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Best LIC Policies For Tax Saving Under Section 80C

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Tax saving is considered as one of the most common motive behind investments. But which is the best investment option? Where should you invest to get tax exemption? There are numerous investments options which can help you save tax. However, in this post, we will solely concentrate on the life insurance policies which are one of the best investment options for tax saving. Read on to find out best LIC policies for tax saving under Section 80C.

Best LIC Policies For Tax Saving Under Section 80C

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Best LIC Policies For Tax Saving Under Section 80C

Here are the 5 best LIC policies for tax saving under Section 80C:

1. LIC New Jeevan Anand Plan

LIC New Jeevan Anand Plan is a participating non-linked plan that offers protection as well as savings. Under this plan, if the policyholder survives till the end of policy term, then the Sum Assured is paid. If the policyholder dies during the policy term, then the amount is paid to the nominee.

Features

  • The Minimum Basic Sum Assured is Rs. 100,000.
  • There is no limit on Maximum Basic Sum Assured. (The Basic Sum Assured shall be in multiples of Rs. 5000/-)
  • The Minimum Age at entry is 18 years while the Maximum Age at entry is 50 years.
  • The Minimum Policy Term is 15 years while the Maximum Policy Term is 35 years.
  • Maximum Maturity Age is 75 years.
  • Premiums can be paid at yearly, half-yearly, quarterly or monthly intervals (through ECS only or through salary deductions).
  • A grace period of one calendar month (not less than 30 days) for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums.
  • Loan can be availed under the policy.
  • Accidental death and disability benefits rider are also available in this plan as optional benefit.
  • Rebate offered is offered if the policyholder opts for high sum assured.
  • The premium paid is tax exempt under Section 80C.

Benefits

Death Benefits

If the policyholder dies during the policy term, the Sum Assured on Death and vested Simple Reversionary Bonuses and Final Additional bonus will be paid to the nominee. The ‘Sum Assured on Death’ is:

  • Higher of 125% of Basic Sum Assured or
  • 10 times of annualised premium and
  • Not less than 105% of all the premiums paid as on date of death

Maturity Benefit

If the policyholder survives till the end of the policy term, the Basic Sum Assured, along with vested Simple Reversionary Bonuses and Final Additional Bonus (if any) will be paid.

Bonus

Simple Reversionary Bonuses and Final Additional Bonus (if any) will be paid along with Basic Sum Assured.

LIC New Jeevan Anand Plan

2. LIC New Children’s Money Back Plan

The LIC New Children’s Money Back Plan is a non-linked, with-profit regular premium payment plan which has been designed to meet educational, marriage and other needs of the children. This policy offers risk cover to the insured child during the policy term.

Features

  • The Minimum Basic Sum Assured is Rs. 1,00,000
  • There is no limit on the Maximum Basic Sum Assured. (Basic Sum Assured shall be in multiples of Rs. 10,000/-).
  • The Minimum Age at entry is 0 years while Maximum entry age is 12 years.
  • The Maturity Age is 25 years.
  • Policy term can be calculated by subtracting the age at entry by 25. If the age of the child is 8 at the time of entry, then the policy term will be 25-8= 17 years.
  • Premiums can be paid at yearly, half-yearly, quarterly or monthly intervals (through ECS only or through SSS mode).
  • A grace period of one month (not less than 30 days) for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums.
  • Loan facility can be availed under this policy after payment of premiums for at least 3 full years.
  • The policy can be surrendered at any time during the policy term, if the policy premium has been paid for full 3 years.
  • The premium paid for this plan is tax Exempt under section 80C.
  • This plan can be purchased by any of the parent or grand parent for a child aged 0 to 12 years.

Benefits

Death Benefit:

i) On death of the life assured before the commencement of risk, the premium (excluding taxes), extra premium and rider premium (if any) will be paid.

ii) On death after the date of commencement of risk, Death benefit amount which is, sum of Sum Assured on Death and vested Simple Reversionary Bonuses and Final Additional Bonus (if any) will be paid. Sum Assured on Death is

  • Higher of 10 times of annualized premium or
  • Absolute amount Assured to be paid on Death i.e. Basic Sum Assured.
  • The death benefit shall not be less than 105% of the total premiums paid as on date of death.

Survival Benefit:

If the life insure survives the policy and completes the age of 18 years, 20 years and 22 years, then  20% of the Sum Assured is paid on each occasion.

  • At 18 years of age = 20% of Sum Assured
  • For 20 years of age = 20% of Sum Assured
  • At 22 years of age= 20% of Sum Assured
  • After completion of 25 years of age= 40% of Sum Assured + Accrued Bonus+ Final Additional Bonus (if any) will be paid.

Maturity Benefit:

If the Life assured survives the stipulated date of maturity, then, Sum Assured on Maturity (which is 40% of the Basic Sum Assured) along with vested Simple Reversionary Bonuses and Final Additional Bonus (if any) will be paid.

Optional Benefit:

  1. Option to defer Survival Benefit is available
  2. Premium Waiver Benefit Rider is available.

3. LIC Jeevan Labh

The LIC Jeevan Labh is a limited premium paying, non-linked, with-profits endowment plan that offers savings as well as protection. It provides lump sum amount at the time of maturity for the surviving policyholder and financial support to the family in case of unfortunate death of the policyholder.

Features

  • The Minimum Basic Sum Assured is Rs. 2,00,000
  • There is no limit on the Maximum Basic Sum Assured. (Basic Sum Assured shall be in multiples of Rs. 10,000/-).
  • The Minimum Age at entry is 8 years.
  • Maximum entry age is 59 years for 16 years policy term, 54 years for 21 years policy term and 50 years for 25 years policy term.
  • The Maximum Maturity Age is 75 years.
  • Policy term is 16, 21 and 25 years for 10, 15 and 16 years premium paying term respectively.
  • Premiums can be paid at yearly, half-yearly, quarterly or monthly intervals (through ECS only or through SSS mode).
  • A grace period of one month (not less than 30 days) for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums.
  • Loan facility can be availed under this policy.
  • The policy can be surrendered at any time during the policy term, if the policy premium has been paid for full 3 years.
  • The premium paid for this plan is tax Exempt under section 80C.

Benefits

Death Benefit

If the policyholder does not survive till the end of the policy term, then Sum assured on Death, vested Simple Reversionary Bonuses and Final Additional bonus (if any) will be paid. Sum Assured on Death:

  • Higher of 10 times of annualised premium or Absolute amount assured
  • Not less than 105% of all the premiums paid as on date of death

Maturity Benefit

If the policyholder survives till the end of the policy term, then Sum Assured on Maturity, vested Simple Reversionary bonuses and Final Additional bonus (if any) will be paid in lump sum.

Optional Benefit

Two optional riders can be availed:

  1. LIC’s Accidental Death and Disability Benefit Rider
  2. LIC’s New Term Assurance Rider

4. LIC Jeevan Lakshya Plan

The LIC Jeevan Lakshya is a participating non-linked plan that offers protection ans well as savings. It offers Annual Income benefit that helps fulfill the needs of the family.

Features

  • The Minimum Basic Sum Assured is Rs. 1,00,000.
  • There is no limit on Maximum Basic Sum Assured. (The Basic Sum Assured shall be in multiples of Rs. 10,000/-)
  • The Minimum Age at entry is 18 years while the Maximum Age at entry is 50 years.
  • The policy term is 13 to 25 years while premium paying term is (Policy Term – 3) years.
  • Maximum Maturity Age is 60 years.
  • Premiums can be paid at yearly, half-yearly, quarterly or monthly intervals (through ECS only or through salary deductions).
  • A grace period of one calendar month (not less than 30 days) for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums.
  • Loan can be availed under the policy.
  • The premium paid is tax exempt under Section 80C.

Benefits

Death Benefit:

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If the policyholder dies during the policy term, Sum Assured along with vested Simple Reversionary Bonuses and Final Additional Bonus (if any) will be paid.  The Death benefit shall not be less than 105% of all the premiums paid as on date of death. Sum Assured on Death will be sum of:

  • Annual Income Benefit equal to 10% of the Basic Sum Assured
  • Assured Absolute Amount equal to 110% of Basic Sum Assured

Maturity Benefit: 

If the policyholder survives the date of maturity, then, Sum Assured on Maturity ( which is equal to Basic Sum Assured) along with vested Simple Reversionary Bonuses and Final Additional Bonus (if any) will be paid.

Optional Benefit: 

Two optional riders can be availed:

  1.  LIC’s Accidental Death and Disability Benefit Rider
  2. LIC’s New Term Assurance Rider

LIC Jeevan Lakshya

5. LIC Bima Diamond

LIC’s Bima Diamond is a non-linked, with-profit, limited premium payment money back plan. It offers financial support for the family during the policy term as well as beyond the policy term. It provides insurance cover of full sum assured during the policy term and half the sum assured beyond the policy term during the extended cover period. This plan also offers Auto Cover and loan facility. It is a close ended plan and will be available for sale up to 31st August, 2017.

Features

  • The Minimum Basic Sum Assured is Rs. 1,00,000.
  • Maximum Basic Sum Assured is Rs. 5,00,000. (The Basic Sum Assured shall be in multiples of Rs. 20,000/-)
  • The Minimum Age at entry is 14 years while the Maximum Age at entry is 50 years for 16 years policy term, 45 years for 20 years policy term and 41 years for 24 years policy term.
  • The policy term are 16, 20 and 24 years while premium paying term are 10, 12 and 15 years respectively.
  • Maximum Maturity Age is 66 years for 16 years policy term and 65 years for 20 and 24 years policy term.
  • Premiums can be paid at yearly, half-yearly, quarterly or monthly intervals (through ECS only or through salary deductions).
  • A grace period of one calendar month (not less than 30 days) for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums.
  • The premium paid is tax exempt under Section 80C.
  • Extended Cover Period (after elapsation of policy term) with policy term of 2 years  is available.

Benefits

Death Benefit:

i) If the policyholder dies:

a) Before the date of maturity: Sum Assured on Death will be paid during first five years.

b) After completion of five policy years but before the date of maturity: Sum Assured on Death and Loyalty Addition (if any) will be paid.

ii) If the policyholder dies during the Extended Cover Period: An amount equal to 50% of Basic Sum Assured will be paid.

Survival Benefit:

If the policyholder survives till the end of each of the specified durations during the policy term, then a fixed percentage of Basic Sum Assured will be paid.

Fixed percentage for various policy terms are:

  1. For policy term 16 years: 15% of Basic Sum Assured at the end of each of 4th, 8th and 12th policy year.
  2. For policy term 20 years: 15% of Basic Sum Assured at the end of each of 4th, 8th, 12th and 16th policy year.
  3. For policy term 24 years: 12% of Basic Sum Assured at the end of each of 4th, 8th, 12th, 16th and 20th policy year.

Maturity Benefit:

On the life assured surviving to the end of the policy term, ‘Sum Assured on Maturity’ along with Loyalty Addition, if any, will be paid.

Loyalty Addition:

The Loyalty Addition, (if any), will be paid on death after completion of 5th policy year but within the policy term or on maturity. The rate and terms will be decided by the Corporation.

Optional Benefit:

Two rider benefits are available:

  1. LIC’s Accidental Death and Disability Benefit Rider
  2. LIC’s New Term Assurance Rider

LIC Bima Diamond Plan

Also Read: Tax Benefits On Life Insurance Policies Under Section 80C

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