“As you sow, so shall you reap”: LIC’s New Jeevan Nidhi

“If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance.”
― Suze Orman

Life insurance is one of those investments that almost everyone includes in their budget. Buying one is as crucial as caring for your PF account is. And it is a win-win situation for all. The money isn’t lost. It comes back with interest at the time of maturity. Like when you purchase a mobile phone connection, the insurance policy comes with various schemes. The combinations are many. We can pick what we like the best. What we think will suit our needs the most.

The idea is to plan ahead and to be secure. We need to protect our family and Insurance is the key to it.

There have been a variety of schemes that have been introduced by LIC in order to cater to the different requirements of the public and to suit their plans, the latest being the New Jeevan Nidhi.

What is it and what benefits does it offer?

It is a traditional plan with deferred annuity and comes with bonus. It includes a savings phase in which money is invested in the account and the income phase where payment is made.

Whenever we invest we always tend to look at what we would get at the end of the term. In LIC’s New Jeevan Nidhi, what we receive includes Sum assured; Accumulated guaranteed additions, terminal bonus and the simple revisionary bonus.

The policy is basically a very conventional pension plan. It provides for cover during deferment period and includes annuity on insurer’s survival. The scheme is very convenient as it provides both insurance and investment under single plan. We do have the option of withdrawing money out of the annuity. Pension is receivable from the rest of the amount.

Another financial benefit is that New Jeevan Nidhi 818 includes guaranteed inclusion of Rs.50 for the first five years

Tax Benefits from it

Now that we have seen the financial benefit of the scheme, the next thought would be, “What kind of tax benefit can we avail?” A very attractive rebate of 2% and 5% is available depending on the scheme that we opt for. Not only that, but the premiums will also be exempt under Section 80C.

What to watch out for?

We must watch out for a few things though. The policy is likely to lapse if the premiums are not paid within the grace time. Thankfully, if we do forget, it can be revived with the payment of all premium arrears along with interest. So all is not lost indeed.

Concluding Thoughts

End of the day, it is a very reassuring feeling when we know we have found a good scheme and that the money is safe. In this day and age, when there are no guarantees for the future, the Jeevan Nidhi plan is definitely a feel good pension plan. With prudent saving, frequent trips can be made. Nobody plans to work forever. The nest egg is always something that needs to be planned in such a way that the future does not look scary.