'LIC Jeevan Saral' Policy Review

LIC’s Jeevan Saral is a participating endowment assurance plan that provides you death benefit like a term plan and a maturity benefit at the end of the policy term. Also since it is a participating plan, it would participate in the profits of the company and get its share of the profits in the form of loyalty additions which are terminal bonuses payable along with death benefit or maturity benefit.



FEATURES:

· Maturity value depends on the age at entry of the life assured.


INVESTMENT MODES:

You have the option of yearly, half-yearly, quarterly and monthly.
In monthly mode, you have to pay through ECS.

RETURNS


· Maturity benefit:

· Maturity sum assured + loyalty additions payable as lump sum.


· Death benefit:

· 250 times the monthly premium

· Loyalty additions

· Return of premiums excluding the first year premiums and extra/rider premium


WITHDRAWAL:

No partial withdrawal has been mentioned under this policy. However a partial surrender has been mentioned within the policy.


LOANS FACILITY:

No loans facility under this plan.


SURRENDER:

Surrender value will be greater of guaranteed surrender value or special surrender.

Guaranteed Surrender Value: This value will be available to you if you have paid the premiums for atleast 3 full years and is equal to 30% of the total premiums paid excluding the premiums paid in the first year and all the extra premiums and premiums for accident benefit/term rider.
Special Surrender Value:

· 80% of the Maturity sum assured if the policy is in force for 3 or more years but less than 4 years.

· 90% of the Maturity sum assured if the policy is in force for 4 or more years but less than 5 years.

· 100% of the Maturity sum assured if the policy is in force for 5 or more years.


REVIEW OF THE POLICY:

In participating policies, the policy gets the share of profits which the company earns and adds it to the payout at the time of death or maturity, whereas loyalty is a guaranteed addition made at regular intervals and is usually a percentage of premium or fund value and is generally disclosed in the brochure. But here, participation has been termed as loyalty additions and the amount has not been disclosed because profits are never certain.

What they have tried to achieve in this policy is participation in the name of loyalty additions with no guarantee. So this policy showcases to a naive investor as if loyalty additions are there, which actually are not.

To a naive investor it may appear that loyalty additions are present but actually they are not.
Additional and optional benefits could have been disclosed and explained. Through this explanation, the riders, if applicable to this plan could have been disclosed and the costs or the additional premiums associated with it could have been explained.

Maximum and minimum premium and sum assured have not been mentioned on the LIC site. Moreover sum assured is not fixed and is linked to the amount of premium paid. So for such details you will have to get in touch with the sales persons or directly call the company.

There are no loans under this policy and the terms and conditions for partial surrender have not been disclosed. It would have been much better if these details would have been disclosed. One could then compare it with other existing products in the market and could find out the most suitable one.

See below the calculation charts that might help you to choose whether to go with this policy or not.

Click on the image to see in bigger size