accrued ‘Guaranteed Additions’.
- Lifelong Income Option: This option offers a guaranteed income for 99 years, along with the return of total premiums at the end of the payout period.
- Long-Term Income Option: Policyholders will receive a guaranteed income for 25/30 years.
Death Benefits:
The ‘Sum Assured on Death’ for all plan options will be the highest of the following:
– 10 times the ‘Annualized Premium’ or 1.25 times the ‘Single Premium’.
– 105% of the ‘Total Premiums Paid’.
– Guaranteed Sum Assured on Maturity.
– The accumulated ‘Premiums Paid’ with an interest rate of 5% per annum compounded annually.
– A guaranteed sum equivalent to the assured sum payable upon the insured individual’s death.
Enhanced Benefits For High Premium:
For policy options with an annual or single premium exceeding Rs. 1.5 lakhs, the plan offers additional benefits such as extra maturity benefits and annual additional income. For example, if policyholders have paid between Rs. 3 lakhs and Rs. 5 lakhs, the following benefits apply:
- Guaranteed Maturity Option: 0.50% of the Total Maturity Benefit payable as an Additional Maturity Benefit.
- Lifelong Income/Long-Term Income Option: 0.60% of the Annualized Premium as Annual Additional Income.
- Guaranteed Income: 0.50% of the Annualized Premium as Annual Additional Income.
For more detailed information, please refer to the policy brochure provided by HDFC Life Sanchay Plus.
Benefits Calculation Of LIC Jeevan Labh & HDFC Life Sanchay Plus
In this section, we will provide an illustration of the benefits offered by the two plans based on various factors.
LIC Jeevan Labh:
Let’s take the example of Mr. Y, a 30-year-old healthy male, who has purchased the policy with the following details:
- Policy Term: 25 Years
- Premium Payment Mode: Yearly
- Premium Payment Term 16 Years
- Premium Amount: Rs. 9,134
- Basic Sum Assured: Rs. 2 Lakhs
The benefits offered by the plan are as follows:
| End Of Year | Total Premiums Paid Till The End Of The Year (In Rs.) | Guaranteed Benefits (In Rs.) | Total Maturity Benefits Including Final Additional Bonus (If Any) + Simple Reversionary Bonus (In Rs.) | Total Death Benefits Including Final Additional Bonus (If Any) + Simple Reversionary Bonus (In Rs.) | |||
| Sum Assured On Maturity | Sum Assured On Death | @4% | @8% | @4% | @8% | ||
| 5 | 45,670 | 0 | 2,00,000 | 0 | 0 | 2,04,000 | 2,30,000 |
| 10 | 91,340 | 0 | 2,00,000 | 0 | 0 | 2,08,000 | 2,60,000 |
| 15 | 1,37,010 | 0 | 2,00,000 | 0 | 0 | 2,12,000 | 2,91,000 |
| 20 | 1,46,144 | 0 | 2,00,000 | 0 | 0 | 2,16,000 | 3,25,000 |
| 25 | 1,46,144 | 2,00,000 | 2,00,000 | 2,20,000 | 3,70,000 | 2,20,000 | 3,75,000 |
HDFC Life Sanchay Plus:
Let’s consider the HDFC Life Sanchay Plus Plan as an example. We will assume the case of Mr. X, a healthy 30-year-old male who has purchased the ‘Guaranteed Income’ option of the HDFC Life Sanchay Plus plan. Here are the details:
- Premium Paying Term: 12 Years
- Policy Term: 13 Years
- Sum Assured: Rs. 12,50,000
- Annual Premium Payment: Rs. 1 Lakh + Taxes
- Payout Period: 12 Years
The benefits provided by the plan option will be as follows:
| Policy Year (In Years) | Premiums Paid By Mr. X Annually | Maturity Benefit OR Guaranteed Income (Annual) |
| 1 To 5 | Rs. 1 Lakh + Taxes | 0 |
| 5 To 12 | Rs. 1 Lakh + Taxes | 0 |
| 13 | 0 | 0 |
| 14 | 0 | Rs. 2,15,250 |
| 15 | 0 | Rs. 2,15,250 |
| 16 To 20 | 0 | Rs. 2,15,250 |
| 20 To 24 | 0 | Rs. 2,15,250 |
| 25 | 0 | Rs. 2,15,250 |
| Total | Rs. 25,83,000 |
Note: Please note that specific benefit illustrations may vary based on individual circumstances, policy terms, and other factors. It is recommended to refer to the official plan documents or consult with a representative of the insurance provider for accurate and personalized benefit illustrations tailored to your specific situation.
What To Choose: LIC Jeevan Labh OR HDFC Life Sanchay Plus?
Choosing between LIC Jeevan Labh and HDFC Life Sanchay Plus depends on your specific needs, preferences, and financial goals.
If we talk about LIC Jeevan Labh policy, it assures that the future of your family is protected. Its personalization options allow the policyholders to receive benefits based on their current as well as future needs. Though the annualized returns of the plan are significantly lower than other saving schemes like PPF (as evident from expert reviews), it still emerges as an affordable alternative due to its profit participation feature that allows the policyholders to maximize their savings and build a sufficient corpus for long-term goals. Moreover, its rebates protect the policyholders against breaking their banks for higher sum assured options. Thus, Jeevan Labh policy from LIC is the best option for people looking for an affordable and low-risk life insurance-cum-savings plan.
On the other hand, the HDFC Life Sanchay Plus plan offers several next-generation features, including multiple variants. Additionally, it offers assured income for a specified duration, with the payout amount progressively increasing each year. A unique selling proposition (USP) of all the variants is that their payouts are not only guaranteed but also completely tax-free. This distinguishes it from many other similar annuity plans in the market. Consequently, this plan may be particularly suitable for retirees to receive a steady income, young individuals planning for retirement, or individuals falling under a higher tax bracket.
It is crucial to take into account your unique financial objectives, insurance requirements, and risk tolerance when selecting the plan that is ideal for you. While the above comparison may offer you some aspects of both policies, a thorough examination must be done to make an informed choice.
