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LIC Jeevan Anand – Review

January 7th, 2010 by rupeetalk-research-team

Endowment plans were the darling of insurance companies, before ULIPs came into the picture. Over the years they might have lost their top slot but are not out of demand; conservative investors still prefer them for their survival benefits, which are missing in term plans. ‘LIC Jeevan Anand’ is one such popular endowment assurance plan which also comes with whole life benefits.

Product highlights/benefits

An endowment assurance cum whole-life plan that provides survival benefits in the form of a lump sum at the end of term and also pays an additional sum assured to the nominee on the death of insured till the end of life
In addition to sum assured, it pays simple reversionary bonuses and terminal bonus, if any

Highlights

It’s a unique endowment plan that offers whole life benefits at a little extra cost
Whole life risk cover continues even after the premium paying term is over, till the death of the insured
Double accident benefit is available during the premium paying term and thereafter up to age 70

An additional accidental cover (up to Rs. 5 lakh) is paid as a lump sum on death due to accident, up to the age of 70. No additional premium required.
Option to get extra protection at a very nominal cost
Guaranteed surrender value up to 30 per cent of the total premium paid, excluding first-year premium and other riders’ premium after 3 policy years
Policy available to people in the age group of 18-65 years. Premium paying term is 5-57 years.

Analysis

LIC Jeevan Anand provides the dual benefit of endowment and whole life plans, for a little extra premium. A 30-year-old individual will have to pay an annual premium of Rs. 20,978 for Rs. 5-lakh cover with a term of 25 years. Let’s see what benefits he will receive. LIC Jeevan Anand has a good bonus history since its inception in Feb. 2002. On an average, it has declared an annual bonus of Rs. 46.5 per thousand. For our calculation, we will take the average bonus at Rs. 45 per thousand (refer Table 1). Considering that LIC has distributed Final (Additional) Bonus (FAB) in its other schemes consistently, we assume an FAB of Rs. 550 per thousand in Jeevan Anand (in line with other schemes under similar conditions) at the end of term. As per Table 1, net return in this case comes to 6.60 per cent (approx.). Besides, the policyholder enjoys an accidental benefit of Rs. 5 lakh till the age of 70 and death benefit of Rs. 5 lakh (similar to the initial cover) till the end of his life. If we take into account these benefits, the return (gross of charges) will further increase for the policyholder.

Now take a look at Table 2. It presents endowment plans by other insurers. These plans are cheaper than LIC Jeevan Anand and have similar benefits. But they do not offer the whole life benefit. Moreover, the bonus rates announced in these products are not at par with LIC Jeevan Anand.

Thus, at the outset, LIC Jeevan Anand looks a little expensive than plain vanilla endowment plans but given the benefits in later years, the additional cost is justified.

Equating with other products

We always advise against mixing insurance with investment. As there are no similar products available in the market, we will compare LIC Jeevan Anand with a combination of a term plan and PPF (based on their benefits). But the term plan will provide cover till the age of 65 only, unlike in Jeevan Anand where whole life benefits continue till the end of the individual’s life. One can also combine a whole life policy with PPF. But again the policyholder will need to pay premium till the end of his/her life. This sets LIC Jeevan Anand apart from other non-ulip policies. Now, let us turn to Table 3 for a comparative analysis between Jeevan Anand and other asset classes. The term plan (SBI Life Shield) has been taken for an individual of 30 years for a period of 25 years for a sum of Rs. 5 lakh at an annual premium of Rs. 1,632. An additional accident cum disability benefit (Royal Sundaram Accident Shield) for Rs. 5 lakh has been taken at Rs. 589 per year. The remaining amount of Rs. 18,757 has been invested in other asset classes for a period of 25 years as mentioned in the table 3.

Tax benefits

Premium paid up to Rs. 1 lakh is tax exempt under Section 80C.
Maturity or death proceeds are tax free under Sec 10(10D).

Things to look into

The additional whole life benefit comes at an inflated price (refer Table 2).
Reversionary bonus, though announced regularly, is not guaranteed. Moreover, Final Additional Bonus (FAB) is also not guaranteed.

Recommendations

For whom: Conservative investors willing to put money for a longer period
Risk: Capital safe, but loyalty benefits are linked to performance of the company in future
Investment horizon: 5-57 years
Returns (post tax): Moderate in line with debt funds at different conditions. But unlike debt funds, it provides tax benefits under Sec 80C in addition.
Beats inflation: No, it won’t be able to beat inflation even in case of a longer term
Tax bracket: Preferable for all tax brackets
Alternatives: Whole life plan, PPF plus term plan, mutual fund (through SIPs) plus term plan, etc.

Published on January 7, 2010 · Filed under: Banking, Economy, Fixed Income, Insurance, Life insurance, Money management, Monthly income plan, Mutual Fund, Personal Finance; Tagged as: additional accident cum disability benefit, Endowment Assurance, Endowment Plans, Jeevan Anand, LIC Jeevan Anand, LIC Jeevan Anand Review, Life insurance, Royal Sundaram Accident Shield, SBI Life Shield, Whole Life Plan

54 Comments

54 Responses to “LIC Jeevan Anand – Review”

Manisha Deshmukh said on January 11th, 2010 at 10:18 pm

I have a lapsed jeevan anand policy, can it be started again?
rekharavindranath said on January 11th, 2010 at 10:45 pm

yes you can revive this policy

@Manisha Deshmukh
vikas said on January 11th, 2010 at 11:51 pm

yes.. you can revive it easily by filling a form and pay the pending premium with late fees if any, and the enjoy the benefits of this unique policy.. for any queries mail me at vikas_jain.insurance@yahoo.com @Manisha Deshmukh
Pramod K Dubey said on January 12th, 2010 at 7:04 am

Yes you can revive this policy by paying all due premium ( charges if any)
and enjoy benefits again.
H Radhakrishnan said on January 12th, 2010 at 7:11 am

I will be 58 years in Mar 2010 and have a Jeevan Anand policy with annual premium running from Mar 2003. What is the option available to get extra protection at a very nominal cost?
indronil roy chowdhury said on January 12th, 2010 at 9:41 am

In Jeevan Anand you have to take another point which is a lucrative one, you can opt for a redemption of the whole life cover at a discounted value, if you do so the returns get much more higher and justified, not necessary to keep it intact for next generation..the plan is a unique one..
Manoj Tiwari said on January 12th, 2010 at 10:09 am

I hv paid 2*25k nr abt emi for Jeevan anand for 5lac sumassrd for 21yrs tenure.
can reduce my targeted sumassurd 5lac to 2.5lac bcz presntly hvng no good earngng so would like to pay only 13k-14k only for the rest yrs…
Rohit Sharma said on January 12th, 2010 at 12:15 pm

sir,
i want to know that is there any policy which did n’t give insurance cover but it will give maximum amount on matuirty. and please explain on statistical format.
Satish Reddy said on January 12th, 2010 at 1:27 pm

i have Payed my yearly premium late with late fee amount does it affect in getting Bonus
Avinash Gokhale said on January 12th, 2010 at 3:51 pm

@Satish Reddy
No , now it will not affect your getting bonus.
Amit said on January 13th, 2010 at 8:35 am

I am 35 can u advice me a policy which will last long and will cover the accidental benefits upto maximum age and should be of maximum returns with low risk
Naga Chaitanya Kumae said on January 13th, 2010 at 11:42 am

Beneficial policy for all.
manoj kumar said on January 13th, 2010 at 7:46 pm

premium per year faiv thoushand & six thoushand samthing estalment
manoj kumar
Ranganatha said on January 15th, 2010 at 5:55 pm

Hi, there are some points which you are neglecting, i think so…
1. Have you taken the count of insurance charge while calculating the IRR?
2. You cannot compare jeevan Anand with other plans of other companies like comparing a apple with an orange. For endowment you have to compare with endowment and not with endowment + whole Life plan.
3. As indronil roy chowdhury says there is covet after the term which can be discounted. If you add the same thing, I am sure IRR will shoot up.
4. Term plan will not provide whole life cover, and the customer for ex. at 60 would not prefer to pay money for insurance cover.
5. why don’t you think this plan is better when you keep in mind of the new tax code, because there its clearly mentions that if the premium is less than 5% of Sum Assured then the maturity value will be tax free, which cannot be availed with other instruments.
Hope these points will help us to scrutinize the benefits of Jeevan Anand.
S Balaubramanian said on January 17th, 2010 at 7:55 pm

I am 61 (DOB 030548) Can I have this policy How much premium for 1lakh
Is it worth
vivek vyas said on January 18th, 2010 at 9:59 pm

There is no clearity about premiume holiday or cover Continues option in jivan anand,in such a case where customer is not able or want to pay more than 3 years premiume.if anybody have an idea about this pls let it confirm that what its all about.
Thanks Vivek vyas
expert witness said on January 22nd, 2010 at 2:00 pm

Hello…welcome, According to me Personal Finance Blogs will give good benefits, because here blogger will share their personal experience with the globe, so it will help us when we face such
situation.
prashant kambli said on January 24th, 2010 at 11:58 am

Yes.You can start (Revive) your Jeevan Anand Policy, if your policy has lapsed period less than five years.
prashant kambli said on January 24th, 2010 at 12:04 pm

Premium paid with late fee, doesn’t effect Bonus.Please pay your premiums regulary to avoid lapse of policy and late fee.
*Prashant Kambli (LIC Agent & Family Financial Advisor)
MOb. 9850553889
prashant kambli said on January 24th, 2010 at 1:31 pm

@S Balaubramanian
Yes. you can take Jeevan Anand policy.Today your age calculated as your date of birth, 61 yrs. 8 month and 21 days. so your age is 62yrs. You may take premium paying term for 13yrs.for Yearly premium Rs.12,178.00 at ordenery rate i.e.without any extra premium if any.If you registered this policy back dated for three months your age will calculate for age 61yrs. and your premium will be Rs.11,165.00 for 14yrs term.You will get Rs.1,00,000 + Bonus for premium paying term on maturity of policy and further free life insurance of Rs.1,00,000 for whole life and Accident insurance of Rs.2,00,000 upto age 70yrs. For any information about life insurance or any policy of LIC you may send mail or call to:
Mr. Prashant Kambli (LIC Agent & A Family Financial Advisor) E-Mail : prashant.kambli_lic@ymail.com
sadhana nirmal said on January 24th, 2010 at 1:39 pm

I am 42 years old.Which LIC Policy with high insurance and return suitable for me?
anurag said on January 26th, 2010 at 4:41 pm

yas @Manisha Deshmukh
puja said on January 27th, 2010 at 8:32 am

@Manisha Deshmukh

@Manisha Deshmukh
yes if you have paid the premium regularly for 3 years.
BernieR said on January 29th, 2010 at 3:28 pm

Greatings, Thank you! I would now go on this blog every day!
BernieR
jitender said on January 29th, 2010 at 7:14 pm

@Manisha Deshmukh
what is the last premium paid?if your unpaid premium should be less than 5 years you can renew the policy.
ardip negi said on January 30th, 2010 at 3:52 pm

sir,
i want to know about lic jeewan tarang plan please tel me about this plan
with illustration
thanking you
ardip negi
meera said on January 31st, 2010 at 5:43 pm

@ardip negi
you can mail me your mail id , I will send details of it .
meera said on January 31st, 2010 at 5:48 pm

@vivek vyas
This is traditionsl policy nd there is no premium holiday fascility available.
Whatever term you select, you have to pay premium for whole term.
vikas said on January 31st, 2010 at 11:37 pm

for brief details about Lic s j.tarang, send your details like name, dob, address, contact no. to my mail: vikas_jain.insurance@yahoo.com @ardip negi
vikas said on January 31st, 2010 at 11:41 pm

there are various policies in Lic that will suit you.. for infos pls send your details like name, dob, address, contact no. to my mail: vikas_jain.insurance@yahoo.com @sadhana nirmal
vikas said on January 31st, 2010 at 11:47 pm

jeevan anand and jeevan mitra are the apt policy for your needs you mentioned.. for brief explanation on these plans send your details like name, dob, address, contact no. to my mail: vikas_jain.insurance@yahoo.com @Amit
vikas said on January 31st, 2010 at 11:53 pm

yes, Lic has such policy too. wherein you get high security and it will prove you as a peaceful investment for years to come.. for details on such policy send your details like name, dob, address, contact no. also mention a line about your needs to my mail: vikas_jain.insurance@yahoo.com @Rohit Sharma
vikas said on February 1st, 2010 at 12:00 am

Sorry Manoj you cannot reduce your premium in these type of traditional policies of any company.. But yes with Lic there are couple of temporary solutions for your problem which will not affect the valuable poiicy you have took… for explanation send your details like your POLICY No. your name, dob, address, contact no. also mention a line about your needs to my mail: vikas_jain.insurance@yahoo.com @Manoj Tiwari
himmatlalsuman said on February 3rd, 2010 at 2:50 pm

i like to lic
prashant_kambli said on February 4th, 2010 at 8:43 am

@ardip negi
You may send your E-Mail ID. I will provide all information.My ID: prashant.kambli_lic@ymail.com
prashant_kambli said on February 4th, 2010 at 8:51 am

All information and services regarding LIC Policies.Send mail to: prashant.kambli_lic@ymail.com (LIC Agent & A Family Financial Advisor)
Aurangabad (Maharashtra) Mobile:9850553889, 0240-2370223
Milind said on February 9th, 2010 at 1:23 am

One point missing is that one gets the sum assured twice…once at maturity of policy alongwith bonus and then after death of insured
Basheer said on February 12th, 2010 at 10:09 pm

Please tell me upon maturity of Jeevan Anand and after I gat paid can I discontinue the life term which continues automatically and get additional payment?
Dolly said on February 14th, 2010 at 5:02 pm

Hi, Come On
Dolly
nesar said on March 2nd, 2010 at 6:07 pm

@Dolly
gooddd
AMIT DAS said on March 4th, 2010 at 10:21 pm

my daughter dob is 01/11/09. for her carrer purpose what is d idle policy from lic ?
AMIT said on March 4th, 2010 at 10:22 pm

affordable yearly premium is rs. 10000 a year.
Dharmin Maniar said on March 14th, 2010 at 12:18 pm

I think instead of going to Buy LIC’S JEEVAN ANAND one should have to opt combination of Term Plan + MF or Term Plan + NSC or Term Plan + PPF. A 30 YEARS OLD Male can get Rs. 50 lacs insurance for 25 years by paying annual premium of Rs. 5600+ Service tax (6178)(Religare iTerm plan). in jeevn Anand for 5 lacs insurance premium is as high as rs. 20978 (As mentioned in above article.) while Religare iTerm Plan Provide Rs. 50 lacs isurance by just paying Rs.5600+ S.TAX.
You can invest balance amoun (Jeevan Anand Premium 20978- iTerm Premium 6178= 14802)in MF / NSC/ PPF. this combination will generate more retrun than LIC’S JEEVAN ANAND.
Dharmin Maniar said on March 14th, 2010 at 12:22 pm

I think instead of revuve LIC’S JEEVAN ANAND youshould have to opt combination of Term Plan + MF or Term Plan + NSC or Term Plan + PPF. A 30 YEARS OLD Male can get Rs. 50 lacs insurance for 25 years by paying annual premium of Rs. 5600+ Service tax (6178)(Religare iTerm plan). in jeevn Anand for 5 lacs insurance premium is as high as rs. 20978 (As mentioned in above article.) while Religare iTerm Plan Provide Rs. 50 lacs isurance by just paying Rs.5600+ S.TAX.
You can invest balance amoun (Jeevan Anand Premium 20978- iTerm Premium 6178= 14802)in MF / NSC/ PPF. this combination will generate more retrun than LIC’S JEEVAN ANAND.
Tinku said on March 15th, 2010 at 8:39 pm

We got a Jeevan Anand( sum assured of Rs.2 Lacs) done for my wife at an annual premium of Rs.10554. While buying this policy we simply went as per the agent’s suggestion for saving tax under Sec.88. Lately, I tried to understand the details of the policy and realise that this policy will offer the sum assured after the policy period expires and on natural death of the insured person. I am sulking with the thought on how this policy has been designed. Infact, it’s a shame that the nominees would be “looking” at the whole life component when the insured would be counting days. As a matter of fact, insurance is to cover the unexpected and here LIC is making it certain that your cover will continue and whenever the insured dies the nominees would get the sum. Also, what difference would this money make considering inflation after say 25 years? If I really want to leave something for my kin, I would start an FD or mutual fund or SIP for them. In this case(Jeevan Anand) I am actually slow poisoning my money and not leaving enough behind for my kin.
I checked with my Agent again to surrender this policy (We have paid for 7 years now) but he counters that this is the best policy that he has been selling and that the whole life component is free and that any other endowment policy from LIC would yield the same money after completing the policy tenure without the whole life cover. Not sure what IRDA is doing; these Life Insurance companies and their agents are in fact cheating people mixing insurance with investment. As someone rightly said insurance is an expense and not an investment. Both of these need to be kept separate.
namdev said on March 30th, 2010 at 7:15 pm

Hello

Please send me calculation of bonus @45/1000 S.A 500000 How is 56200
namdev said on March 30th, 2010 at 7:15 pm

Hello

Please send me calculation of bonus @45/1000 S.A 500000 .

Thank you,
Namdev gaikwad
murali said on March 31st, 2010 at 1:38 pm

i need to take loan from lic jeevan anand policy which year is best to get more loan .my term is 18 years only.kindly suggest me.i a paying 30,000 per year as per my age.now i completed 3 years .
vikas said on April 6th, 2010 at 12:03 am

hi tinku, i want to say u that in case you are not there to generate income for family in future then your fd mutual funds etc will give u the fund value alone. whereas insurance will give u a lumpsum aminut ti=o your family.. insurance is what you take for your family and not for you, if u r vrey much bothered about your family then u should havetook a higher sum assured whic wud the inflation rates in future.. remember, j anand is the most unique plan available in the market. Recently i sold this plan to a private insurance company manager of sum assured 22lacs. also our blaster crickter has purchased this plan from lic though he represends someother insurance company on screen. u must be proud that u have took a wise move by takin this policy…[@Tinku
vikas said on April 6th, 2010 at 12:05 am

calculate in this format… sum assured/1000*bonus rate*term of the policy..@namdev
vikas said on April 6th, 2010 at 12:09 am

when it is covered automatically after maturity why do u want to avoid the life cover which is upto age 100.. think again basheer@Basheer
KAMAL SACHDEVA said on April 29th, 2010 at 12:37 am

I have a policy of Jeevan Mitra(Triple Cover Endowment Plan). Sum insured is Rs. 2.5 Lacs and Half Yearly Premium is Rs. 8457/- for 16 Years. I bought this in March 2008

I have another policy name Jeevan samridhi, sum insured Rs. 40,000/- for 20 years. I bought this in year 2003. Yearly Premium of Rs. 3371/-.

Pls. let me should i countinue these policies or switch on to another policy like jeevan saral or jeevan saral. My age is 28yrs.

Pls. suggest me good options.

Regards
Kamal
admin said on May 6th, 2010 at 10:23 am

Hi Kamal,

I would say that you are not covering your risk properly.
You should take term plan appropriate to your risk, a simple thumb rule is you should have sum assured of 10 times your present salary.

Thanks,
Rupeetalk research team
srinu said on June 4th, 2010 at 4:36 pm

i am paying 68000r.s for annual for 13years plan then what is the final amount i will get at the end of maturity

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LIC Jeevan Anand – Review

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