LIC of India is a vital aspect of financial planning since it protects against death and gives financial security to the insured’s family if he/she dies prematurely. Some of its plans, such as LIC Jeevan Saral and LIC Jeevan Lakshya, are so unique that they offer a good combination of ‘conventional and modern features’ plus ‘protection and savings’.
Though the foundational aspects of both the plans are the same, we will draw a comparison between the two plans to understand their unique features.
Know About LIC Jeevan Saral Plan
LIC Jeevan Saral Plan is essentially an endowment assurance plan in which the proposer simply selects the amount and method of premium payment. Throughout the term of the plan, the plan provides the necessary financial protection against death. The death benefit is proportional to the premiums paid.
The sum assured on maturity is determined by the age of the life to be assured at the time of entrance and is payable upon survival to the conclusion of the policy term. It also provides term flexibility and a high level of liquidity.
What Is LIC Jeevan Lakshya Plan?
Jeevan Lakshya by LIC is a non-linked, participating, individual, life assurance plan that provides both protection and savings. This plan provides an annual income benefit that may help to meet the needs of the family, mainly for the benefit of children, in the event of the policyholder’s untimely death at any time before maturity, as well as a lump sum amount at the time of maturity regardless of the policyholder’s survival.
The plan is mostly beneficial to minors since it provides annual income benefits to meet the needs of the family. It also addresses liquidity issues through its loan facility.
Eligibility Details Of LIC Jeevan Saral & Jeevan Lakshya Policy
| Parameters | LIC Jeevan Saral | LIC Jeevan Lakshya |
| Minimum Entry Age | 12 Years (Completed) | 18 Years (Last Birthday) |
| Maximum Entry Age | 60 Years (Nearest) | 50 Years (Nearer Birthday) |
| Maximum Age At Maturity | 70 Years | 65 Years (Nearer Birthday) |
| Policy Term | 10 T0 35 Years | 13 To 25 Years |
| Sum Assured | 250 X Monthly Premium Amount | Rs. 1 Lakh To No Limit |
Comparison Of Features & Benefits Of Jeevan Saral & Jeevan Lakshya Plan
Let’s compare some of the unique features of both plans in order to make a wise decision!
Death Benefit:
Both plans offer death benefits to the nominee in case of death of the life assured. The death benefits under the plan will be as follows:
For LIC Jeevan Saral Plan
- 250 X Monthly Premium
- Return of premiums excluding extra/rider premium and first-year premium, plus
- Loyalty addition, if any
For LIC Jeevan Lakshya Plan
- Sum Assured on Death + Simple Reversionary Bonuses + Final Additional Bonuses, where ‘Sum Assured on Death’ is higher of any of the following:
- 7 X Annualized Premium
- The Sum of 110% of the Basic Sum Assured
- The vested Simple Reversionary Bonuses and Final Additional Bonus, if any
Maturity Benefit:
In case the life assured survives the policy term, provided the policy is in force, he/she will receive ‘Sum Assured on Maturity’, which will be the following in the plans:
- LIC Jeevan Saral: Maturity Sum Assured + Loyalty Additions (if any)
- LIC Jeevan Lakshya: Sum Assured on Maturity + Simple Reversionary Bonuses + Final Additional Bonus (if any)
Rider Benefits:
The following list of optional riders are available under the plans, which can be purchased by the insured by paying an extra premium amount.
Options Available For LIC Jeevan Saral Policy
- Accidental death and disability benefit rider
- Term assurance benefit
Options Available For LIC Jeevan Lakshya Plan
- Accidental death and disability benefit rider
- Accident benefit rider
- Term assurance rider
- New critical illness benefit rider
Rebates:
Under the LIC Jeevan Saral policy, the mode rebate is 2% for yearly mode and 1% for half-yearly mode. There are no rebates for quarterly and SSS modes. There are also zero rebates for the high sum assured under the plan.
For LIC Jeevan Lakshya policy, the mode rebates if 2% of the tabular premium for the yearly mode and 1% of the tabular premium for the half-yearly mode. Similar to that of the LIC Jeevan Saral plan, there are no rebates for quarterly and Salary Deduction modes. However, there are rebates for high sum assured and they are as follows:
| Basic Sum Assured | Rebates |
| Rs. 1,00,000 To Rs. 1,90,000 | Nil |
| Rs. 2,00,000 To Rs. 4,90,000 | 2% Of Basic Sum Assured |
| Rs. 5,00,000 & Above | 3% Of Basic Sum Assured |
Exclusions:
If the life insured under any of the policies commits suicide, whether medically sane or insane, within one year of the date of issuance of the policy, the policy is null and void, and the company is only obligated to pay the premiums paid to date.
Loyalty Additions:
This benefit is available with the LIC Jeevan Saral plan and not with the LIC Jeevan Lakshya plan. Under this benefit, the policyholder will start receiving the loyalty additions from the 10th policy year onwards. However, they are also payable if death happens in the 10th policy period, provided that the policy is in force at the time of death. It is also important to note that loyalty additions can be paid on death, maturity, or surrender, whichever is applicable.
Options To Take Death & Maturity Benefit In Instalments:
The LIC’s Jeevan Lakshya plan allows its policyholder to receive death and maturity benefits in installments. However, this feature is not present in the LIC Jeevan Saral plan. The feature allows the policyholder to receive the death and maturity benefits in installments over a defined term of 5, 10, or 15 years instead of a lump sum payment under an active and paid-up policy.
Mode Of Premium Payments:
The premium payments for the LIC Jeevan Saral plan can be paid in yearly, half-yearly, quarterly, and monthly modes under the Salary Saving Scheme. Whereas the premium payments for the LIC Jeevan Lakshya plan can be done in yearly, half-yearly, quarterly, or monthly mode through NACH only or through salary deductions.
Loan Facility:
Both plans offer loan facilities to the policyholder subject to various terms and conditions specified by the insurance company from time to time. The interest rate to be charged for the policy loan and, as applicable, for the full term of the loan will be set at periodic intervals. The applicable interest rate shall be as declared by the corporation using the IRDAI-approved method.
Benefit Illustration Of LIC Jeevan Saral & LIC Jeevan Lakshya Plan
To make an accurate decision on which one to choose from LIC Jeevan Saral and LIC Jeevan Lakshya policy, it is important to understand the functioning of both plans. Therefore, let’s look at the benefits provided by both plans one by one!
LIC Jeevan Saral Plan
Mr. Ashutosh Kumar, a 35 years old male, wishes to purchase LIC Jeevan Saral policy. The details of his policy are as follows:
- Policy Term: 30 Years
- Premium Payment Frequency: Monthly (Under SSS)
- Monthly Premium: Rs. 400
- Maturity Sum Assured: Rs. 1,62,416
The plan will offer the following benefits!
Death Benefit (In Rs.)
| End Of Policy Year | Total Premiums Paid (In Rs.) | Guaranteed Death Benefit (In Rs.) | @6% PA | @10% PA | @6% PA | @10% PA |
| 1 | 4,800 | 1,00,000 | – | – | 1,00,000 | 1,00,000 |
| 2 | 9,600 | 1,04,800 | – | – | 1,04,800 | 1,04,800 |
| 3 | 14,400 | 1,09,600 | – | – | 1,09,600 | 1,09,600 |
| 4 | 19,200 | 1,14,400 | – | – | 1,14,400 | 1,14,400 |
| 5 | 24,000 | 1,19,200 | – | – | 1,19,200 | 1,19,200 |
| 6 | 28,800 | 1,24,000 | – | – | 1,24,000 | 1,24,000 |
| 7 | 33,600 | 1,28,800 | – | – | 1,28,800 | 1,28,800 |
| 8 | 38,400 | 1,33,600 | – | – | 1,33,600 | 1,33,600 |
| 9 | 43,200 | 1,38,400 | – | – | 1,38,400 | 1,38,400 |
| 10 | 48,000 | 1,43,200 | 4,000 | 8,000 | 1,47,200 | 1,51,200 |
| 15 | 72,000 | 1,67,200 | 7,640 | 16,000 | 1,74,840 | 1,83,200 |
| 20 | 96,000 | 1,91,200 | 18,520 | 52,000 | 2,09,720 | 2,43,200 |
| 25 | 1,20,000 | 2,15,200 | 39,200 | 1,30,000 | 2,54,400 | 3,45,200 |
| 30 | 1,44,000 | 2,39,200 | 76,480 | 3,00,000 | 3,15680 | 5,39,200 |
Maturity/Surrender Value (In Rs.)
| End Of Policy Year | Total Premiums Paid (In Rs.) | Guaranteed Maturity Benefit (In Rs.) | @6% PA | @10% PA | @6% PA | @10% PA |
| 1 | 4,800 | – | – | – | – | – |
| 2 | 9,600 | – | – | – | – | – |
| 3 | 14,400 | 8,099 | – | – | 8,099 | 8,099 |
| 4 | 19,200 | 12,942 | – | – | 12,942 | 12,942 |
| 5 | 24,000 | 18,660 | – | – | 18,660 | 18,660 |
| 6 | 28,800 | 23,180 | – | – | 23,180 | 23,180 |
| 7 | 33,600 | 27,856 | – | – | 27,856 | 27,856 |
| 8 | 38,400 | 32,744 | – | – | 32,744 | 32,744 |
| 9 | 43,200 | 37,892 | – | – | 37,892 | 37,892 |
| 10 | 48,000 | 43,360 | 4,000 | 8,000 | 47,360 | 51,360 |
| 15 | 72,000 | 75,200 | 7,640 | 16,000 | 82,840 | 91,200 |
| 20 | 96,000 | 1,05,404 | 18,520 | 52,000 | 1,23,924 | 1,57,404 |
| 25 | 1,20,000 | 1,35,296 | 39,200 | 1,30,000 | 1,74,496 | 2,65,296 |
| 30 | 1,44,000 | 1,62,416 | 76,480 | 3,00,000 | 2,38,896 | 4,62,416 |
LIC Jeevan Lakshya Plan
Suppose Mr. Aggarwal, a 30 years old male, wishes to purchase the policy having the following details:
- Policy Term: 25 Years
- Premium Payment Term: 22 Years
- Premium Payment Mode: Yearly
- Basic Sum Assured: Rs. 1,00,000
- Premium (Excluding Taxes): Rs. 4,366
The plan will work in the following manner for him!
| End Of Year | Total Premium Paid Till The End Of The Year (In Rs.) | Guaranteed Benefit | Non-Guaranteed Benefit | Total Maturity Benefit | Total Death Benefit | |||||
| Sum Assured On Maturity | Sum Assured On Death | (Simple Reversionary Bonus) | ||||||||
| Total Income Benefit Payable In Equal Instalments over o/s Term After Death | Lump Sum Payable On Date Of Maturity | @4% PA | @8% PA | @4% PA | @8% PA | @4% PA | @8% PA | |||
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | (11) |
| 5 | 21,830 | 0 | 2,00,000 | 1,10,000 | 3,500 | 16,000 | 0 | 0 | 1,27,500 | 2,00,000 |
| 10 | 43,660 | 0 | 1,50,000 | 1,10,000 | 7,000 | 32,000 | 0 | 0 | 1,27,500 | 2,00,000 |
| 15 | 65,490 | 0 | 1,00,000 | 1,10,000 | 10,500 | 48,000 | 0 | 0 | 1,27,500 | 2,00,000 |
| 20 | 87,320 | 0 | 50,000 | 1,10,000 | 14,000 | 64,000 | 0 | 0 | 1,27,500 | 2,00,000 |
| 21 | 91,686 | 0 | 40,000 | 1,10,000 | 14,700 | 67,200 | 0 | 0 | 1,27,500 | 2,00,000 |
| 22 | 96,052 | 0 | 30,000 | 1,10,000 | 15,400 | 70,400 | 0 | 0 | 1,27,500 | 2,00,000 |
| 23 | 96,052 | 0 | 20,000 | 1,10,000 | 16,100 | 73,600 | 0 | 0 | 1,27,500 | 2,00,000 |
| 24 | 96,052 | 0 | 10,000 | 1,10,000 | 16,800 | 76,800 | 0 | 0 | 1,27,500 | 2,00,000 |
| 25 | 96,052 | 1,00,000 | 0 | 1,10,000 | 17,500 | 80,000 | 1,17,500 | 1,90,000 | 1,27,500 | 2,00,000 |
Which One Is Better: LIC Jeevan Saral OR Jeevan Lakshya?
Both LIC Jeevan Saral and LIC Jeevan Lakshya are based on a very important idea of comprehensive life insurance for potential buyers. However, as highlighted above, these two plans come with their own unique sets of features that function to fulfill the diversified needs of policyholders.
In case you are looking for higher sum assured rebates and options to take maturity and death benefits in installments, then the LIC Jeevan Lakshya policy is certainly the best choice. However, the plan comes with various cons like the benefits are not guaranteed, the bonus declaration differs every year, and more.
Whereas, LIC Jeevan Saral plan is quite different from other plans in the context of calculation of sum assured and surrender value. The plan also offers various other benefits, such as auto cover (please check the policy’s brochure) and loyalty additions, and has various disadvantages like no rebates on the higher sum assured rates. Therefore, it entirely depends on the type of life insurance coverage you want for yourself and your family members.
Remember that whatever life insurance you choose from the two, it is extremely crucial to extensively research each plan before making a final decision. The comparison should serve as a useful starting point for your investigation.
