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Insurance policy safeguards the financial interests of your family. Whole life insurance remains in force for the entire life of the insured individual, as long as premiums are paid. It provides a Death Benefit to the beneficiaries named in the policy upon the death of the insured. Let us review a Whole life policy from LIC called Jeevan Utsav.
In this article, let us review the LIC Jeevan Utsav policy in terms of benefits, Advantages(pros), and disadvantages(cons) and decide whether investing in LIC Jeevan Utsav is a Good or Bad option for your investment and life cover.
Let’s get started!
Table Of Contents
1.) An overview of LIC Jeevan Utsav
2.) What are the Features of LIC Jeevan Utsav? – Analysis
3.) Who is Eligible for LIC Jeevan Utsav? Analysis with Illustration
4.) What are the Benefits under LIC Jeevan Utsav?
5.) What is the Grace period, Paid-up, and Revival of LIC Jeevan Utsav? A Systematic Analysis
6.) Free Look Period of LIC Jeevan Utsav – Analysis
7.) What are the Advantages of LIC Jeevan Utsav?
8.) What are the disadvantages of LIC Jeevan Utsav?
9.) Research methodology of LIC Jeevan Utsav – Analysis
- Benefit Illustration – IRR(Internal rate of Return i.e. Interest rate) Analysis
10.) LIC Jeevan Utsav vs Other Investment Options
- LIC Jeevan Utsav Vs. Term Insurance + PPF / ELSS
- LIC Jeevan Utsav vs LIC Jeevan Akshay – VII
- LIC Jeevan Utsav vs LIC Jeevan Labh
11.) LIC Jeevan Utsav vs Other Investment Options – Review Conclusion
12.) Final Verdict on LIC Jeevan Utsav – Good or Bad Investment Option?
1.) What is LIC Jeevan Utsav?
It is a Non-Linked, Non-Participating, Individual, Savings, Whole Life Insurance plan. This plan provides financial support to the family in case of unfortunate death of Life Assured and Survival Benefits in the form of Regular Income Benefits or Flexi Income Benefits as per the option chosen for the surviving policyholder.
Refer to the official Brochure of LIC Jeevan Utsav for more policy details.
2.) What are the Features of LIC Jeevan Utsav? – Analysis
- Whole life insurance with limited premium payment
- Two options are available to choose the benefit under the plan
- Option I – Regular Income Benefit
- Option II – Flexi Income Benefit
- Flexibility to choose Premium Paying Term from 5 Years to 16 Years
- Premiums can be paid regularly at yearly, half-yearly, quarterly, or monthly intervals
- Guaranteed Additions throughout Premium Paying Term
3.) Who is Eligibile for LIC Jeevan Utsav? Analysis with Illustration
| Premium Paying Term | 5 to 16 Years |
| Minimum Age at Entry | 90 days – 8 years |
| Maximum Age at Entry | 59 – 65 years |
| Maximum Premium ceasing age | 75 years |
| Minimum Age – Regular / Flexi Income | 18 years |
| Minimum Basic Sum Assured | ₹ 5,00,000 |
| Maximum Basic Sum Assured | No limit |
4.) What are the Benefits under LIC Jeevan Utsav?
i.) Death Benefit – Review
Death Benefit of LIC Jeevan Utsav is equal to “Sum Assured on Death” along with accrued Guaranteed Additions shall be payable, provided the LIC Jeevan Utsav policy is in force. “Sum Assured on Death” is defined as higher of
- ‘Basic Sum Assured’ or
- ‘7 times of Annualized Premium’.
- This Death Benefit shall not be less than 105% of total premiums paid up to the date of death.
ii.) LIC Jeevan Utsav – Review of Survival benefits
Option I – Regular Income Benefit: On survival of Life Assured, Regular Income Benefit equal to 10% of Basic Sum Assured shall be payable at the end of each policy year starting from the year as specified in the table below, provided all due premiums have been paid.
Option II – Flexi Income Benefit: On survival of Life Assured, the policyholder shall be eligible for Flexi Income Benefit equal to 10% of Basic Sum Assured at the end of each policy year starting from the year as specified in the table below, provided all due premium have been paid. LIC Jeevan Utsav Policyholders shall have the flexibility to defer and accumulate such Flexi Income Benefits.
| Premium Paying Term | Regular Income Benefit / Flexi Income Benefit Start Year |
| 5 years | 11th policy year |
| 6 years | 11th policy year |
| 7 years | 11th policy year |
| 8 years | 11th policy year |
| 9 years | 12th policy year |
| 10 years | 13th policy year |
| 11 years | 14th policy year |
| 12 years | 15th policy year |
| 13 years | 16th policy year |
| 14 years | 17th policy year |
| 15 years | 18th policy year |
| 16 years | 19th policy year |
iii.) Maturity Benefit of LIC Jeevan Utsav
Maturity Benefit is not available under this plan.
iv.) Guaranteed Additions of LIC Jeevan Utsav
Under an in-force LIC Jeevan Utsav policy, the Guaranteed Additions shall accrue at the rate of Rs. 40 per thousand Basic Sum Assured at the end of each LIC Jeevan Utsav policy year during the Premium Paying Term.
5.) What is the Grace period, Paid-up, Revival of LIC Jeevan Utsav? A Systematic Analysis
i.) Grace period
In LIC Jeevan Utsav, a grace period of 30 days shall be allowed for payment of yearly half-yearly, or quarterly premiums and 15 days for monthly premiums from the date of the First Unpaid Premium.
ii) Paid-up
If less than two full years’ LIC Jeevan Utsav premiums have been paid in respect of this policy and any subsequent premium is not duly paid, all the benefits under this LIC Jeevan Utsav policy shall cease after the expiry of the grace period from the date of First Unpaid Premium and nothing shall be payable.
If, after at least two full years’ LIC Jeevan Utsav premiums have been paid and any subsequent premiums are not duly paid, this LIC Jeevan Utsav policy shall not be wholly void but shall subsist as a paid-up policy till the life assured survives or policy terminates, whichever is earlier.
iii.) Revival
A lapsed LIC Jeevan Utsav policy can be revived, within a period of 5 consecutive years from the date of First Unpaid Premium.
6.) Free Look Period of LIC Jeevan Utsav – Analysis
If the LIC Jeevan Utsav Policyholder is not satisfied with the “Terms and Conditions” of the policy, the LIC Jeevan Utsav policy may be returned to the Corporation within 30 days from the date of receipt of the electronic or physical mode of LIC Jeevan Utsav Policy Document, whichever is earlier.
When can you surrender LIC Jeevan Utsav? The LIC Jeevan Utsav policy can be surrendered by the policyholder at any time provided two full years’ premiums have been paid. On surrender of the LIC Jeevan Utsav policy, a higher Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV) shall be payable.
7.) What are the Advantages of LIC Jeevan Utsav?
- Option to enhance coverage by opting for riders on payment of additional premium.
- Option to take Death Benefit in Instalments instead of lumpsum amount.
- Takes care of liquidity needs through loan facility.
- The benefit of an attractive High Sum Assured Rebate.
- All the benefits under the policy are guaranteed.
8.) What are the Disadvantages of LIC Jeevan Utsav?
- Though the Survival Benefit is guaranteed, you get a flat amount throughout your lifetime.
- There is no Maturity Benefit under the policy.
- The guaranteed additions are payable with the Death Benefit and not with the Survival Benefit.
9.) Research methodology of LIC Jeevan Utsav – Analysis
Life cover and Survival Benefit till your lifetime is the specialty of LIC Jeevan Utsav. Our main agenda of this review is to calculate the benefits you get from the LIC Jeevan Utsav policy in terms of percentage. So that, it is easier for you to compare it with other investment returns. For this, let us calculate the Internal Rate of return of LIC Jeevan Utsav by taking a quote from the portal.
Benefit Illustration – IRR(Internal rate of Return i.e. Interest rate) Analysis
A 35-year-old male buys LIC Jeevan Utsav for a Sum Assured of ₹ 10 Lakhs. The premium paying Term is 15 years and the LIC Jeevan Utsav policy term is 65 years. He pays an annualised premium of ₹ 64,500.
| Male | 35 years |
| Sum Assured | ₹ 10 Lakhs |
| Policy Term | 65 years |
| Premium paying Term | 15 years |
| Annualised premium | ₹ 64,500 |
Since it is a whole-life policy, we have assumed a life expectancy of 85 years of age. So, he receives a Survival Benefit of ₹ 1 Lakh till his lifetime and after his lifetime Death Benefit to Nominee.
| Age | Year | Annualised premium / Survival Benefit | Death Benefit |
| 35 | 1 | -64,500 | 10,00,000 |
| 36 | 2 | -64,500 | 10,00,000 |
| 37 | 3 | -64,500 | 10,00,000 |
| 38 | 4 | -64,500 | 10,00,000 |
| 39 | 5 | -64,500 | 10,00,000 |
| 40 | 6 | -64,500 | 10,00,000 |
| 41 | 7 | -64,500 | 10,00,000 |
| 42 | 8 | -64,500 | 10,00,000 |
| 43 | 9 | -64,500 | 10,00,000 |
| 44 | 10 | -64,500 | 10,00,000 |
| 45 | 11 | -64,500 | 10,00,000 |
| 46 | 12 | -64,500 | 10,00,000 |
| 47 | 13 | -64,500 | 10,00,000 |
| 48 | 14 | -64,500 | 10,00,000 |
| 49 | 15 | -64,500 | 10,00,000 |
| 50 | 16 | 0 | 10,00,000 |
| 51 | 17 | 0 | 10,00,000 |
| 52 | 18 | 0 | 10,00,000 |
| 53 | 19 | 1,00,000 | 10,00,000 |
| 54 | 20 | 1,00,000 | 10,00,000 |
| 55 | 21 | 1,00,000 | 10,00,000 |
| 56 | 22 | 1,00,000 | 10,00,000 |
| 57 | 23 | 1,00,000 | 10,00,000 |
| 58 | 24 | 1,00,000 | 10,00,000 |
| 59 | 25 | 1,00,000 | 10,00,000 |
| 60 | 26 | 1,00,000 | 10,00,000 |
| 61 | 27 | 1,00,000 | 10,00,000 |
| 62 | 28 | 1,00,000 | 10,00,000 |
| 63 | 29 | 1,00,000 | 10,00,000 |
| 64 | 30 | 1,00,000 | 10,00,000 |
| 65 | 31 | 1,00,000 | 10,00,000 |
| 66 | 32 | 1,00,000 | 10,00,000 |
| 67 | 33 | 1,00,000 | 10,00,000 |
| 68 | 34 | 1,00,000 | 10,00,000 |
| 69 | 35 | 1,00,000 | 10,00,000 |
| 70 | 36 | 1,00,000 | 10,00,000 |
| 71 | 37 | 1,00,000 | 10,00,000 |
| 72 | 38 | 1,00,000 | 10,00,000 |
| 73 | 39 | 1,00,000 | 10,00,000 |
| 74 | 40 | 1,00,000 | 10,00,000 |
| 75 | 41 | 1,00,000 | 10,00,000 |
| 76 | 42 | 1,00,000 | 10,00,000 |
| 77 | 43 | 1,00,000 | 10,00,000 |
| 78 | 44 | 1,00,000 | 10,00,000 |
| 79 | 45 | 1,00,000 | 10,00,000 |
| 80 | 46 | 1,00,000 | 10,00,000 |
| 81 | 47 | 1,00,000 | 10,00,000 |
| 82 | 48 | 1,00,000 | 10,00,000 |
| 83 | 49 | 1,00,000 | 10,00,000 |
| 84 | 50 | 1,00,000 | 10,00,000 |
| 85 | 51 | 16,00,000 | 10,00,000 |
| IRR | 5.65% |
The IRR calculation results in to be 5.65% for the survival and Death Benefit under LIC Jeevan Utsav. This is a whole-life policy, so obviously, the Death Benefit goes into the hands of the nominee. The LIC Jeevan Utsav policyholder just enjoys the Survival Benefit as long as he survives.
For a long-term policy, the IRR should be higher than the inflation rate. Here in LIC Jeevan Utsav, the IRR is lower than inflation. Also, the Survival Benefit is not increasing (step-up income) to cope with the inflation.
10.) LIC Jeevan Utsav vs Other Investment Options
Catering the regular income needs is not beneficial to investors unless it is adjusted to inflation. In order to get regular cash flow, you can invest in better-yielding instruments and accumulate the required corpus. Let us assume the same premium paid under LIC Jeevan Utsav illustration is invested in a better yielding option and try to figure out the returns for the same.
i.) LIC Jeevan Utsav Vs. Term Insurance + PPF / ELSS
A Pure Term Policy for a sum Insured of ₹ 10 Lakhs would cost ₹ 15,600. The Policy Term is 35 years and the Premium Paying Term is 10 years. In the earlier illustration, the Premium Paying Term is 15 years. So, in the initial 10 years, the Pure Term insurance premium is paid first and the balance is invested. In the next 5 years, the full amount is available for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10 Lakhs |
| Policy Term | 35 years |
| Premium paying Term | 10 years |
| Annualised premium | ₹ 15,600 |
| Investment | ₹ 48,900 |
Select an appropriate investment avenue for wealth accumulation. Both equity and debt avenues are shown here for illustrative purposes. The accumulated corpus during the 15-year investment period is later utilised for regular annual cash flow which is similar to Survival Benefit under LIC Jeevan Utsav.
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death Benefit | Term Insurance premium + ELSS | Death Benefit |
| 35 | 1 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 36 | 2 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 37 | 3 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 38 | 4 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 39 | 5 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 40 | 6 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 41 | 7 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 42 | 8 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 43 | 9 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 44 | 10 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 45 | 11 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 46 | 12 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 47 | 13 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 48 | 14 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 49 | 15 | -64,500 | 10,00,000 | -64,500 | 10,00,000 |
| 50 | 16 | 0 | 10,00,000 | 0 | 10,00,000 |
| 51 | 17 | 0 | 10,00,000 | 0 | 10,00,000 |
| 52 | 18 | 0 | 10,00,000 | 0 | 10,00,000 |
| 53 | 19 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 54 | 20 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 55 | 21 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 56 | 22 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 57 | 23 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 58 | 24 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 59 | 25 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 60 | 26 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 61 | 27 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 62 | 28 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 63 | 29 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 64 | 30 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 65 | 31 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 66 | 32 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 67 | 33 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 68 | 34 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 69 | 35 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 70 | 36 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 71 | 37 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 72 | 38 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 73 | 39 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 74 | 40 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 75 | 41 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 76 | 42 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 77 | 43 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 78 | 44 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 79 | 45 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 80 | 46 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 81 | 47 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 82 | 48 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 83 | 49 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 84 | 50 | 1,00,000 | 10,00,000 | 1,00,000 | 10,00,000 |
| 85 | 51 | 33,94,192 | 10,00,000 | 98,65,268 | 10,00,000 |
| IRR | 6.24% | 7.53% | |||
Under the PPF account (debt), the accumulated corpus is ₹ 14.22 Lakhs. This amount is invested in a 7% return instrument to withdraw annually ₹ 1 Lakh. And finally, at the age of 85 years, the investment is fully withdrawn to match the Death Benefit. The IRR calculation for this scenario results in 6.24%.
Under the ELSS fund (equity), the pre-tax corpus value is ₹ 21.52 Lakhs and the post-tax value is 20.28 Lakhs. This amount is invested in a 7% return instrument to withdraw annually ₹ 1 Lakh. And finally, at the age of 85 years, the investment is fully withdrawn to match the Death Benefit. The IRR calculation for this scenario results in 7.53%.
| ELSS Tax Calculation | |
| Maturity value after 15 years | 21,52,732 |
| Less | |
| Purchase price | 8,11,500 |
| Long-term capital gains | 13,41,232 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 12,41,232 |
| Tax paid on LTCG | 1,24,123 |
| Maturity value after tax | 20,28,609 |
This IRR analysis depicts that, a whole life policy is not an appropriate investment avenue for fetching regular income. There are better alternate options where you can accumulate the required corpus and invest it as per your wish. In the raising rate scenario, you have the opportunity to switch your investment. In LIC Jeevan Utsav, your funds get locked and you are supposed to receive the standard Survival Benefit.
ii.) LIC Jeevan Utsav vs LIC Jeevan Akshay – VII
Let’s look at some of the features of LIC Jeevan Akshay – VII,
- There are ten alternatives available for annuities.
- You can select an annuity mode that best suits your needs, from monthly to quarterly to half-yearly to annual.
- An annuity is guaranteed to you at the selected interval.
Read the complete review of LIC Jeevan Akshay – VII to find out the advantages and disadvantages of this plan.
iii.) LIC Jeevan Utsav vs LIC Jeevan Labh
let’s look at some of the features of LIC Jeevan Labh,
- You get the advantage of a limited Premium Payment.
- A Final Additional Bonus and a Simple Revisionary Bonus are among the rewards.
- The selected term for paying premiums determines the Policy Term.
Read the complete review LIC Jeevan Labh to find out whether this is a Good or Bad plan option.
11.) LIC Jeevan Utsav vs Other Investment Options – Review Conclusion
After comparing LIC Jeevan Utsav with all other alternate plan options, we can claim without much doubt that PPF or ELSS will give better returns and Term Insurance is the way to get complete protection instead of investment plus insurance options like LIC Jeevan Utsav.
12.) Final Verdict on LIC Jeevan Utsav – Good or Bad Investment Option?
LIC Jeevan Utsav provides coverage for the entirety of the policyholder’s life and the Death Benefit acts as a legacy to the nominee. A portion of your premium is invested to accumulate corpus. Later, it is paid as a Survival Benefit throughout your lifetime.
All the benefits are guaranteed under LIC Jeevan Utsav. But when we worked the rate of return, it was not beneficial to an investor in the long run. The main reason for this low return is insurance and investment are clubbed.
Alternatively, a corpus accumulated through a diversified investment portfolio will fetch you regular cash flow. Also, life cover is necessary until your working years. Beyond that period, your retirement corpus will take care of you. Have adequate life cover till your retirement.
Choosing between investment products depends on your individual financial situation, long-term goals, and risk tolerance. Instead of searching social media sites like Quora, Facebook, Twitter, etc, it’s often wise to consult with a financial advisor to determine if an investment product aligns with your needs and objectives.
Thank you for the review.
You haven’t explained about Flexi option, providing 5.5% compounding interest which can be used to offset the inflation, if the survival benefit is not received for a few initial years.
Your PPF / ELSS IRR is calculated, considering that you will invest the maturity value after 15 years of contribution @ the rate of 7% return.
Can you guarantee that 7% return avenue will be available after 15 years. If it’s not available what will you do for guaranteed returns.
Is there any guarantee that you will be able to invest the maturity corpus received at the end of 15th year. When money comes to you, there may be several other expenses waiting to eaten away the money in hand.
The maturity here is tax free under section
10 10D.
By adding Term rider equal to the sum assured, one can enjoy higher or double the risk cover for 35 years or upto age of 70… just by paying a little extra.
You can’t always compare two different products with two different purposes to be met with.
Jeevan Utsav provides guaranteed return till life time. That benefit is unmatchable is my humble opinion.
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