LIC Navjeevan Shree Plan 911 benefits, returns, maturity value, death cover, surrender value, loan facility, and tax benefits in detail
Table of Contents
What Is LIC Navjeevan Shree Single Premium Policy?
The LIC fixed deposit plan I’m discussing is the ‘Navjeevan Shri’ (Plan No. 911). It is a single-premium life insurance plan, meaning you pay the premium just once and receive life cover, bonuses, and tax benefits.
This plan is designed for those who want to invest like an FD but desire higher returns. You get better benefits here compared to a standard bank FD specifically the life cover.
Why LIC Navjeevan Shree Is Better Than a Bank FD
Unlike a bank FD, which doesn’t offer life cover, this LIC plan provides substantial life cover. For instance, if you invest ₹1 lakh, you could get a cover of at least ₹1 lakh. I will explain all these details further in the video, so please make sure to watch it in its entirety.
Key Features of LIC Navjeevan Shree Policy
Non-Participating and Non-Linked Nature
LIC Navjeevan Shree plan is a non-participating policy. It is crucial to understand this term; whenever you purchase any policy, grasping these small details is essential.
Meaning of Non-Participating Policy
Non-participating means that regardless of whether LIC Navjeevan Shree makes a profit or a loss, you will receive your returns. You will get exactly what is stated on the bond paper not a reduced amount, but the full return promised, whether LIC incurs a loss or makes a profit.
Meaning of Non-Linked Policy
The “non-linked” aspect. This LIC Navjeevan Shree plan is non-linked, meaning the premium amount you deposit will not be invested by LIC in the share market or stock market. Consequently, your money remains safe and completely secure.
Single Premium Investment and Guaranteed Additions
Single premium means the premium is paid just once.
Guaranteed Bonus of ₹85 per ₹1,000 Sum Assured
This is a single-premium savings endowment plan featuring a guaranteed addition of ₹85 per ₹1,000 of the Sum Assured. Essentially, for every ₹1,000 of the Sum Assured, you receive a guaranteed bonus of ₹85. For instance, if you pay a single premium of ₹1 lakh, you will earn a bonus of ₹8,500 in a year, which will be added to your maturity payout.
Policy Term and Eligibility Criteria
You can invest in this LIC Navjeevan Shree plan for a tenure ranging from a minimum of 5 years to a maximum of 20 years. The longer you invest, the greater the returns and benefits you will receive.
Minimum and Maximum Entry Age
There is also an age limit for investing in this LIC Navjeevan Shree plan; the minimum age requirement is 30 days. You can invest in this LIC plan in the name of your children. The maximum entry age limit is 60 years for Option 1 and 40 years for Option 2.
Policy Options Explained (Option 1 vs Option 2)
It is crucial to understand this aspect: when you read about or purchase this policy, you will have to select one of the two options Option 1 or Option 2. Understanding both options is very important. Let’s look at what they entail. The death benefit that is, what the nominee receives upon the policyholder’s death depends on the option you choose.
Death Benefit Under Option 1
Under Option 1, the payout is either 1.25 times the premium paid or the sum assured (the policy amount), whichever is higher.
Death Benefit Under Option 2 (Recommended)
Under Option 2, the payout is 10 times the premium paid; for instance, if you have paid a premium of ₹1 lakh, your nominee would receive at least ₹1 lakh. Therefore, you should select Option 2 if you decide to purchase the policy. In this video, I will base all further calculations on Option 2, as it offers the greatest benefit.
Minimum and Maximum Investment Amount
You can purchase an LIC Navjeevan Shree FD plan with a minimum investment of ₹1 lakh; there is no upper limit. You can invest amounts like ₹1 lakh, ₹5 lakh, ₹10 lakh, or even more it all depends on your budget, financial goals, and how much you wish to invest.
Surrender and Loan Facility in LIC Navjeevan Shree
You also have the option to surrender the LIC FD plan if the need arises; you can surrender the policy at any time after purchasing it.
Loan Against Policy
Similarly, you can take a loan against the LIC FD plan if required. You can avail of a loan anytime after three months of purchasing the policy. I have detailed the loan amount and the associated calculations later in the video.
Tax Benefits of LIC Navjeevan Shree Policy
LIC Navjeevan Shree FD plan also offers significant tax benefits. The premiums you pay qualify for benefits under Section 80C, and the maturity amount you receive is entirely tax-free under Section 10(10D).
Now, let’s discuss the maturity amount you receive based on the premium paid. I will also explain what the nominee receives in the event of death. Let’s look at the potential surrender value and loan amount.
Example Calculation – ₹1 Lakh Investment
Suppose you are 25 years old and invest in an LIC Navjeevan Shree endowment plan for a term of 20 years. If you opt for a Sum Assured of ₹1 lakh, the total premium payable would be ₹17,000 comprising a base premium of ₹12,400 and ₹4,600 in taxes.
At maturity, you would receive the Sum Assured of ₹1 lakh. Additionally, considering the bonus of ₹85 per ₹1,000 of Sum Assured awarded annually, you would accumulate ₹1,70,000 in bonuses over the 20-year period.
Maturity Amount After 20 Years
Consequently, the total maturity value after 20 years would be ₹2,70,000. You invested approximately ₹1 lakh and are receiving ₹2,70,000 at maturity. However, do not look solely at the financial return; consider the risk cover as well specifically, the 10 times risk cover, which I will explain now.
Death Benefit, Surrender Value, and Loan Illustration
For instance, if the policyholder who took a policy with a Sum Assured of ₹1 lakh and paid a total premium of ₹17,000 passes away at the age of 26, their nominee would receive ₹1,01,400.
If the policy is surrendered at age 26, the payout is ₹81,000, and a loan of approximately ₹400 is available.
If the policyholder passes away at age 30, the nominee receives ₹1,74,000; if the policyholder chooses to surrender at age 30, they receive ₹11,000, or they can avail a loan of ₹72,000.
If the policyholder passes away at age 35, the nominee receives ₹11,16,000; surrendering at age 35 yields ₹1,32,000, while a loan of ₹93,000 is available.
If the policyholder passes away at age 40, the nominee receives approximately ₹11,600; surrendering at age 40 yields ₹1,64,000, and a loan of ₹1,15,000 is available.
If the policyholder passes away at age 44, the nominee receives approximately ₹11,94,000; surrendering at age 44 yields a value of ₹9,000, and a loan of approximately ₹1,46,000 is available.
₹2 Lakh Investment – Maturity, Death & Surrender Details
Now, regarding a policy with a sum assured of ₹2 lakh: the premium payable is ₹2,05,000, comprising a base premium of ₹1,96,000 and tax of ₹8,800.
Including all bonuses, the total maturity payout amounts to ₹5,400.
The total premium deposited is approximately ₹2 lakh. Beyond this, you must also consider the risk cover provided. In other words, if the policyholder passes away before maturity, what will the nominee receive? This feature is not available with standard Fixed Deposits (FDs) whether at a post office or a bank.
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