Listen to this articleIs it advisable to consider the LIC Jeevan Umang Plan as part of your investment portfolio?
LIC Jeevan Umang is a savings and insurance plan that offers a combination of life protection and guaranteed income protection.
But how guaranteed are these incomes from LIC Jeevan Umang policy when it comes to securing your financial future?
Will this guaranteed income help you achieve your financial goals?
Let’s do a detailed analysis to know better. LIC Jeevan Umang Advantages (Pros) & Disadvantages (Cons) to discover the answer to these questions.
If you are looking to opt for this plan then knowing LIC Jeevan Umang Disadvantages will enlighten you on the challenges to be encountered to use the plan to its fullest potential.
The Research Methodology section under Jeevan Umang Review will help you gain awareness of LIC Jeevan Umang rate of return. The Rate of Return will be the deciding factor to know whether is LIC Jeevan Umang a good policy or not.
First, let’s understand the basic things that we need to know about LIC Jeevan Umang.
Table of Contents:
1.) What is LIC Jeevan Umang?
2.)Features of LIC Jeevan Umang
3.)Benefits of LIC Jeevan Umang
4.)Eligibility of LIC Jeevan Umang
5.)Advantages of LIC Jeevan Umang
6.)Disadvantages of LIC Jeevan Umang
7.)LIC Jeevan Umang-Research Methodology
8.)Factors: LIC Jeevan Umang vs. Other Investments
9.)Final Verdict on LIC Jeevan Umang – Should you buy it?
LIC Jeevan Umang Review:
What is LIC Jeevan Umang?
LIC Jeevan Umang claims to be ‘the 100-year plan’ that offers both life protection and guaranteed income.
It offers a survival benefit which is equal to 8% of the Basic Sum Assured from the completion of your Premium Payment Term till your age of 99 years. This plan also offers a maturity benefit as a lump sum when the policyholder reaches the age of 100.
Features of LIC Jeevan Umang:
- It is a money-saving plan.
- Survival Benefit from the end of the premium payment term till the policyholder reaches the age of 99.
- Maturity Benefit will be paid as a lump sum when the policyholder reaches the age of 100.
- Option to choose the premium payment term.
- Since it is a participating policy, it entitles policyholders to additional bonuses depending on the profits earned by LIC in a year.
- Additional riders benefit.
Benefits of LIC Jeevan Umang:
1.) Death Benefit:
If the policyholder passes away unfortunately before starting to receive the benefit, then
- the premium will be refunded without any interest.
If the policyholder passes away after starting to receive benefits, then
- Sum Assured on Death plus Reversionary Bonus and Final Additional bonus shall be paid to the nominee of the policyholder.
2.) Survival Benefit:
8% of the Basic Sum Assured will be paid every year as a Survival Benefit after the completion of the final premium payment term.
3.) Maturity Benefit:
The Sum Assured on Maturity, along with the Reversionary Bonus and Final Additional Bonus, will be paid to the policyholder during the maturity.
4.) Participation in Profit:
i.) During the premium paying term:
Policies that are still in effect during the premium-paying period are eligible to earn Simple Reversionary Bonuses that have been determined based on the Corporation’s experience.
In the year when a death claim is made on an active policy, a last additional bonus may also be reported under that policy.
ii.) After the premium paying term:
Depending on the Corporation’s experience under the LIC Jeevan Umang plan at the moment, the rules for participation of profits after the premium-paying term may take a different shape and be calculated on a different scale.
Future earnings would not be shared by a paid-up policy with a Maturity Paid-Up Sum Assured of less than Rs. 2 lacs.
Eligibility of LIC Jeevan Umang:
| a) Minimum Basic Sum Assured | Rs. 2,00,000 |
| b) Maximum Basic Sum Assured | No limit (The Basic Sum Assured shall be in multiples of Rs. 25,000/-) |
| c) Premium Paying Term | 15, 20, 25 and 30 years |
| d) Policy Term | (100 – the age at entry) years |
| e) Minimum Age at entry | 90 days (completed) |
| f) Maximum Age at entry | 55 years(nearer birthday) |
| g) Minimum Age at the end of premium paying term | 30 years(nearer birthday) |
| h) Maximum Age at the end of premium paying term | 70 years(nearer birthday) |
| i) Age at maturity | 100 years(nearer birthday) |
| j) Premium paying frequency | yearly, half-yearly, quarterly or monthly |
What are the LIC Jeevan Umang advantages and disadvantages?
Advantages of LIC Jeevan Umang:
You receive a lifetime of coverage because it is whole life insurance.
- A limited number of convenient premiums paying terms are available.
- Loan option is available.
- Possibility of receiving death benefits in instalments.
- Riders are available at an extra fee.
Now before you draw any conclusion regarding the plan, let’s check out the LIC Jeevan Umang policy disadvantages.
LIC Jeevan Umang Disadvantages:
- The lock-in period is two years (for surrender, paid-up or loan)
- The survival benefit is fixed. It doesn’t take inflation into account.
- The frequency of receive the survival benefit is fixed. Only an annual option is available.
These are the LIC Jeevan Umang’s disadvantages which you need to know as an investor.
LIC Jeevan Umang Research Methodology:
Is Jeevan Umang a good policy?
Is LIC Jeevan Umang policy a good investment?
How to discover whether LIC Jeevan Umang Policy is suitable for you or not?
Here, let’s do detailed research on LIC Jeevan Umang and its performance against other investments based on various factors.
First, we are going to calculate the IRR of LIC Jeevan Umang for the worst-case scenario and the best-case scenario. This LIC Jeevan Umang calculator will aid in getting clarity on the potential returns of the plan.
You can also use this LIC Jeevan Umang calculator as a tool to guide you in making those informed investment decisions.
Then, we are going to calculate the IRR of other risk-free and risk-oriented investment plans to see which performs better.
By comparing LIC Jeevan Umang rate of return with other investment rates of return you will able to choose the right investment product.
Later, we are going to see which gives you an advantage based on various factors such as affordability, charges, lock-in period, and so on.
Factors: LIC Jeevan Umang vs. Other Investments
1.) What is the LIC Jeevan Umang’s rate of return or IRR of the policy?
IRR of LIC Jeevan Umang with an example:
For example, let’s take a policyholder who is 40 years old.
He chooses a single life plan.
Sum Assured = Rs. 1,00,00,000
Premium Payment Term = 20 years
Policy Term = 60 years
Life expectation = 85 years
Annual Premium = Rs. 5,33,790 include tax
Here let’s calculate the IRR of LIC Jeevan Umang for both the worst case scenario and the best case scenario by using LIC Jeevan Umang Calculator.
What is the maturity amount of Jeevan Umang in the worst case scenario?
In the worst-case return, let’s take the Assumed Gross Return as 4%.
| At 4% p.a. | |||
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -5,33,790 | 1,00,00,000 |
| 41 | 2 | -5,33,790 | 1,00,00,000 |
| 42 | 3 | -5,33,790 | 1,00,00,000 |
| 43 | 4 | -5,33,790 | 1,00,00,000 |
| 44 | 5 | -5,33,790 | 1,00,00,000 |
| 45 | 6 | -5,33,790 | 1,00,00,000 |
| 46 | 7 | -5,33,790 | 1,00,00,000 |
| 47 | 8 | -5,33,790 | 1,00,00,000 |
| 48 | 9 | -5,33,790 | 1,00,00,000 |
| 49 | 10 | -5,33,790 | 1,00,00,000 |
| 50 | 11 | -5,33,790 | 1,00,00,000 |
| 51 | 12 | -5,33,790 | 1,00,00,000 |
| 52 | 13 | -5,33,790 | 1,00,00,000 |
| 53 | 14 | -5,33,790 | 1,00,00,000 |
| 54 | 15 | -5,33,790 | 1,00,00,000 |
| 55 | 16 | -5,33,790 | 1,00,00,000 |
| 56 | 17 | -5,33,790 | 1,00,00,000 |
| 57 | 18 | -5,33,790 | 1,00,00,000 |
| 58 | 19 | -5,33,790 | 1,00,00,000 |
| 59 | 20 | -5,33,790 | 1,00,00,000 |
| 60 | 21 | 8,00,000 | 1,00,00,000 |
| 61 | 22 | 8,00,000 | 1,00,00,000 |
| 62 | 23 | 8,00,000 | 1,00,00,000 |
| 63 | 24 | 8,00,000 | 1,00,00,000 |
| 64 | 25 | 8,00,000 | 1,00,00,000 |
| 65-80 | 26-41 | 8,00,000 | 1,00,00,000 |
| 81 | 42 | 8,00,000 | 1,00,00,000 |
| 82 | 43 | 8,00,000 | 1,00,00,000 |
| 83 | 44 | 8,00,000 | 1,00,00,000 |
| 84 | 45 | 8,00,000 | 1,00,00,000 |
| 85 | 1,12,09,590 | ||
| IRR | 4.16% | ||
As you can see, at the end of the policy term, we get an IRR of 4.16% and Rs. 1,12,09,590 as survival benefits from LIC Jeevan Umang.
Is this IRR of 4.16% from LIC Jeevan Umang decent enough? Absolutely No!
These returns will help not even you to keep up the pace with economic inflation.
Now, let’s calculate the IRR of LIC Jeevan Umang for the best-case scenario by using the LIC Jeevan Umang calculator.
What is the maturity amount of Jeevan Umang in the best case scenario?
Here we take the Assumed Gross Return as 8%.
| At 8% p.a. | |||
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -5,33,790 | 1,00,00,000 |
| 41 | 2 | -5,33,790 | 1,00,00,000 |
| 42 | 3 | -5,33,790 | 1,00,00,000 |
| 43 | 4 | -5,33,790 | 1,00,00,000 |
| 44 | 5 | -5,33,790 | 1,00,00,000 |
| 45 | 6 | -5,33,790 | 1,00,00,000 |
| 46 | 7 | -5,33,790 | 1,00,00,000 |
| 47 | 8 | -5,33,790 | 1,00,00,000 |
| 48 | 9 | -5,33,790 | 1,00,00,000 |
| 49 | 10 | -5,33,790 | 1,00,00,000 |
| 50 | 11 | -5,33,790 | 1,00,00,000 |
| 51 | 12 | -5,33,790 | 1,00,00,000 |
| 52 | 13 | -5,33,790 | 1,00,00,000 |
| 53 | 14 | -5,33,790 | 1,00,00,000 |
| 54 | 15 | -5,33,790 | 1,00,00,000 |
| 55 | 16 | -5,33,790 | 1,00,00,000 |
| 56 | 17 | -5,33,790 | 1,00,00,000 |
| 57 | 18 | -5,33,790 | 1,00,00,000 |
| 58 | 19 | -5,33,790 | 1,00,00,000 |
| 59 | 20 | -5,33,790 | 1,00,00,000 |
| 60 | 21 | 8,00,000 | 1,00,00,000 |
| 61 | 22 | 8,00,000 | 1,00,00,000 |
| 62 | 23 | 8,00,000 | 1,00,00,000 |
| 63 | 24 | 8,00,000 | 1,00,00,000 |
| 64 | 25 | 8,00,000 | 1,00,00,000 |
| 65-80 | 26-41 | 8,00,000 | 1,00,00,000 |
| 81 | 42 | 8,00,000 | 1,00,00,000 |
| 82 | 43 | 8,00,000 | 1,00,00,000 |
| 83 | 44 | 8,00,000 | 1,00,00,000 |
| 84 | 45 | 8,00,000 | 1,00,00,000 |
| 85 | 5,03,15,000 | ||
| IRR | 6.29% | ||
Here at the end of the policy term, we get the LIC Jeevan Umang IRR of 6.29% and Rs. 5,03,15,000 as survival benefit.
| Options | IRR | Maturity Benefit in Rs. | Death Benefit in Rs. |
| Worst Case Scenario (4% assumed gross return) | 4.16% | 1.12 cr | 1 cr |
| Best Case Scenario (8% assumed gross return) | 6.29% | 5.03 crs | 1 cr |
Is this IRR from LIC Jeevan Umang is decent enough? We can find out this by comparing the LIC Jeevan Umang IRR with the PPF + Term Insurance IRR and Mutual Fund SIP + Term Insurance IRR.
LIC Jeevan Umang Vs PPF’s comparative analysis will show which has the higher potential for producing good returns. But the fact is that LIC Jeevan Umang Plan also has life cover, so in order to do a fair comparison, let’s compare LIC Jeevan Umang Policy with Pure Term Insurance Life Cover and PPF.
Question:
Then what is the LIC Jeevan Umang interest rate / return rate for 15 years?
IRR of LIC Jeevan Umang vs. Term Insurance + PPF + Hybrid Funds:
Now, let’s calculate the IRR of a risk-free investment plan by using LIC Jeevan Umang Policy calculator. For example, let’s take PPF.
Overall contribution: Rs. 5,40,307
Term Insurance:
Sum Assured: Rs. 1,00,00,000
Annual Term: Rs. 19,700
Tenure: 20 years
PPF Contribution: Rs. 5,14,090
(Note: The maximum investment amount in PPF is Rs. 1,50,000. We have used Rs. 5,14,090 for calculation purposes only.)
Interest Rate: 7.10% without investment risk
Then,
| Term Insurance + PPF | |||
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -5,33,790 | 1,00,00,000 |
| 41 | 2 | -5,33,790 | 1,00,00,000 |
| 42 | 3 | -5,33,790 | 1,00,00,000 |
| 43 | 4 | -5,33,790 | 1,00,00,000 |
| 44 | 5 | -5,33,790 | 1,00,00,000 |
| 45 | 6 | -5,33,790 | 1,00,00,000 |
| 46 | 7 | -5,33,790 | 1,00,00,000 |
| 47 | 8 | -5,33,790 | 1,00,00,000 |
| 48 | 9 | -5,33,790 | 1,00,00,000 |
| 49 | 10 | -5,33,790 | 1,00,00,000 |
| 50 | 11 | -5,33,790 | 1,00,00,000 |
| 51 | 12 | -5,33,790 | 1,00,00,000 |
| 52 | 13 | -5,33,790 | 1,00,00,000 |
| 53 | 14 | -5,33,790 | 1,00,00,000 |
| 54 | 15 | -5,33,790 | 1,00,00,000 |
| 55 | 16 | -5,33,790 | 1,00,00,000 |
| 56 | 17 | -5,33,790 | 1,00,00,000 |
| 57 | 18 | -5,33,790 | 1,00,00,000 |
| 58 | 19 | -5,33,790 | 1,00,00,000 |
| 59 | 20 | -5,33,790 | 1,00,00,000 |
| 60 | 21 | 8,00,000 | 1,00,00,000 |
| 61 | 22 | 8,00,000 | 1,00,00,000 |
| 62 | 23 | 8,00,000 | 1,00,00,000 |
| 63 | 24 | 8,00,000 | 1,00,00,000 |
| 64 | 25 | 8,00,000 | 1,00,00,000 |
| 65-80 | 26-41 | 8,00,000 | 1,00,00,000 |
| 81 | 42 | 8,00,000 | 1,00,00,000 |
| 82 | 43 | 8,00,000 | 1,00,00,000 |
| 83 | 44 | 8,00,000 | 1,00,00,000 |
| 84 | 45 | 8,00,000 | 1,00,00,000 |
| 85 | 8,79,69,258 | ||
| IRR | 7.38% | ||
Here, after 20 years, your PPF will mature and will give you Rs. 2,28,19,729 as an investment return.
The IRR of 7.38% will attract the risk-averse investors. But the only drawback over here is just like LIC Jeeven Umang Policy here also investor funds get locked for a longer timeframe.
So lets us see if there are any other investment option which produces return than LIC Jeevan Umang Plan and at the same time, it is easy to liquidate.
Now, here you can reinvest the money as a 70:30 ratios in debt and equity for the remaining 25 years and can withdraw Rs. 8,00,000 annually through a Systematic Withdrawal Plan.
| Equity | 30% | 12% |
| Debt | 70% | 6% |
| Weighted Average return | 7.80% |
At the end of the 45 years, you will get an IRR of 7.80% and Rs. 8,79,69,258 as investment return.
As an investor, you might wonder if there is no significant difference between the two investments. As an investor even a smaller margin over time can have a huge impact on your overall wealth creation journey.
In this way, you can stay invested and have a consistent income.
| Options | IRR | Maturity Benefit in Rs. | Death Benefit in Rs. |
| Worst Case Scenario (4% assumed gross return) | 4.16% | 1.12 cr | 1 cr |
| Best Case Scenario (8% assumed gross return) | 6.29% | 5.03 crs | 1 cr |
| PPF | 7.38% | 8.79 crs | 1 cr |
IRR of LIC Jeevan Umang vs. Term Insurance + ELSS + Hybrid Funds:
Now, let’s calculate the IRR for risk-oriented investment by using the LIC Jeevan Umang calculator. For example, let’s take ELSS.
Overall contribution: Rs. 5,33,790
Term Insurance:
Sum Assured: Rs. 1,00,00,000
Annual Term: Rs. 19,700
Tenure: 20 years
ELSS Contribution: Rs. 5,14,090
Assumed Rate of Return: 12% with investment risk
Then,
| Term insurance + ELSS | |||
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -5,33,790 | 1,00,00,000 |
| 41 | 2 | -5,33,790 | 1,00,00,000 |
| 42 | 3 | -5,33,790 | 1,00,00,000 |
| 43 | 4 | -5,33,790 | 1,00,00,000 |
| 44 | 5 | -5,33,790 | 1,00,00,000 |
| 45 | 6 | -5,33,790 | 1,00,00,000 |
| 46 | 7 | -5,33,790 | 1,00,00,000 |
| 47 | 8 | -5,33,790 | 1,00,00,000 |
| 48 | 9 | -5,33,790 | 1,00,00,000 |
| 49 | 10 | -5,33,790 | 1,00,00,000 |
| 50 | 11 | -5,33,790 | 1,00,00,000 |
| 51 | 12 | -5,33,790 | 1,00,00,000 |
| 52 | 13 | -5,33,790 | 1,00,00,000 |
| 53 | 14 | -5,33,790 | 1,00,00,000 |
| 54 | 15 | -5,33,790 | 1,00,00,000 |
| 55 | 16 | -5,33,790 | 1,00,00,000 |
| 56 | 17 | -5,33,790 | 1,00,00,000 |
| 57 | 18 | -5,33,790 | 1,00,00,000 |
| 58 | 19 | -5,33,790 | 1,00,00,000 |
| 59 | 20 | -5,33,790 | 1,00,00,000 |
| 60 | 21 | 8,00,000 | 1,00,00,000 |
| 61 | 22 | 8,00,000 | 1,00,00,000 |
| 62 | 23 | 8,00,000 | 1,00,00,000 |
| 63 | 24 | 8,00,000 | 1,00,00,000 |
| 64 | 25 | 8,00,000 | 1,00,00,000 |
| 65-80 | 26-41 | 8,00,000 | 1,00,00,000 |
| 81 | 42 | 8,00,000 | 1,00,00,000 |
| 82 | 43 | 8,00,000 | 1,00,00,000 |
| 83 | 44 | 8,00,000 | 1,00,00,000 |
| 84 | 45 | 8,00,000 | 1,00,00,000 |
| 85 | 18,46,17,587 | ||
| IRR | 9.02% | ||
Here, if we invest the money as we did in PPF, we will get an IRR of 9.02% and Rs. 18,46,17,587 as post-tax investment return.
LIC Jeevan Umang Policy being a traditional policy failed to produce that outpace inflation. Whereas the investment combo of Pure Term Insurance + ELSS + Hybrid Funds combined can generate an IRR of 9.07%.
These returns being inflation-beating returns will be more than handy for investors to embrace themselves for a bright Financial Future.
| Options | IRR | Maturity Benefit in Rs. | Death Benefit in Rs. |
| Worst Case Scenario (4% assumed gross return) | 4.16% | 1.12 cr | 1 cr |
| Best Case Scenario (8% assumed gross return) | 6.29% | 5.03 crs | 1 cr |
| ELSS | 9.02% | 18.46 crs | 1 cr |
Is LIC Jeevan Umang a good plan?
Here, you may think LIC Jeevan Umang gives a better return without taking any risk, so why should I choose another investment?
Why LIC Jeevan Umang is not a good plan?
You may think, that instead of following two or three investment steps, I can choose a single LIC Jeevan Umang policy.
Of course, you can, but here is the catch.
You can get the same in a Bank FD or RBI Bonds.
Also, compared to PPF and ELSS, LIC Jeevan Umang did not add any special value to your money.
Please keep up with me to know more hidden factors.
2.) GST:
LIC Jeevan Umang: If you have noticed when you pay the premium, you are also paying extra for the tax.
So, in LIC Jeevan Umang, you are paying more than you should and getting nothing in return for the extra you are paying.
So, in the end, your assumed gross return will be less than 6%.
PPF & Mutual Fund: But, in PPF or Mutual Fund Investment, you don’t have to pay any additional taxes.
Even in Mutual Funds, you will pay tax for your investment return, but the post-tax returns are better than the returns from Jeevan Umang.
And, finally, you don’t have to pay any tax for the interest you earn in PPF.
3.) Affordability:
LIC Jeevan Umang: Rs. 5000/month.
Mutual Fund & PPF: Rs. 500/month.
So, compare to LIC Jeevan Umang, everyone can afford to invest in Mutual Funds and PPF.
4.) Lock-in Period:
LIC Jeevan Umang: 2 years.
PPF: 15 years
Mutual Fund: Based on the plan chosen by the investor
5.) Liquidity option:
LIC Jeevan Umang: Partial withdrawal is not available. However, the policyholder can surrender the plan after 2 years or can avail of the loan.
PPF: Partial withdrawal is allowed after 5 years. An investor can also avail of the loan.
Mutual Fund: The liquidity option is available anytime.
6.) Regulatory Authority:
LIC Jeevan Umang: IRDA – Insurance Regulatory and Development Authority
Mutual Fund: SEBI – Securities and Exchange Board of India
Mutual Funds’ norms and fee structures are strictly regulated by SEBI. So, there won’t be any additional or hidden charges you need to pay for your investments.
PPF: DEA – Department of Economic Affairs (It is a Government Scheme)
7.) Charges:
LIC Jeevan Umang: The fee and charges are yet to be regulated by IRDA. So, there will be some hidden charges drawn by the insurance companies themselves. So, it is better to go through all the charges and fee structures before purchasing an insurance plan. Because these hidden charges can reduce your IRR.
PPF: There are no additional or hidden charges deducted from PPF.
Mutual Fund: The charges are regulated by SEBI. So, the charges are transparent.
8.) LIC Jeevan Umang Tax Benefit:
Is LIC Jeevan Umang tax free?
The tax benefit is available to all. Survival benefit, death benefit and maturity benefit are tax-free under Sec 10 (10D).
Note: The Finance Act, 2023, amended Section 10 (10D), of the Income Tax Act, 1961 to remove the exemption available to the sum received from a life insurance policy in case the aggregate premium for non linked policies policies issued on or after the 1 April exceeds ₹ 5 lakh.
9.) Inflation Beating Return:
LIC Jeevan Umang: We cannot say the value of your financial goal will not be the same as today. That’s why you need an inflation-beating return. And, as we can see in the example, LIC Jeevan Umang did not give us the inflation-beating return.
PPF: In PPF, we can get an investment return that is higher than LIC Jeevan Umang. But, still, it is a tax-saving investment plan with a 15-year maturity period. So, still, it barely can help you beat inflation.
Mutual Fund: Return on Mutual Fund can help you beat inflation in the long run compared to LIC Jeevan Umang and PPF.
Be it any long-term investment vehicle for that matter, only when the returns are inflation-beating ones, then only it can benefit an investor.
10.) Goal-Based Investment Planning:
LIC Jeevan Umang: LIC Jeevan Umang is an insurance and savings plan. So, you can use this plan either for your retirement or for your children’s marriage only if it gives you an inflation-beating return.
PPF: As mentioned earlier PPF is a tax saving plan with limited investment options. So, it cannot help you to plan your financial goal completely.
Mutual Fund: You can choose more than one mutual fund based on your financial goals. As per your financial goal, you can choose the investment scheme. You have control over how much you need to invest and how long to invest in mutual funds. Also, you can take a break from investing for a year or so. You can also increase your contribution based on your increment in income.
11.) Surrender or Cancel:
LIC Jeevan Umang:
The policyholder can cancel the policy during the free look period of 15 days from the date of the policy purchased or have to wait 2 years to surrender the policy.
PPF: The investor can close the account prematurely.
Mutual Fund: An investor can withdraw or switch the plan at any time.
12.) Insurance coverage:
LIC Jeevan Umang: Compared to pure term insurance, LIC Jeevan Umang is expensive.
Pure Term Insurance: You can avail of pure term insurance with high coverage at a low cost.
i)LIC Jeevan Umang VS LIC Jeevan Utsav
Will LIC Jeevan Utsav be a good suit for your investment portfolio.? Now to understand how the plan functions let’s analyse its key features.
- Access to Whole Life Insurance by just paying a limited premium.
- Choose from 2 plan options available.
- Both Premium Paying Term and Premium Payment can be chosen based on your convenience.
If you wish to know more about the suitability of the plan and IRR Analysis. We recommend you to read our article on:
LIC Jeevan Utsav – Complete Analysis and Review
LIC Jeevan Umang VS LIC Bima Shree
Is it worth considering the LIC Bima Shree plan a part of your investment portfolio.? Before we look to evaluate further. Let’s have a glimpse of its basic traits.
- This scheme is specially designed for High- Net Worth individuals.
- Premium Payment can be chosen based on convenience.
To know more about the plan’s advantages, disadvantages, and suitability. You can refer to our published article on:
LIC Bima Shree Review – Good or Bad Investment Option?
Final Verdict on LIC Jeevan Umang – Should you buy it?
Instead of checking the review of LIC Jeevan Umang on social media like Quora, Twitter,Facebook etc,please check with professional financial planners who are certified and experienced who will be giving you a customised recommendation.
After analysing all the factors, compared to other investments, LIC Jeevan Umang is still at a disadvantage in many ways. Most likely in such polices a portion of investors’ funds will be utilised for High Agent Commision as well. Therefore, LIC Jeevan Umang is a bad investment choice.
So, it is better to choose an alternative investment plan that gives you an inflation-beating return.
As for life cover, you can choose pure term insurance at a low cost with high coverage.
How about tax free maturity?
Your calculations does not include the maturity bonus per year calculation which is the main benefit of the Jeevan Umang plan. The official calculated number given by LIC is as follows
Plan : Jeevan Umang (945)
Age :31
Term :68
P.P.T. :15
AD & DB : 3750000
Death Sum Assured :3750000
Basic Sum Assured :3750000
1st year Premium With TAX 4.5% :
Yearly : 306815 (293603 + 13212)
Halfly : 154981 (148307 + 6674)
Quarterly : 78277 (74906 + 3371)
Monthly(ECS) : 26093 (24969 + 1124)
YLY Mode Average Prem/Day : 840
After 1st year Premium With TAX 2.25% :
Yearly : 300209 (293603 + 6606)
Halfly : 151644 (148307 + 3337)
Quarterly : 76591 (74906 + 1685)
Monthly(ECS) : 25531 (24969 + 562)
YLY Mode Average Prem/Day : 822
Total Approximate Paid Premium : 4509741
Approximate Return yearly from age of 46 to 100 or till life assured survives. : 300000
Approximate Return at age of 100 on survival:
S.A. : 3750000
Total Bonus : 33412500
Total Approximate Return at age of 100 on survival: 37162500
Above mentioned total bonus is taken as per corporation’s benefit illustration scenario-2.
Please re-do the calculations to reflect the outcome of your review.
Calculations are done based on the official benefit illustration from LIC.
My daughter how can she save her earning to get tax benefits.
There are several ways your daughter can save her earnings and get tax benefits:
Public Provident Fund (PPF): She can invest up to Rs. 1.5 lakh annually in PPF and enjoy tax-free interest accruals and withdrawals.
Employee Provident Fund (EPF): If she is employed, contributions to EPF qualify for tax benefits under Section 80C.
Equity Linked Savings Scheme (ELSS): Investing in ELSS mutual funds allows her to claim deductions up to Rs. 1.5 lakh under Section 80C, with the potential for higher returns compared to traditional tax-saving instruments.
National Pension System (NPS): Contributions to NPS qualify for deductions under Section 80CCD(1B) over and above the limit of Section 80C, providing additional tax benefits.
Tax-saving Fixed Deposits (FDs): Banks offer tax-saving FDs with a lock-in period of 5 years that qualify for deductions under Section 80C.
Encourage her to assess her financial goals, risk tolerance, and liquidity needs before deciding on the suitable investment options for tax benefits.
Can you explain the Jeevan umang calculations in detail.
The rate of return for LIC Jeevan Umang depends on a number of factors, including the assumed gross return, the policy term, and the premium paying term. The document calculates the IRR for LIC Jeevan Umang in two scenarios: a worst-case scenario with a 4% assumed gross return and a best-case scenario with an 8% assumed gross return. In the worst-case scenario, the IRR is 4.08% and the maturity benefit is Rs. 1,08,57,840. In the best-case scenario, the IRR is 6.25% and the maturity benefit is Rs. 5,03,15,000.
Thanks for the detailed information. Kudos to you for helping the people to understand better. Keep going.