LIC launches Jeevan Kiran, a return-of-premium term life insurance policy

The minimum sum assured under the policy, which comes with tenures of 10-40 years, is Rs 15 lakh.

The Life Insurance Corporation of India (LIC) has announced the launch of Jeevan Kiran, a new non-linked, non-participating life insurance policy that ‘returns’ the premiums paid by policyholders at maturity.

In simple terms, policyholders will, if they survive the term, get back the total premium they paid under the policy, not including any extra premium, rider premium or taxes paid.

Also read: Want to take out a life insurance policy? Here are the term plans on offer

In case of death during the policy tenure, the basic sum assured, an amount equal to seven times the annual premium or 105 percent of total premiums paid until then, whichever is higher, will be handed out to the policyholders’ dependents.

In the case of single premium plans, nominees will receive the basic sum assured or 125 percent of the single premium, whichever is higher.

Policyholders have the option to receive the maturity benefit over a period of five years, in a staggered manner. They can choose this option for the death benefit payable to their nominees as well.

Also read: LIC’s Jeevan Azad: Should you buy a traditional endowment policy with assured returns?

The minimum sum assured under the policy, which comes with tenures of 10-40 years, is Rs 15 lakh. The minimum instalment will be Rs 3,000 under the regular premium option and Rs 30,000 under the single premium variant.

Premiums for smokers and non-smokers will vary, with the former having to pay higher premiums. Those who refuse to undergo medical check-ups will be charged the premiums applicable to smokers.

The policy can be purchased by individuals in the age group of 18-65 years.
The policy comes with two optional covers that bolster the basic protection provided by the base policy - Accidental Death & Disability Benefit Rider and Accident Benefit Rider.

Moneycontrol’s take

A simple, standard-term plan that pays out the sum assured in case of the policyholder’s death is a must in every individual’s portfolio. Such policies are pure risk covers where the policyholder does not get any amount as maturity proceeds at the end of the tenure.

Return-of-premium plans are designed for individuals who feel that premiums paid under pure-term plans ‘get wasted’. However, return-of-premium plans are costlier than regular-term policies. You would be better off investing the additional amount in other, better-yielding equity or debt avenues instead.