LIC Jeevan Amar: A Comprehensive Term Insurance Plan

Life Insurance Corporation of India (LIC) has been a trusted name in the insurance sector for decades, providing a variety of insurance products tailored to meet the diverse needs of its customers. Among its extensive portfolio, LIC Jeevan Amar stands out as a premier term insurance plan designed to offer substantial life cover at affordable premiums. This essay delves into the details of LIC Jeevan Amar, explores who needs term insurance plans, and examines the different types of term insurance plans available in the market.

Understanding LIC Jeevan Amar

LIC Jeevan Amar is a pure protection term insurance plan, which means it is designed solely to provide life cover. Unlike other insurance plans that combine investment and savings components, Jeevan Amar focuses exclusively on offering a high sum assured in the event of the policyholder’s death during the policy term. This ensures that the financial needs of the policyholder’s family are met, providing them with a secure future.

Key Features of LIC Jeevan Amar:

1. Flexibility in Premium Payment: The policy offers flexibility in premium payment modes. Policyholders can choose from regular premium payments, limited premium payments, or single premium payments, depending on their financial convenience.
2. High Coverage at Affordable Premiums: Jeevan Amar provides substantial life cover at relatively low premiums, making it accessible for a wide range of individuals seeking financial security for their families.
3. Two Benefit Options: The policy offers two death benefit options – Level Sum Assured and Increasing Sum Assured. The Level Sum Assured option provides a fixed amount throughout the policy term, while the Increasing Sum Assured option increases the cover by a specified percentage each year, catering to the rising cost of living.
4. Customizable Coverage with Riders: Policyholders can enhance their coverage by opting for additional riders such as the Accident Benefit Rider, which provides an additional sum assured in case of accidental death.
5. Flexible Policy Term: The policy term ranges from 10 to 40 years, allowing policyholders to choose a duration that aligns with their financial goals and responsibilities.
6. No Maturity Benefits: As a pure term plan, LIC Jeevan Amar does not offer maturity benefits. The policy’s primary purpose is to provide financial protection to the policyholder’s beneficiaries in case of death during the term.

Who Needs Term Insurance Plans?

Term insurance plans like LIC Jeevan Amar are essential for individuals who seek financial security for their dependents in the event of their untimely demise. Term plans suits everyone from the time of getting paid. Here are some categories of people who can benefit from term insurance:

1. Primary Breadwinners: Individuals who are the primary earners in their families need term insurance to ensure that their dependents do not face financial hardships in their absence. The death benefit can cover daily living expenses, education costs, and outstanding loans.
2. Young Professionals: Young professionals who have recently started their careers should consider term insurance to lock in lower premiums. As they progress in their careers and their financial responsibilities increase, having substantial life insurance becomes crucial.
3. Parents: Parents with young children should secure term insurance to ensure their children’s future is protected. The death benefit can be used for the children’s education, marriage, and other significant life events.
4. Homeowners: Individuals with home loans or other significant debts should opt for term insurance. In the event of their death, the death benefit can be used to repay outstanding loans, preventing the family from being burdened with debt.
5. Self-Employed Individuals: Self-employed individuals who do not have the benefit of employer-provided life insurance should secure term insurance to ensure their family’s financial security.

Types of Term Insurance Plans Available

Term insurance plans come in various forms, each designed to cater to different needs and preferences. Here are some common types of term insurance plans available in the market:

1. Level Term Insurance: This is the most basic form of term insurance where the sum assured remains constant throughout the policy term. It provides a fixed death benefit to the beneficiaries if the policyholder passes away during the term.
2. Increasing Term Insurance: In this plan, the sum assured increases by a predetermined percentage every year. This helps counteract inflation and ensures that the beneficiaries receive a substantial amount even if the policyholder dies later in the policy term.
3. Decreasing Term Insurance: This type of plan is usually linked to a debt or mortgage. The sum assured decreases over time, reflecting the reducing liability. It is suitable for individuals looking to cover specific liabilities like home loans.
4. Return of Premium Term Insurance: Unlike traditional term plans, this plan refunds the total premiums paid by the policyholder if they survive the policy term. While the premiums are higher, it offers a savings component along with life cover.
5. Convertible Term Insurance: This plan allows the policyholder to convert their term insurance into a permanent life insurance policy after a specified period. This offers flexibility to adapt to changing insurance needs over time.
6. Group Term Insurance: This type of term insurance is typically offered by employers to their employees as a part of the benefits package. It provides life cover to employees at a lower cost due to the group nature of the plan.
7. Joint Term Insurance: This plan covers two individuals, usually spouses, under a single policy. The death benefit is paid out on the first death, and some policies may offer a second payout on the death of the surviving spouse.

Advantages of LIC Jeevan Amar Term plan

a. Financial Security: The primary advantage of LIC Jeevan Amar is the financial security it provides. In the event of the policyholder’s death, the beneficiaries receive a substantial sum assured that can cover living expenses, debts, and future financial goals.

b. Affordable Premiums: The plan offers high coverage at affordable premiums, making it accessible to a broad range of individuals. This is particularly beneficial for young professionals and those with financial dependents.

c. Flexibility: With various premium payment options and policy terms, Jeevan Amar offers flexibility to policyholders to choose a plan that aligns with their financial situation and goals.

d. Additional Riders: The option to enhance coverage with riders provides an added layer of financial protection, catering to specific risks like accidental death.

e. Tax Benefits: Premiums paid towards LIC Jeevan Amar are eligible for tax deductions under Section 80C of the Income Tax Act, and the death benefit is exempt from tax under Section 10(10D).

LIC Jeevan Amar is a robust term insurance plan that offers substantial life cover at affordable premiums, providing financial security to the policyholder’s dependents in case of untimely death. It is an ideal choice for individuals who want to ensure their family’s financial stability without the complexities of investment-linked insurance plans. By offering flexibility in premium payments, various policy terms, and the option to enhance coverage with riders, Jeevan Amar caters to the diverse needs of policyholders.

Understanding the various types of term insurance plans available in the market helps individuals make informed decisions based on their financial goals and responsibilities. Ultimately, investing in a term insurance plan like LIC Jeevan Amar is a prudent step towards securing a family’s financial future.