Insurance PlansLIC of India

Why LIC’s Jeevan Utsav(Plan 871) is More Than Just Life Insurance

(Last Updated On: February 4, 2024)

In an era marked by financial uncertainties and extended lifespans, securing a guaranteed income for the twilight years is more crucial than ever. It’s not just about ensuring a comfortable retirement; it’s about building a financial cushion that can weather life’s unpredictabilities. This is where schemes like LIC’s Jeevan Utsav Plan come into play, offering a blend of security and stability in a single investment. A smart choice today can transform your retirement into a period of relaxation and financial freedom.

Remember, planning for retirement isn’t just a necessity; it’s a step towards a worry-free, fulfilling future. Let’s dive into how LIC’s Jeevan Utsav Plan can be your ally in this journey.

Do not save what is left after spending, but spend what is left after saving.
Warren Buffett
Investor

Explore the multifaceted benefits and features of LIC’s Jeevan Utsav Plan 871, a plan designed not just for life coverage but also for a financially secure future.

Description: Non-Linked, Non-Participating, Individual, Whole Life Savings Plan. In short, the benefits are guaranteed and will not change in the future.

  • Regular Income Benefit: 10% of Basic Sum Assured annually post-premium payment term.
  • Flexi Income Benefit: Option to accumulate and defer 10% of Basic Sum Assured with 5.5% compound interest.
  • Description: ‘Sum Assured on Death’ plus accrued Guaranteed Additions, payable if the policy is in force.

In LIC’s Jeevan Utsav Plan 871, the “Sum Assured on Death” is a crucial component of the death benefit. It’s essentially the guaranteed amount paid to the beneficiaries if the insured person passes away. This sum is the higher of either the ‘Basic Sum Assured’ or ‘7 times the Annualized Premium’. The Annualized Premium here excludes taxes, rider premiums, and certain other specific charges. Additionally, the death benefit is guaranteed to be at least 105% of all premiums paid until the date of death, ensuring a minimum level of financial protection.

Rate: ₹40 per thousand Basic Sum Assured annually during premium payment term.

  • Terms: Ranging from 5 to 16 years.
  • Modes: Yearly, Half-Yearly, Quarterly, Monthly.
Premium Paying TermRegular Income Benefit / Flexi Income Benefit Start Year
5 years11th policy year
6 years11th policy year
7 years11th policy year
8 years11th policy year
9 years12th policy year
10 years13th policy year
11 years14th policy year
12 years15th policy year
13 years16th policy year
14 years17th policy year
15 years18th policy year
16 years19th policy year

The income benefit will start at the end of the stipulated period mentioned above.

Available Riders: Term Assurance Rider, Critical Illness Benefit Rider, Premium Waiver Benefit Rider.

Eligibility: Available after 2 years of premium payment.

Terms: Can be surrendered after 2 years with a value based on higher of Guaranteed or Special Surrender Value.

Example of Mr. Kiran's Investment in LIC Jeevan Utsav Plan 871

Background:
  • Name: Mr. Kiran
  • Age at Policy Entry: 30 Years
  • Sum Assured: ₹50,00,000
  • Premium Payment Term: 16 Years
  • Annual Premium: 2,93,000 + GST
LIC's Jeevan Utsav plan 871 Benefit Pattern

The “Smart – All In One Calculator” Android app is a versatile tool designed by InsuranceFunda, specifically to assist insurance advisors of Life Insurance Corporation of India. This app is highly beneficial for creating detailed, customized insurance plan presentations, tailored to individual ages and premium payment options. Key features include a premium calculator for all active plans, expected maturity benefits, tax benefit calculations, incorporation of all riders, settlement options on maturity, and graphical representations of benefits. Users can easily generate and share comprehensive PDF reports with clients, making it an invaluable tool for both insurance advisors and clients looking to understand various insurance plans in depth. You can download the app from the Google Play Store.

For more details and to download the app, visit Smart – All In One Calculator on PlayStore.

Benefit and coverage table - Jeevan Utsav

Understanding the Flexi Income Benefit in LIC's Jeevan Utsav Plan

The Flexi Income Benefit in LIC’s Jeevan Utsav Plan offers flexibility and an additional income stream. After the policy’s premium payment term, the policyholder receives 10% of the Basic Sum Assured annually. This amount can be deferred and accumulated, with LIC paying 5.5% per annum as compound interest.

Policyholders have the option to withdraw up to 75% of the accumulated Flexi Income Benefit, including interest, once a year. The remaining balance continues to accumulate interest. Upon death or surrender of the policy, the total accumulated Flexi Income Benefit, including interest, becomes payable.

This option provides a combination of liquidity and growth, making it a versatile choice for policyholders.

Who Should Consider LIC's Jeevan Utsav Plan?

LIC’s Jeevan Utsav Plan is ideal for individuals seeking a versatile financial product that combines life insurance with a savings component. It’s particularly suitable for those who value the security of a guaranteed income stream, making it an excellent choice for long-term financial planning.

This plan can be a strategic fit for people at various life stages, whether they’re young professionals planning for future financial stability, parents securing their children’s future, or individuals nearing retirement age looking for a reliable income source. Its flexibility in premium payment terms and the option of a deferred income benefit make it adaptable to a wide range of financial goals and life situations.

With Jeevan Utsav, policyholders can look forward to a plan that not only provides life coverage but also ensures a stable financial future.

When LIC's Jeevan Utsav Plan May Not Be the Ideal Choice for you...

LIC’s Jeevan Utsav Plan may not be the best fit for everyone.

Individuals seeking high returns on investment within a short period may find the plan less suitable due to its nature as a long-term financial product with moderate returns. Those who prefer market-linked investment options or wish to actively manage their investment portfolio might also find this plan less appealing, as it offers fixed benefits and lacks the potential for high market-driven gains.

Additionally, it’s less ideal for people who require high liquidity in the short term, as it is designed to provide benefits over a longer horizon.

Wrapping Up: The Verdict on LIC's Jeevan Utsav Plan 871

In conclusion, LIC’s Jeevan Utsav Plan 871 stands out as a comprehensive financial solution that merges the benefits of life insurance with a savings mechanism.

It’s tailored for those who prioritize guaranteed income and financial security, particularly in their later years. While it offers flexibility, guaranteed additions, and various benefits, it’s crucial to assess its suitability based on individual financial goals and risk preferences. For those seeking higher market-linked returns or immediate liquidity, exploring other investment avenues might be more beneficial.

Ultimately, this plan is about securing a stable and protected financial future, making it a valuable consideration for long-term financial planning.

Read More: LIC’s Jeevan Umang – Every thing you need to know 

Anish L J

Anish L J is a 'Financial Planner' and member of Chartered Insurance Institute(CII), London and Insurance Institute of India. He is also a finance, insurance and software consultant. He thoroughly follows the developments in finance, insurance, and other related sectors.