Utsav – Just My Kind of Plan

After going through the salient features of LIC’s new plan Jeevan Utsav, a famous quote by EY Young flashed across my mind “Somewhere over the rainbow, skies are blue, and the dreams that you dare to dream really do come true”! Yes, indeed LIC’s new plan Jeevan Utsav is a ‘Rainbow Plan’ for the customers with a variety of colourful features that sync with the needs of different segments. Some may call it as ‘Plan for Everyone’, some may term it as ‘Guaranteed with Flexi Benefits Plan’ while some may describe it as ‘Plan for Every Age’. Thus, Utsav has captured the imagination of everyone as it offers coverage for lifetime with multiple benefits throughout the term. The rainbow of features makes it attractive and let us analyse the high points of the plan here.

Wide Range of Age

The young parents of today look forward to a bright future for their children keeping in mind a sound financial planning. This aspect will secure a financial future as they grow up. A proper instrument will help them to stay financially prepared for the expenses towards their children and ensure that they have adequate resources to pursue their dreams. In this regard, Jeevan Utsav is ideal as the plan can be offered even to a toddler of 90 days old! The goal for a child can be drawn according to their dreams and the variety of benefits that the plan offers can be linked accordingly.

Guaranteed Return

In the era of ever decreasing bank rates, a guaranteed income option is something a rarity and Utsav is here to offer this, that too, life-long! With the ever increasing inflation, it is important to stay prepared to beat the inflation and manage the future expenses with a prudent financial planning. Investing in the right plan can help one to mitigate inflation to a greater extent and continue to stay financially prepared, without worrying about rising costs. Thus, Guaranteed Addition of Rs.40 (per Rs.1000 Sum Assured) all through the premium paying term comes as a great relief.

Flexibility in Term

Millennial today look forward to flexibility in Term as they decide on their financial commitment depending upon their career planning. This plan perfectly fits into their thought as the premium payment term has a wide range from as less as 5 years to as long as 16 years. The term is also linked to the commencement of benefits as here is where they can manoeuvre to their best advantage. This is one of the most preferred options available for a customer as he has the freedom to decide as how long he can pay premium.

Regular Income Benefit

This is something a new feature and that too a double delight for a policyholder as he gets to receive  this at the end of every year after the selected term and deferment period is over and that for lifetime.  This lifelong fixed annual income, at 10% of Sum Assured, can be linked to planned expenses by the policyholder for various lifecycle events like education, annual vacation, EMI repayment, loan repayments, pension  and so on. Who would not like to take this best advantage of a regular income, especially one is in the evening of his life?

Flexi Income Benefit

This is ‘one of a kind’ wonderful feature of this plan! For anyone, a secure future depends on being financially prepared for key milestones in his or her life such as children’s admission into a school or college of repute, marriage or buying a property. A better management of funds requires separate investment for each need and this is not something easy for anyone to do given the fast pace of life. However, in this plan, the regular income if not withdrawn is made to accumulate with a decent 5.5% interest compounded annually. The lumpsum financial goals can be met with by going in for a withdrawal upto 75% of the accumulated amount once a year. The needs can vary from annual college fees, purchase of a property, marriage, capital for a start-up, unforeseen medical expenses or purchasing costly household item. Thus, the financial requirements can be met with as originally planned in alignment with the life cycle needs. Further, the balance amount continues to accumulate accruing same interest and what more you want? The policyholder enjoys the flexibility of deferring and accumulating the income benefits with interest and this is highly attractive as well as unique in nature! Accumulated funds can also be gifted to grand children to create an asset for their future.

Liquidity thru Loan

The plan has multiple liquidity options in addition to Regular or Flexi Income benefits. The policyholder can raise a loan after 2 years’ premiums have been paid and the maximum permissible amount goes upto 75% of surrender value under both options. This is certainly an attractive feature and it can be termed as ‘liquidity at any time’ for the policyholder! The option of surrender also exists though it is generally not to be recommended in the interest of the policyholders.

Lifetime Coverage

According to a recent survey, 48% of millennial say they own life insurance, and nearly half say they either need to get coverage or increase their life insurance protection for a longer duration. This plan comes in handy to address this concern as coverage is ensured for lifetime together with all other benefits. The preference for life coverage among the youngsters is on the rise and therefore this requirement can be fulfilled through this feature. A combination of savings, periodical returns, lumpsum withdrawal together with lifelong coverage will, no doubt is the preferred choice of the millennial!

Riders for enhanced Protection

Riders at an affordable cost make a lot of sense and provide great value addition to policyholders in extending additional coverage. Under this plan, as many as five rider benefits are available and the policyholder can opt for either LIC’s Accidental Death and Disability Benefit Rider or LIC’s Accident Benefit Rider and the remaining three riders, namely, LIC’s New Term Assurance Rider, LIC’s New Critical Illness Benefit Rider and LIC’s Premium Waiver Benefit Rider are also available by paying additional premium subject to the eligibility conditions. Under the Critical Illness Benefit Rider, as many as 15 critical illnesses are covered. This offers a comprehensive coverage taking care of critical illnesses too at a time concern for health is weighing high in everyone’s mind and the ever increasing escalation of cost of health. One can pay premium for just 5 years and enjoy health cover for 35 years term or upto 75 years of age, whichever is earlier. What better coverage one can imagine than this?

Death Benefit

The plan also provides for benefit in the unfortunate event of death of not less than 105% of the total premium paid till the date of death. The ‘Sum Assured on Death’ is as higher of ‘Basic Sum Assured’ or ‘7 times of Annualized Premium’. The life assured can exercise the option so that the nominee can receive Death Benefit in instalments over the chosen period of 5 or 10 or 15 years instead of lump sum amount under an in-force as well as paid-up policy. Almost all the benefits as discussed above are available for a paid up policies too, subject to respective conditions.

Features of Convenience

The plan also offers the convenience of all modes of payment of premium including Monthly NACH. With regard to rebates, high Sum Assured cases are eligible for a maximum rebate of Rs.5.75 per Rs.1000 SA subject to Basic Sum Assured.

Thus, Utsav, the new-age plan is offering multiple features that will help grow the investments of the policyholders.  Besides the obvious benefit of life coverage, Utsav proves to be a comprehensive insurance – cum- investment plan that will assist in a prudent financial planning for the family and help them to take care of different life cycle needs over a period of time. Like a rainbow of colours, Utsav spills rainbow of benefits that will solve multiple financial needs. No wonder, ‘This is my kind of plan’!