LIC Jeevan Raksha Plan 894: Review

LIC Jeevan Raksha (Plan 894) is a non-linked, non-participating, pure-risk plan that provides life cover during the policy term, with no maturity benefit.

But is this LIC term plan the right choice for your needs? In this review, we look at its key features, eligibility, premium payment options, death benefit, rider benefits, and other important policy conditions.

What Is the LIC Jeevan Raksha Plan 894?

LIC Jeevan Raksha Plan 894 is a pure LIC term insurance plan that provides financial protection to the policyholder’s family if the policyholder dies during the policy term. If the policy is in force and the claim is admissible, the nominee receives the applicable death benefit. 

However, no maturity benefit is payable if the policyholder survives the entire policy term. The basic sum assured starts at ₹5 lakh and goes up to ₹24 lakh, subject to LIC’s underwriting policy.

LIC Jeevan Raksha: Single, Regular, and Limited Premium Payment Options

LIC Jeevan Raksha offers flexibility in how policyholders pay their premiums. Depending on their financial preferences, they can choose from three premium payment options:

• Regular Premium: Policyholders pay premiums throughout the policy term. The premium payment term matches the policy term.
• Limited Premium: Premiums are paid for a fixed period of 10 or 15 years, while the policy continues for the selected policy term.
• Single Premium: You pay the entire premium as a one-time payment at the start of the policy.

For regular and limited premium policies, you can pay premiums annually or half-yearly.

The plan also offers premium rebates:

• Online Sale Rebate: A 7.5% rebate on the tabular premium is available for premium payment terms of 10 to 42 years, while a 3% rebate applies to single premium policies.
• High Sum Assured Rebate: Eligible policyholders can receive additional rebates based on their age and basic sum assured. Under regular and limited premium payment options, the rebate can reach 18%.

Key Features, Riders, and Eligibility of the LIC Jeevan Raksha Plan

Key Features  

• Pure Protection: The plan provides a death benefit if death occurs during the policy term, subject to the policy being in force and the applicable terms and conditions.
• Flexible Premium Payments: Choose between regular premium, 10-year limited premium, 15-year limited premium, or single-premium payment options.
• Flexible Policy Term: Policyholders can choose a policy term of 15 to 42 years, subject to the maximum maturity age of 60 years.
• Death Benefit Payout Options: The death benefit can be paid as a lump sum or in instalments over 5, 10, or 15 years, subject to the applicable conditions.
• Online Purchase: You can buy the plan directly through LIC’s website or offline through licensed agents, corporate agents, brokers, and insurance marketing firms. Eligible online purchases also receive the applicable online-sale rebate.

Riders 

The plan offers an optional LIC Accident Benefit Rider for additional protection.

• In case of accidental death within 180 days of an accident, the rider provides an additional lump-sum benefit along with the base plan’s death benefit.
• The rider is available with regular and limited premium payment options, and you can opt for it by paying an additional premium during the premium-paying term.
• The rider sum assured cannot exceed three times the base plan's sum assured.
• The rider premium cannot exceed 30% of the base plan premium, subject to the applicable conditions. 

Ditto’s Take: The accident benefit rider may not add much value because the base plan already covers death regardless of the cause, including accidental death, without requiring an additional rider premium. The rider primarily adds a benefit for accidental disability, which is not covered under the base plan.

Eligibility

The plan has defined age, coverage, and policy-term requirements:

• Entry Age: 18 to 45 years
• Maximum Maturity Age: 60 years
• Basic Sum Assured: ₹5 lakh to ₹24 lakh, subject to underwriting
• Minimum Policy Term: 15 years for regular premium and limited pay 10 years, 20 years for limited pay 15 years.
• Maximum Policy Term: 42 years, subject to the maximum maturity age
• Premium Payment Terms: Single premium, 10-year limited premium, 15-year limited premium, or regular premium

LIC Jeevan Raksha Sample Premiums by Age and Cover

LIC’s sales brochure provides illustrative premiums for a ₹5 lakh basic sum assured for a male, non-smoker, standard life. The premiums below exclude applicable taxes. To estimate premiums based on your age, cover, policy term, and payment option, you can use an LIC term plan premium calculator before making a purchase.

Note: Premiums vary based on age, gender, smoking status, basic sum assured, policy term, premium-paying term, individual selections & insurer's underwriting. 

Importantly, LIC Jeevan Raksha does not offer ₹1 crore of life cover. The maximum basic sum assured is ₹24 lakh (subject to underwriting). Therefore, those looking for LIC term insurance 1 crore would need to consider a different LIC term plan.

Note: The above metrics reflect LIC's overall performance and are not limited to any particular product. The data is sourced from IRDAI Annual Reports and LIC’s public disclosures. For more data like this, explore the Ditto Data Lab.

Pros & Cons of the LIC Jeevan Raksha Plan

Pros

• Pure Protection: The plan is a non-linked, non-participating pure-risk policy, with fixed death benefits.
• Flexible Premium Payment: Policyholders can choose regular premium, 10-year limited premium, 15-year limited premium, or single-premium payment options.
• Online Purchase Benefit: Eligible online purchases receive a 7.5% rebate on tabular premiums for 10- to 42-year premium payment terms and 3% for single-premium policies.
• High Sum Assured Rebate: Eligible policyholders can receive rebates based on their age and basic sum assured.
• Death Benefit Installment Option: Nominees can receive the death benefit in installments over 5, 10, or 15 years, instead of as a lump sum.
• Optional Accident Protection: The accident benefit rider provides an additional lump-sum benefit in case of accidental death, subject to the rider terms. 

Cons

• Low Maximum Cover: The basic sum assured is capped at ₹24 lakh, which may be inadequate for individuals with financial dependents or substantial liabilities.
• Limited Entry Age: The plan is available only to individuals aged 18 to 45 years.
• Limited Customization: Apart from the optional accident benefit rider, the plan offers no other rider options to customize coverage to individual protection needs.

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Conclusion

LIC Jeevan Raksha Plan 894 may suit those seeking basic life protection with cover up to ₹24 lakh and flexible premium payment options. However, it may not suit those looking for higher coverage, more built-in term insurance features, or a wider range of riders for greater customization. Its only optional rider is the accident benefit rider.

Instead, you can go through the best term insurance plans in India, which offer greater flexibility, more customization, and comprehensive coverage.