Introduction to LIC Jeevan Labh (Plan No. 936)
LIC Jeevan Labh (Plan No. 936, UIN: 512N304V02) is one of the most widely held non-linked, with-profits, limited premium payment endowment life insurance plans offered by the Life Insurance Corporation of India. The paramount feature of Jeevan Labh is its Limited Premium Paying Term (PPT): you are required to pay premiums for only a fraction of the policy duration, while enjoying comprehensive life insurance coverage and compounding bonus accruals for the full policy term.
This plan is tailored for breadwinners seeking guaranteed financial security for their families along with a substantial tax-free lump-sum corpus at maturity to fund milestone life goals such as higher education or marriage.
The Three Fixed Policy Term & PPT Combinations
Unlike flexible endowment policies, LIC Jeevan Labh is structured around three precise mathematical combinations designed for maximum bonus accrual:
| Policy Term | Premium Paying Term (PPT) | Premium Holiday Period | Min - Max Age at Entry | Maximum Maturity Age |
|---|---|---|---|---|
| 16 Years Term | 10 Years PPT | 6 Years (Zero Premium) | 8 to 59 Years | 75 Years |
| 21 Years Term | 15 Years PPT | 6 Years (Zero Premium) | 8 to 54 Years | 75 Years |
| 25 Years Term | 16 Years PPT | 9 Years (Zero Premium) | 8 to 50 Years | 75 Years |
Key Plan Features & Death Benefit Mechanics
- Death Benefit: In the unfortunate event of the life assured's demise during the policy term (provided all due premiums are paid), the nominee receives the Sum Assured on Death (defined as 7 times annualized premium or basic sum assured, whichever is higher) PLUS all accrued Simple Reversionary Bonuses and Final Additional Bonus (FAB). The death benefit is never less than 105% of all premiums paid.
- Maturity Benefit: On survival to the end of the policy term, the policyholder receives the full Basic Sum Assured together with accumulated Simple Reversionary Bonuses and Final Additional Bonus.
- Tax Privileges: Premiums paid qualify for deductions under Section 80C, and the maturity corpus is completely exempt from income tax under Section 10(10D) of the Income Tax Act (subject to statutory premium-to-SA caps).
Comprehensive Bonus Structure: Reversionary vs Final Additional Bonus (FAB)
1. Simple Reversionary Bonus: Declared annually at the end of each financial year per ₹1,000 Sum Assured based on LIC's actuarial valuation profits. Historically, Jeevan Labh has attracted some of the highest bonus rates in LIC (typically ₹42/thousand for 16-yr term, ₹44/thousand for 21-yr term, and ₹46/thousand for 25-yr term).
2. Final Additional Bonus (FAB): A one-time loyalty bonus paid along with the maturity or death claim on policies that have run for at least 15 years. For a 25-year term, FAB can reach up to ₹450 per ₹1,000 Sum Assured, substantially boosting the final maturity check!
Real-World Case Study: 30-Year-Old Investing in 21-Year Term
Consider a 30-year-old individual, Amit, who opts for a ₹5,00,000 Sum Assured in LIC Jeevan Labh with a 21-year policy term (PPT 15 years):
- Annual Premium: Approximately ₹27,000 (around ₹75/day).
- Total Investment over 15 Years: ₹27,000 × 15 = ₹4,05,000.
- Premium Holiday (Years 16 to 21): Zero premium paid for 6 years while life cover continues.
- Guaranteed Basic Sum Assured at Maturity: ₹5,00,000.
- Estimated Reversionary Bonus (21 years @ ₹44/1k/yr): ₹4,62,000.
- Estimated Final Additional Bonus (@ ₹100/1k): ₹50,000.
- Total Estimated Maturity Payout: ₹10,12,000 (completely tax-free under Section 10(10D)).
Optional Riders Available Under Jeevan Labh
- Accidental Death and Disability Benefit Rider: Provides an additional equal Sum Assured in case of accidental demise and waives future premiums in case of permanent disability.
- New Term Assurance Rider: Augments life insurance death cover by providing an additional life cover sum.
- Critical Illness Rider: Provides an immediate lump sum upon diagnosis of 15 specified critical illnesses.
Surrender & Policy Loan Provisions
A policy can be surrendered after paying at least 2 full consecutive years of premiums. Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV) apply. Policyholders can also borrow up to 90% of the surrender value as a loan at competitive interest rates.