The Life Insurance Corporation of India (LIC) has introduced a new life insurance plan, Jeevan Utsav, offering a 10% income benefit based on the sum assured. This non-linked, non-participating policy provides guaranteed benefits and flexible payout options.
With a minimum sum assured of Rs 5 lakh and premium paying terms ranging from five to 16 years, policyholders can opt for two payout options: regular income and flexi income benefits. The income benefits will commence between the 11th and 19th policy years, varying with the selected premium paying term.
Under the regular income option, recipients receive 10% of the chosen basic sum assured starting from the 11th policy year, contingent upon the premium paying term. For longer premium terms, such as 10 years, the payouts begin from the 13th policy year.
Alternatively, the flexi income benefit allows yearly payouts of 10% of the basic sum assured, with the added flexibility of deferring these payments. Deferred benefits accrue interest at a rate of 5.5% annually, compounding yearly until withdrawal, surrender, or death, offering potential earnings on accumulated balances.
Policyholders can request a one-time withdrawal of up to 75% of the accumulated benefits annually, with the remaining balance continuing to earn 5.5% interest. In case of policyholder death, dependents receive a death benefit equivalent to the ‘Sum Assured on death’ specified in the policy, along with earned guaranteed additions.
Adhering to regulatory guidelines, the sum assured on death is at least seven times the annual premiums, ensuring a minimum death benefit of 105% of the total premiums paid until the policyholder’s demise.