LIC Dhan Rekha Insurance Policy: What Should You Look For Profit?

LIC Dhan Rekha is a Life Insurance plan, and Non-Equity-Linked policy, which is offering protection and savings to the policyholders and their family members. Along with proving periodic payments on survival of the policyholder at particular durations during the policy term, the policyholder will get a guaranteed lump sum amount on survival, at the time of maturity.

Eligibility

As per the policy, there will be different minimum entry ages, depending on the policy term. The minimum entry age will be 8 years for a Policy Term of 20 years, 3 years for a Policy Term of 30 years, 90 days for a Policy Term of 40 years. On the other hand, the maximum entry ages also vary under this plan. In the case of Limited Premium, it will be 55 years for Policy Term 20 years, 45 years for Policy Term 30 years, 35 years for Policy Term 40 years. The minimum maturity age should be 28 years for a Policy Term of 20 years, 33 years for a Policy Term of 30 years, 40 years for a Policy Term of 40 years. Maximum maturity age for Limited Premium 75 years.

The Minimum Basic Sum Assured under the LIC Dhan Rekha Plan is Rs. 2,00,000, with no restrictions on the maximum limit. The Basic Sum Assured will be in multiples of Rs. 25,000, of the said amount. You can choose from 3 policy term options, such as 20 years, 30 years, and 40 years. There will be 3 Limited Premium options, like 10 years for Policy Term of 20 years, 15 years for Policy Term of 30 years, and 20 years for a policy term of 40 years.

Death Benefit of LIC Dhan Rekha Plan

LIC Dhan Rekha plan, under the death benefits, offers financial support/ protection to the policyholders' families. As per LIC, the death benefit will be paid by the corporation on death during the policy term, will be the Sum Assured on Death along with Accrued Guaranteed Additions. Additionally, for Single premium payments, the Sum Assured on Death will be 125% of the Basic Sum Assured. However, for the limited premium payment, the Sum Assured on Death will be higher of 125% of Basic Sum Assured or 7 times of annualized premium. The Death Benefit under Limited Premium payment will not be less than 105% of total premiums paid. For the minor policyholders, whose age at entry is below 8 years, on death before the commencement of Risk, return of premium(s) paid excluding taxes.

A policyholder's family can apply for the Death Benefit in installments over a chosen period of 5 years instead of a lump sum amount. The Monthly installment will be Rs. 5,000, the Quarterly installment will be Rs. 15,000, the Half-Yearly installment will be Rs. 25,000, and the Yearly installment will be Rs. 50,000.

Survival and Maturity Benefit of LIC Dhan Rekha Plan

On the life assured surviving to each policy term, a fixed percentage of the Basic Sum Assured will be paid. For 20 years of the policy term, the Survival Benefit will be 10% of the Basic Sum Assured at the end of each of the 10th and 15th policy years. For 30 years of the policy term, the Survival Benefit will be 15% of the Basic Sum Assured at the end of each of the 15th, 20th, and 25th policy years. For 40 years of the policy term, the Survival Benefit will be 20% of the Basic Sum Assured at the end of each of the 20th, 25th, 30th, and 35th policy years. On Maturity, the Sum Assured on Maturity along with the accrued Guaranteed Additions, will be paid, where it will be equal to the Basic Sum Assured.

(Also read: LIC Jeevan Lakshya For A Promising Future Of Your Child)

 

Benefits calculation

This calculation has been done considering the limited premium option. In the first year, the premium will be taxed at 4.5%, and from the next year, it will be 2.25%.

Here, considering the age of entry is 30 years. If the basic sum assured is Rs. 2,00,000, the policy term is 20 years, and the premium paying term is 10 years, the death sum assured will be Rs. 2,50,000. In the first year, the yearly premium will be Rs. 22,202, and from the next year the yearly premium will be Rs. 21,724. The survival benefits after the end of the 10th policy year will be Rs. 20,000, and after the 15th policy year Rs. 20,000. At the time of maturity, the total approximate return will be Rs. 3,50,000.

Here, considering the age of entry is 15 years. If the basic sum assured is Rs. 5,00,000, the policy term is 30 years, and the premium paying term is 15 years, the death sum assured will be Rs. 6,20,000. In the first year, the yearly premium will be Rs. 38,675, and from the next year the yearly premium will be Rs. 37,843. The survival benefits after the end of the 15th policy year will be Rs. 75,000, after the 20th policy year it will be Rs. 75,000, and after the 25th policy year it will be Rs. 75,000. At the time of maturity, the total approximate return will be Rs. 11,50,000.

(Also read: LIC Nav Jeevan: Insurance Policy With Flexible Premiums: Should You Choose?)