Life Insurance Corporation (LIC) is a trusted name in the insurance sector, offering various insurance products to cater to different needs of individuals. One such product is LIC Jeevan Kiran, a popular insurance plan that provides financial security to policyholders and their families.
Calculating the premium for LIC Jeevan Kiran can seem daunting at first, but with a basic understanding of how the premium is determined, you can easily calculate it yourself. In this article, we will guide you through the process of calculating the LIC Jeevan Kiran premium in a simplified manner.
Understanding LIC Jeevan Kiran
Before diving into the premium calculation, let’s understand the basic features of LIC Jeevan Kiran. It is a non-linked, non-participating, endowment assurance plan that offers a combination of insurance protection and savings. The key features of LIC Jeevan Kiran include:
- Death Benefit: In case of the policyholder’s unfortunate demise during the policy term, the nominee receives the sum assured along with bonuses, if any.
- Maturity Benefit: If the policyholder survives the policy term, he/she receives the sum assured plus bonuses, if applicable.
- Surrender Value: The policy can be surrendered after completion of a certain number of years, and the surrender value will be paid out to the policyholder.
- Loan Facility: Policyholders can avail of a loan against the policy after a certain period.
Factors Affecting LIC Jeevan Kiran Premium Calculation
Several factors come into play when calculating the premium for LIC Jeevan Kiran. The key factors that influence the premium amount include:
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Age of the Policyholder: The age of the policyholder at the time of policy purchase plays a significant role in determining the premium. Generally, younger individuals are charged lower premiums compared to older individuals.
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Sum Assured: The sum assured chosen by the policyholder also affects the premium amount. Higher the sum assured, higher will be the premium.
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Policy Term: The duration for which the policyholder wants to be covered under the plan impacts the premium calculation. Longer policy terms usually result in higher premiums.
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Premium Payment Mode: The premium can be paid monthly, quarterly, half-yearly, or annually. Choosing a more frequent payment mode may slightly increase the annual premium.
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Smoker/Non-smoker Status: Smoking habits of the policyholder are considered while calculating the premium. Smokers are charged higher premiums due to their higher health risks.
Calculating LIC Jeevan Kiran Premium
Now, let’s dive into the actual calculation of LIC Jeevan Kiran premium. The premium amount can be calculated using the following formula:
Premium = (Sum Assured * Premium Rate per thousand) + Taxes
The premium rate per thousand will depend on the age of the policyholder, policy term, and other factors. You can refer to the premium rate chart provided by LIC or use online premium calculators for quick estimations.
Tips to Lower LIC Jeevan Kiran Premium
If you find the premium amount too high, here are some tips to lower the LIC Jeevan Kiran premium:
- Purchase the policy at a younger age: Younger individuals are charged lower premiums due to lower perceived risk.
- Opt for a longer policy term: While this may increase the overall premium, the average premium amount per year may reduce.
- Maintain a healthy lifestyle: Non-smokers and individuals with no major health issues are charged lower premiums.
Frequently Asked Questions (FAQs)
- Can I change the policy term after purchasing LIC Jeevan Kiran?
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No, the policy term cannot be changed post-purchase.
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Is the premium amount fixed throughout the policy term?
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Yes, the premium amount remains fixed unless there are any changes in the policy conditions.
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Can I take a loan against LIC Jeevan Kiran?
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Yes, you can avail of a loan after a certain number of years as per policy conditions.
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Is the premium amount tax-deductible?
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Yes, the premium paid for LIC Jeevan Kiran is eligible for tax deductions under the Income Tax Act.
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What happens if I miss paying the premium on time?
- There is usually a grace period provided by LIC to pay the premium. Failing to pay even within the grace period can lead to policy lapse.
Calculating the LIC Jeevan Kiran premium may seem complex initially, but with a clear understanding of the key factors and the premium calculation formula, you can easily determine the premium amount. It is advisable to consult with a financial advisor to assess your insurance needs and choose the right coverage amount and policy term that suits your requirements and budget.