LIC Jeevan Vriddhi – Guaranteed returns to compete with bank fixed deposits

Jeevan Vriddhi is designed to attract money from the tax-savers who are desperately seeking avenues to park up to Rs1 lakh. While there are other similar plans in the market, it is LIC’s product that will command attention because of its muscle power

Life Insurance Corporation of India (LIC) has launched Jeevan Vriddhi, a single premium traditional plan offering guaranteed maturity sum assured (SA) along with loyalty addition (if any) after completion of policy term which is 10 years. The guaranteed maturity SA will depend on the age of policyholder from eight to 50 years; it reduces with age.

The insurance component is fixed at five times the premium excluding extra premium (based on one’s health) and service tax. In short, the plans works like bank fixed deposits along with insurance thrown in to make it an insurance product. For younger persons, it would almost double your money in 10 years. With interest rates at its peak today, LIC is willing to offer good returns, but it is for the exact same reason the plan is available only for a maximum of 120 days.

The minimum premium is Rs30,000, for an SA of Rs150,000. If the policyholder dies during the term, the nominee will get Rs150,000. If the policyholder survives till maturity, the guaranteed benefit will depend on the policyholder’s age at the time of taking the policy.

For example, if the policyholder would have paid single premium of Rs30,000 (excluding service tax), for a child of eight the maturity amount will be Rs59,538. If the person is aged 35, the maturity amount will be Rs57,385. The return on investment (excluding mortality charges) will be approximately 7% p.a. in this case. If someone is 50 at the time of entry, the plan will give Rs47,467 after 10 years.

Advantages of Jeevan Vriddhi

  •  Rate of return – For a 10 year policy term LIC’s endowment plan gives about 5% return on investment (excluding mortality charges). Jeevan Vriddhi plan will give approximately 7% (age 35 years) and hence a good option.
  •  Loan – The product offers loan after completion of one policy year, which will be 70% of the surrender value. Unfortunately, the rate of interest will be 10.25% p.a. instead of 9% p.a., which LIC is offering for most of the other plans.
  •  Surrender value – The guaranteed surrender value will be available after completion of one policy year; it will be 90% of single premium excluding any extra premium. LIC may pay special surrender value which will be discounted value of the guaranteed maturity SA as on the date of surrender.
  •  Loyalty addition – Depending upon the company experience the policy may pay loyalty addition. This is non-guaranteed and considering the decent guaranteed returns offered by the plan, it will be prudent to not have high expectations of the loyalty addition.
  •  Rebates for higher single premium – For single premium of Rs50,000 to Rs99,000, the increase in guaranteed maturity SA will be 1.25%; premium of Rs1 lakh and above, the increase will be 3%.

Disadvantages of Jeevan Vriddhi

  •  While the plan will offer surrender value after one year, the special surrender value is not guaranteed to be paid. The guaranteed surrender value will be much less than what a person can get from premature withdrawal of bank fixed deposits.
  •  The policy term is fixed and so is SA. This is not a product for someone looking for high insurance cover or longer policy term.
  •  The death benefit is five times the premium excluding extra premium that may be payable if the person is not in good health. This could lead to issues with tax exemption. The product is better suited for those who are considered as ‘standard’ health.




5 years ago

i have taken jeevan virdhi policy for 1 lkah, how much claim i can take from this policy

chandan mondal

5 years ago

last date of jivan vridhi plan?

chandra kumar khemchandani

5 years ago

lic jeevan virdhi

Jerry Jose

5 years ago

LIC Jeevan Vriddhi policy is good so that it offer 5 times sum assured for all age group from 8 years to 50 years, even if the policy term is only for 10 years. But the guaranteed sum assured is very less when the inured is elder. So we cannot claim that it is similar to Fixed deposit. For insurance view point it is almost ok



In Reply to Jerry Jose 5 years ago

ur understanding is wrong - read below

1. Benefits

i) Death benefit: On death, Basic Sum Assured shall be payable. The Basic Sum Assured shall be 5 times the Single Premium excluding extra premium, if any.

ii) Maturity Benefit: On maturity, the Guaranteed Maturity Sum Assured along with Loyalty Addition, if any, shall be payable.

iii) Loyalty Addition: Depending upon the Corporation´┐Żs experience the policy will be eligible for Loyalty Addition on date of maturity at such rate and on such terms as may be declared by the Corporation.


In Reply to Jerry Jose 5 years ago

guaranteed returns is less for elders because of high mortality charges. The remaining investment portion will give similar returns for all ages and hence it acts like fixed deposits + insurance component

SBI EDGE Fund: Investing on the edge

More and more hybrid schemes are coming out to lure investors. However, these schemes could do more harm than good to the investors

SBI Mutual Fund plans to launch an open ended hybrid fund-SBI EDGE Fund-according to an offer document filed with the Securities and Exchange Board of India (SEBI). The fund will invest in equity, debt and gold ETFs (exchange traded funds)-perhaps the same reason why the fund house has named it EDGE. The fund would invest 10%-60% of its assets in equity and equity-related instruments, a similar allocation would be made towards gold ETFs and 10%-80% in debt and money market instruments. The investment objective of the scheme is to generate growth and regular income, however, with a major portion kept to be invested in gold makes the fund a highly risky investment. The performance of the scheme would be benchmarked against equal weightage of the BSE 100 index, Crisil Composite Bond Fund Index and the price of gold.

With no attraction towards equity, and known the affinity of Indians towards gold, fund houses have started using gold as an asset to attract investors. They are launching gold ETFs and hybrid funds that invest in gold along with debt and equity or a gold savings fund which is a mutual fund which invests in gold ETFs. Axis MF, Kotak MF and Religare MF have all three products and now SBI is following suit.

SBI would be investing as much as 60% in gold, which is too high an allocation to a highly speculative product such as gold. Rajeev Radhakrishnan would be the fund manager. He has a number of funds under his belt-Magnum Insta Cash Fund, SBI Premier Liquid Fund, Magnum Children Benefit Plan, Magnum Income Plus Fund-Saving Plan, SBI Capital Protection Oriented Fund-Series I, Series II & Series III, SBI Short Horizon Debt Fund and the existing Debt Fund Series.

Apart from the risk in gold, investors would be left to the dilemma as to how much to invest in such a fund. With huge variance in asset allocation, how much should an investor invest if he is planning for a particular goal? How much returns is the scheme expected to generate? Fund houses need to come out with schemes that would benefit investors by fitting into a financial plan and not leaving them more confused.

Min Investment:
Additional Investment: Rs1,000
SIP: Minimum amount Rs6,000

Exit Load -

  • For exit within one year from the date of allotment -1%
  •  For exit after one year from the date of allotment - Nil



a hussain

5 years ago

i want get information of I/Tax saving investment funds, betterly the mutual funds having tax benifits. also inform me yearly investment schemes having satisfactory return. and also the expectation in investment in gold funds.



In Reply to a hussain 5 years ago

attend moneylife foundation seminars

RBI permits correspondents to conduct business for other banks too

The central bank said any business correspondent authorised by a bank would now be able to offer services like cash transactions to customers of other banks if the lender doesn’t have a branch of the same bank

Mumbai: In a bid to step up financial inclusion, the Reserve Bank of India (RBI) has permitted all business correspondents (BCs) or representative of any one particular bank to conduct business for other banks as well, reports PTI.

The RBI has allowed ‘interoperability’ system at the retail outlets which is the point of customer interface, RBI said in a circular.

Business correspondents are bank representatives who, besides helping rural people to open bank accounts, also facilitate in banking transactions.

The central bank said any business correspondent authorised by a bank would now be able to offer services like cash transactions to customers of other banks if the lender doesn’t have a branch of the same bank.

“Such customer services will have to be a part of the core banking solution (CBS) network of the lenders,” the RBI said, adding it should follow the standard operating procedures which are to be advised by the Indian Banks' Association (IBA).

“The business correspondents or its retail outlet or sub-agent at the point of customer interface would continue to represent the bank, which has appointed them,” it added.

The development would also help government to provide cash subsidy directly to the beneficiary, according to the experts.

The direct transfer of subsidy will help plug any pilferages during government’s money transfers.

The RBI said banks were also advised to strictly adhere to norms on managing risks and code of conduct during outsourcing of financial services, adding banks will be fully responsible for the actions of the business correspondents or sub agents.

Earlier, the RBI has permitted a business correspondent to work in more than one bank but they could provide banking services of only one bank which employed the BC.


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