Is LIC’s Jeevan Amar Term Insurance Worth It?
Life Insurance Corporation of India (LIC) recently launched an affordable offline term life insurance policy called Jeevan Amar. We discuss the features of this policy and whether it is worth purchasing.
 
LIC, which is better known for its traditional insurance policies that are sold as investments, also offers pure term plans. LIC’s Anmol Jeevan-II and e-Term are two such term...
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  • Review: Max Life Smart Term Plan
    Max Life Insurance recently announced a smart term plan which offers enhanced life cover, return of premiums, longer coverage option and useful add-on riders. 
     
    Term plans are pure insurance products which provide a lump-sum amount, i.e., death benefit sum assured (SA), on the insured’s demise during the policy term. There is no maturity benefit if the insured survives the policy...
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  • Jeevan Saral: LIC Wants to Know How Many Policies Are Flawed. Asks Officers to Finish the Task Before 31st July
    Following a public interest litigation (PIL) filed by Moneylife Foundation in the Supreme Court, the Life Insurance Corporation of India (LIC) has undertaken, on a war footing, a verification drive for correcting "printing" mistakes in maturity sum assured (MSA) under its Jeevan Saral policy. An internal circular (CO/CRM/PS/2019-20/153) issued on 9 July 2019 (a copy of which is with Moneylife) by executive director of customer relationship management (CRM) for payments asks officers to complete the task before 31 July 2019 with daily reporting.
     
    LIC says in the circular that its software development centre (SDC) has devised a program to identity Jeevan Saral policy bonds wherever printing mistake had occurred in matured sum assured-MSA. "The program has been designed to extract all Jeevan Saral policies of the division, with status 21 (in force) and 31 (reduced paid up) where MSA is less than death sum assured (DSA). The initial step is to run extraction option. This one time job is to be done immediately, after office hours," the circular says.
     
     
    It also contains step-by-step instructions for officials of LIC to carry out desired changes in the Jeevan Saral policies. This program allows the officer to check and make correction in cases where MSA is not printed or incorrect, where enterprise document management system (EDMS) image (of the policy) is not available and where MSA and DSA are interchanged.
     
     
    The manager for CRM at divisional level is asked to submit daily report to regional manager (CRM) on number of policies left for checking and options submission. "This task has to be completed before 31 July 2019. Progress of the task is to be monitored on a daily basis," the circular says.
     
    One may wonder why all of a sudden LIC want to verify and correct the "printing" mistake in Jeevan Saral policies now. There are two reasons. One was the PIL filed by Moneylife Foundation in the Supreme Court against LIC on Jeevan Saral issue. And last and most important a September 2014 judgement from the Insurance Ombudsman, Hyderabad. 
     
    Hyderabad ombudsman's order procured under right to information (RTI) Act reveals that during the hearing, representative of LIC stated that non-specifying of the correct maturity benefit was a typographical mistake that occurred during the printing of the policy document. 
     
    "...there is nothing on record to show that during the entire policy term of 10 years, the insurer had made any effort to bring the so-called typographical error to the notice of the insured; leave alone making an effort to correct the same. As a result the insured was allowed to continue with the belief that the maturity value would be Rs1 lakh. This being the case, the insurer cannot, at this stage of claim of maturity value, make lower payment by invoking the theory of typographical error committed 10 years back...Having held out a promise that a particular amount would be paid on maturity and having allowed the policyholder to live with that belief for 10 long years, the insurer has no option but to honour the contractual obligation," the order said.
     
    The ombudsman ordered LIC to pay Rs1 lakh to the insured. 
     
     
    LIC, however, decided to challenge the order before the Karnataka High Court. The HC too on 15 December 2015 rejected the petition filed by LIC. It said, "...this Court feel that the order passed by the LIC Ombudsman appears to be just and proper under the facts and circumstances of the case. Therefore the question of quashing the same in this writ petition does not arise. Accordingly the same is dismissed imposing cost of Rs10,000 payable by the petitioner LIC corporation to the respondent member for having unnecessarily driven him to a litigation before the LIC Ombudsman at first place and thereafter in forcing him to participate in this proceedings which is initiated by LIC."
     
    As highlighted by Moneylife, LIC's Jeevan Saral, which used to be a hot-selling insurance product for agents, until it was withdrawn, is a controversial product. In fact, Jeevan Saral was a traditional product that could make your premium (money paid) disappear! This can happen in many policies during surrender or making it ‘paid-up’, but, in the case of Jeevan Saral, it has happened even at policy maturity. 
     
    A senior citizen couple got just one-third of the premiums paid over the years. 
     
    The Jeevan Saral product, which has gobbled up hard-earned savings of policyholders (especially senior citizens) have also agitated LIC agents and their association. Despite innumerable letters, protests and objections, LIC has not budged so far.
     
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    COMMENTS

    NOOR E BASHEER

    3 weeks ago

    Dear Sir,

    I have two jeevan saral policies around paid 8 premiums.

    When i approached lic to Surrender i was told that one premium shall be deducted.
    whilst, i see in your below website there is no deduction.

    https://www.investobite.com/surrender-value-calculator/lic-jeevan-saral-plan-165.html

    please assist.

    REPLY

    Rajnish Bahuguna

    In Reply to NOOR E BASHEER 3 weeks ago

    Dear Noor Basheer,

    If you surrender any time before 10 years, the surrender value will be almost 1 premium less than you paid & without any Loyalty Additions (bonus). While surrendering after 10 years would fetch you both the Maturity Sum Assured & Loyalty Additions. That website gives you the idea of amount receivable if you surrender after 10 years & includes Loyalty Additions also. Moreover, the website calculator will not be able to provide you exact figure in case your actual policy term (duration) taken was longer & you are surrendering earlier at 10 years or beyond. My piece of advice, if you need the funds, either surrender or take loan. If you don't need any funds, continue the policy till your requirement comes up. This policy is good for younger people who have taken a longer term (duration) policy & are paying premium above 20 K (& best above 50K) per year.

    Rajnish Bahuguna

    In Reply to Rajnish Bahuguna 3 weeks ago

    Minor correction. Where I said "That website gives you the idea of amount receivable if you surrender after 10 years & includes Loyalty Additions also" Plz read this as follows "That website gives you the idea of amount receivable if your policy matures after 10 years or beyond & includes Loyalty Additions also."

    Rajnish Bahuguna

    4 weeks ago

    Why my replies to Mr Shashank Johari & Mr Ganesh Babu sent about 10 days back not showing up?

    REPLY

    MDT

    In Reply to Rajnish Bahuguna 4 weeks ago

    We request all readers never to share personal info in any public forum, which can be seen & perhaps misused. Such comments, which share personal details and seek advice from public gets disabled as per the website policy.

    Rajnish Bahuguna

    In Reply to MDT 4 weeks ago

    Well as far as I remember, I never asked for any personal information (especially any policy number, the most critical one). I simply asked for Death Benefit SA, Original Term, Age At Entry/DOB, Date of Commencement & after how much time the person wants to surrender. This is very much required to answer the other person's queries specifically & guide him / her properly as the calculator that you have been using has its own flaws. This is a better way to advising someone rather than simply asking him / her to just surrender the policy or go to court without even knowing what he / she was told at the time of sale (like assuming all 5 crore people were mis-sold because not a single policy was sold fairly & squarely) & what exactly he / she wants now.

    Shashank Johari

    1 month ago

    I am also paying 56k approx /year from 9year for jeevan saral , what should I do now.... Need suggestion

    REPLY

    Aditya Joby

    In Reply to Shashank Johari 1 month ago

    Hi!

    Thanks for your comment. I am a part of Moneylife, and hope I can resolve your issue regarding the Jeevan Saral Policy you have. Here is the link to a maturity calculator, created by an independent agency (so all your doubts are alleviated).

    https://www.investobite.com/maturity-calculator/lic-jeevan-saral-plan-165.html

    If you still believe that you have been cheated, please send us a mail at [email protected], with the subject:"Attn: Yogesh/Aditya Jeevan Saral".

    Aditya Joby

    In Reply to Shashank Johari 1 month ago

    Hi!

    Thanks for your comment. I am a part of Moneylife, and hope I can resolve your issue regarding the Jeevan Saral Policy you have. Here is the link to a maturity calculator, created by an independent agency (so all your doubts are alleviated).

    https://www.investobite.com/maturity-calculator/lic-jeevan-saral-plan-165.html

    If you still believe that you have been cheated, please send us a mail at [email protected], with the subject:"Attn: Yogesh/Aditya Jeevan Saral".

    A Learner

    1 month ago

    Now LIC will call all jeevan saral policy holders to come with their original bond. & Will issue them new bond & hold their original bond. Then no policy holder complain to consumer court for masscheating.

    Ganesh Babu

    1 month ago

    I have jeevan saral policy.. last 6 years i am paying my premium .. Quarterly 15K.. Please let me know should i surrender the policy or can i continue?

    REPLY

    Aditya Joby

    In Reply to Ganesh Babu 1 month ago

    Hi!

    Thanks for your comment. I am a part of Moneylife, and hope I can resolve your issue regarding the Jeevan Saral Policy you have. Here is the link to a maturity calculator, created by an independent agency (so all your doubts are alleviated).

    https://www.investobite.com/maturity-calculator/lic-jeevan-saral-plan-165.html

    If you still believe that you have been cheated, please send us a mail at [email protected], with the subject:"Attn: Yogesh/Aditya Jeevan Saral".

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