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LIC Dhan Varsha Insurance Plan: Complete Analysis & Review – Should you buy?

LIC Dhan Varsha Insurance Plan: Complete Analysis & Review – Should you buy? 

by Holistic Leave a Comment | Filed Under: Insurance

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Investing in a Life Insurance policy might provide financial safety to your family in the case of your unfortunate absence.

But will it also help you attain your financial goals by acting as your investment?

LIC has launched a single premium plan called ‘Dhan Varsha’. 

In this article, through a thorough analysis, we will be able to find out if the LIC Dhan Varsha endowment plan will yield a better return on investment.

Let’s analyze this policy in-depth to find out its benefits and the Rate of Returns associated with it.

Table of Contents:

1.) What is LIC Dhan Varsha Plan?
2.) Features of LIC Dhan Varsha Plan
3.) Eligibility Criteria of LIC Dhan Varsha Plan
4.) Benefits under LIC Dhan Varsha Plan

  • Death Benefit
  • Survival Benefit
  • Maturity Benefit

5.) Other Benefits of LIC Dhan Varsha Plan
6.)Free Look Period of the LIC Dhan Varsha Plan
7.) Surrendering LIC Dhan Varsha Plan
8.) Advantages of LIC Dhan Varsha Plan
9.) Disadvantages of LIC Dhan Varsha Plan
10.) Research Methodology
11.) IRR of LIC Dhan Varsha Plan
12.) LIC Dhan Varsha Plan VS Other Investment Options
13.) LIC Dhan Varsha Vs. Pure Term Insurance + ELSS
14.) Final Verdict on LIC Dhan Varsha Plan

What is LIC Dhan Varsha Plan?

It is a Non-Linked, Non-Participating, Individual, Savings, Life Insurance Plan. 

It is a single premium policy. This plan provides financial support for your family in case of your unfortunate death during your policy term.

 It also provides a guaranteed lump sum amount on the date the policy matures for the surviving life assured.  

Features of the LIC Dhan Varsha Plan

  • You have options to choose your Sum Assured on death, Option 1 – 1.25 times your Tabular premium, or Option 2 – 10 times your Tabular Premium.
  • You have the option to choose your Policy Term – 10 years or 15 years.
  • The Guaranteed Additions shall accrue at the end of each policy year, throughout your policy term.
  • The Premium shall be based on the age at entry of the life-assured policy term and the option chosen.
  • Guaranteed Additions shall vary as per the chosen option of your policy term and basic sum assured.

Eligibility Criteria of LIC Dhan Varsha Plan

Let us look at the run-down of the eligibility criteria of this policy to better understand the basic working of this policy at a glance below:

Minimum Age at Entry

3 years (completed) for policy term 15 years

8 years (completed) for policy term 10 years

Maximum Age at Entry

For Policy term 10 years:

Option 1: 60 years (nearer birthday) 

Option 2: 40 years (nearer birthday)

For Policy term 15 years:

35 years (nearer birthday) for both the options

Minimum Age at Maturity

18 years (completed)

Maximum Age at Maturity

Option 1: 75 years (nearer birthday) 

Option 2: 50 years (nearer birthday)

Policy Term 

10 & 15 years

Mode of Premium Payment 

Single premium

Minimum Basic Sum Assured 

Rs. 1,25,000

Maximum Basic Sum Assured 

No Limit (shall be in multiples of Rs. 5,000)

Benefits under LIC Dhan Varsha Plan

Death Benefit:

The death benefit payable, on the death of your life assured during the policy term, shall be “Sum Assured on Death” along with the accrued Guaranteed Additions. 

“Sum Assured on Death” shall depend on the option chosen by the policyholder.

Option 1: 1.25 times Tabular Premium for the chosen Basic Sum Assured

Option 2: 10 times of Tabular Premium for the chosen Basic Sum Assured

Maturity Benefit:

On Life, Assured surviving the stipulated Date of Maturity, “Basic Sum Assured” along with accrued Guaranteed Additions shall be payable.

Guaranteed Additions:

The Guaranteed Additions shall accrue at the end of each policy year, throughout your policy term, and shall depend on the options you have chosen as your Basic Sum Assured and the Policy Term.

Guaranteed Additions (per Rs.1000 Basic Sum Assured)

 

Option 1

Option 2

Basic Sum AssuredPolicy Term 10 yearsPolicy Term 15 yearsPolicy Term 10 yearsPolicy Term 15 years
Rs. 1,25,000 to Rs. 2,45,00060652530
Rs. 2,50,000 to Rs. 6,95,00065703035
Rs. 7,00,000 & above70753540

Other Benefits of LIC Dhan Varsha Plan

Riders:

  • LIC’s Accidental Death and Disability Benefit Rider
  • LIC’s New Term Assurance Rider

Settlement option for Maturity benefit:

This is an option for you to receive your Maturity Benefit in installments over a period of 5 years instead of a lump sum amount. 

Option to take Death Benefit in Instalments:

There is an option for you to receive Death Benefit in installments over a period of 5 years instead of a lump sum amount. 

Loan:

The loan can be availed under this policy at any time during the policy term after 3 months from the Date of issuance. 

Free Look Period of the LIC Dhan Varsha Plan

If you are not satisfied with the “Terms and Conditions” of the LIC Dhan Varsha Plan, then it may be returned to the Corporation within 15 days from the date of receipt by the policyholder.

If the policyholder bought this policy through electronic or distance mode, then the free look period will be extended up to 30 days.

Surrendering LIC Dhan Varsha Plan

The policy can be surrendered by the Policyholder at any time during the policy term. 

On surrender of the policy, the Surrender Value is equal to the higher Guaranteed Surrender Value and Special Surrender Value is payable. 

Advantages of LIC Dhan Varsha Plan

  • Options to choose your policy term & plan option at your convenience.
  • Hassle-free investment option i.e., one-time premium payment.
  • You can claim benefits such as Maturity and Death benefits, which are guaranteed.
  • A loan facility is available.
  • The rider option is to enhance your life cover.

Disadvantages of LIC Dhan Varsha Plan

  • The life cover is not adequate.
  • The return on your investment cannot combat the inflation rate.
  • Locking funds for a longer period which has a low return might end up compromising your financial goals in the future.

For further details, you can refer to LIC Dhan Varsha Policy Brochure.

Research Methodology

So, we have covered all the important information you need about the LIC Dhan Varsha Plan. 

But will this piece of information be sufficient enough for you to decide whether to opt for this policy or not?

Any investment decision that you take should be based on the safety, liquidity & potential returns in the future.

In this LIC Dhan Varsha Plan Policy, the safety factor is assured via guaranteed maturity.

Regarding liquidity you have two options available; 

  1. You can either surrender any time after 3 months 

or

  1. You have to wait for the completion of your policy term. 

Now, let us figure out the potential Rate of Return (IRR) of the LIC Dhan Varsha plan using its benefit illustration. Then, we shall compare its Internal Rate of Return (IRR) with other investment alternatives that are available in the market.

This analysis will help you decide if this policy will be a good investment or not in the long term according to its outcome.

IRR of LIC Dhan Varsha Plan 

Let us assume the below information to conduct a case study on determining the IRR of this policy.

Option 1 Option 2
Age30Basic Sum Assured10,00,00010,00,000
Policy Term15Sum Assured on Death11,08,48379,87,000
Single premium8,86,7507,98,700

Let us figure out the IRR for both options. The premium given here is for a 30-year-old male. The policy term is 30 years. The sum Assured on death varies depending on the option chosen.

  

Option 1

Option 2

AgeYearAnnualized premium / Maturity benefitDeath benefitAnnualized premium / Maturity benefitDeath benefit
301-8,86,75011,83,483-7,98,70080,27,000
312012,58,483080,67,000
323013,33,483081,07,000
334014,08,483081,47,000
345014,83,483081,87,000
356015,58,483082,27,000
367016,33,483082,67,000
378017,08,483083,07,000
389017,83,483083,47,000
3910018,58,483083,87,000
4011019,33,483084,27,000
4112020,08,483084,67,000
4213020,83,483085,07,000
4314021,58,483085,47,000
4415022,33,483085,87,000
451621,25,00016,00,000
IRR6.00%4.74%

In the first option, Sum assured on death is just 1.25 times the premium, so the IRR is comparatively on the higher side. 

Whereas in the second option, the Sum assured on death is 10 times the premium. So, the IRR works to be comparatively on the lower side. 

Depending on the death benefit, the IRR varies. Higher the death benefit, the lower the return on investment & vice versa.

Both the IRR provided on this plan options are lower than any bank’s FD rate of Interest. These returns cannot combat the inflation rate in the long run. Any investment will only be beneficial for an investor if it generates returns that are above the inflation rate.

LIC Dhan Varsha Plan VS Other Investment Options

Now we have computed the return of LIC Dhan Varsha. Now it’s time to compare it with other investment options to assist you in taking the right decision.

Let us assume the cash flow similar to that of the second option under the LIC Dhan Varsha plan. The same single premium is invested in pure term insurance for life coverage (single pay) & the balance amount can be invested for wealth accumulation purposes.

LIC Dhan Varsha Vs. Pure Term Insurance + ELSS

The Assumption for Comparison:

Pure Term Policy:
Sum Assured on death1 crore
Policy term15 years
Premium (single pay)1,40,000
Balance amount (Invested in ELSS)6,58,700

LIC Dhan Varsha plan’s option 2 provides a death benefit 10 times the premium. Here in its substitute, a life cover for Rs. 1 crore for a policy term of 15 years has been opted for. 

The premium for the pure term insurance policy is Rs. 1,40,000 as a single-pay premium. The balance amount can be invested as per the policyholder’s risk appetite. Here the chosen investment vehicle is the ELSS fund. 

  

Term insurance + ELSS

AgeYearTerm Insurance premium + ELSSDeath benefit
301-7,98,7001,00,00,000
31201,00,00,000
32301,00,00,000
33401,00,00,000
34501,00,00,000
35601,00,00,000
36701,00,00,000
37801,00,00,000
38901,00,00,000
391001,00,00,000
401101,00,00,000
411201,00,00,000
421301,00,00,000
431401,00,00,000
441501,00,00,000
451633,20,764
IRR9.97%

The IRR for the pure term insurance + ELSS option is 9.97% which is a post-tax return. This return can combat inflation in the long run. 

Also, you will get a life cover for Rs. 1 crore by investing in this combination. It is evident from the investment point of view as well as from the life cover point of view that the LIC Dhan Varsha plan is not favorable to the investor as a long-term investment.

Final Verdict on LIC Dhan Varsha Plan

This new LIC Dhan Varsha Plan offers you guaranteed maturity benefits & life cover. But based on the plan options available, neither you can get higher coverage nor you can get a larger maturity benefit. 

In the end, you are forced to compromise with one to get the other benefit. Though these endowment policies will get you a guaranteed return, they will fail to provide you with the time value of your money.

To yield a better return, invest in a plan or scheme where it can combat inflation in the long run. Also, choose an investment vehicle based on your risk appetite & time horizon.

To know and understand better investment options, you can consult with your financial advisor to see which investment choice will be the right fit for your investment portfolio.


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Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

Google Reviews

Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

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