LIC policy: Get guaranteed return of Rs 1 lakh to Rs 5.4 lakh, pay just Rs 341 to Rs 5,118 premium in Jeevan Aadhaar plan; tax benefit available too

The Life Insurance Corporation of India (LIC) has a host of policies that can be affordable to anyone and still provide guaranteed returns on maturity. One such LIC policy is Jeevan Aadhaar plan offered to everyone. Among major key highlights of this plan is that, premium begins at cheap Rs 341 a month, with guaranteed return starting from Rs 1 lakh. The higher your premium amount will be, the higher your returns are. This plan provides annuity benefit, with partial withdrawal on maturity. But it would be massive tax benefits which make Jeevan Aadhaar plan even better and attractive. Between Rs 75,000 to Rs 1,25,000 tax benefits can also be availed under this plan, depending upon the category of policyholders.

What is the LIC Jeevan Aadhar Policy?

According to LIC, this policy may be offered to a person who has a handicapped dependant satisfying conditions as specified in Section 80DDA of Income Tax Act, 1961. The plan provides life insurance cover throughout the lifetime of the purchaser. The benefits under the plan are for the handicapped dependant, which is partly in lump sum and partly in the form of an annuity.

Premiums paid under this plan are eligible for Income Tax relief under Section 80DDA of Income Tax Act. Notably, premiums are paid yearly, half-yearly, quarterly, monthly or through Salary deductions, as opted by you, within the selected premium paying terms of 10, 15, 20, 25, 30 or 35 years or till the earlier death. Alternatively, the premiums may be paid in one lump sum.

Also, the policy provides for the Guaranteed Additions at the rate of Rs.100 per thousand Sum Assured for each completed policy year. The Guaranteed Additions will accrue up to age 65 of the life assured or till his/her death, if earlier.

Further on the death of  the Life Assured, Sum Assured together with the Guaranteed Additions and terminal additions, if any, become payable. 20% of such benefit amount shall be paid in lump sum and the balance amount shall be utilized to provide an annuity of 15 years certain and for life thereafter on the life of the handicapped dependant. The annuity rates are guaranteed for this purpose. 

If the handicapped dependant predeceases the Life Assured during the premium paying term of the policy, the contract ceases and the Life Assured will have the option of either keeping the policy for a reduced paid-up Sum Assured or receive the refund of premiums. 

Here’s how benefits are offered under this plan. 

(Image source: LIC)

The minimum premium would be Rs 4,095 in a year, which gives a guaranteed return of Rs 1 lakh. While, the maximum would be Rs 61425 premium paid in a year having guaranteed return ranging from Rs 2.40 lakh to Rs 5.40 lakh. 

Key highlight is that,  20% of the amount shall be paid in lump sum and the balance of 80% shall be utilised to pay an annuity on the life of handicapped dependant. If we break down the premium installments, then an individual will have to pay minimum Rs 341.25 to Rs 5,118.75 every month. 

For example - if the life assured dies during 15th year, then Rs 48,000/- will be paid in a lump sum and Rs 17,530/- will be paid as yearly annuity for 15 years certain and thereafter so long the handicapped dependant survives. 

Tax benefits! 

LIC on its website reveals that, under section 80DD tax of Income Tax Act, deductions are allowed under this policy. 

The deduction can be summed up in two patterns. For instance, Rs 75,000 tax deduction can be availed in a financial year starting from 2015-16, where disability is more than 40% but less than 80%. As for, over 80% disability an individual can claim upto Rs 1.25 lakh deductions in a financial year under this section. 

Further, the section 80DDA allows deduction of an amount not exceeding Rs 20,000 paid or deposited by him in the previous year out of his income chargeable to tax.

While tax benefits under section 80DDA of IT is eligible for following conditions: 

Payment of annuity or lump sum amount for the benefit of a handi­capped dependant in the event of the death of the individual or the member of the Hindu undivided family in whose name subscrip­tion to the scheme has been made.

Also, if the assessee nominates either the handicapped dependant or any other person or a trust to receive the payment on his behalf, for the benefit of the handicapped dependant.