Understanding the Implications of Stopping Premium Payments for LIC Jeevan Anand Policy
If you have an insurance policy through Life Insurance Corporation (LIC) known as Jeevan Anand, and have been paying premiums for 8 years, what happens if you decide to stop paying premiums further? This article will provide a comprehensive look at the policies, terms, and consequences associated with terminating premium payments during this period.
Paid-Up Value and Sum Assured
Once you've paid premiums for at least three years, your policy transitions into a paid-up policy. This means the sum assured (coverage amount) will be adjusted based on the number of premiums you have paid. For instance, if you've paid premiums for 8 years out of the 10-year term of the policy, your coverage amount might be reduced proportionally. In case of a claim during the policy term, you would receive a reduced sum assured based on the paid-up value.
Surrender Value
If you decide to surrender the policy after 8 years, you may be eligible for a surrender value. This value is typically a percentage of the total premiums paid and is determined by the specific terms of your policy. However, it's important to note that the surrender value might be lower than the total premiums paid, as it is calculated based on the policy's terms rather than the premiums paid.
Benefits at Maturity and Death Benefit
When the policy reaches its maturity (at the end of the term), you will receive the maturity benefit based on the paid-up value. If the policyholder passes away during the policy term, the nominee will receive the death benefit based on the paid-up sum assured, regardless of whether premiums have been paid in subsequent years.
Policy Lapse and Reinstatement
If you stop paying premiums after 8 years, your policy will typically be considered lapsed. In such cases, you may have the option to reinstate the policy once again. However, the exact steps and conditions for reinstating the policy would need to be discussed with LIC or your insurance agent to ensure you meet all the necessary requirements.
What Happens After 3 Years of Premium Payment
If you've only paid premiums for 3 years and then stop paying for 2 more years, your policy will still remain a paid-up policy as long as you've paid for at least 3 years. In this case, your coverage amount will be reduced proportionally to the number of premiums paid. However, if you seek to receive a refund of the premiums paid for the first 3 years, you may be eligible for a partial refund. Typically, you might receive around 50-70% of the premiums paid, excluding service taxes.
While this may seem like a small amount after paying a significant sum, if you continue with the policy for an additional 5-6 years, you might eventually have your premiums paid back to you, potentially with some bonus. This scenario is more feasible for those interested primarily in risk cover rather than the regular premium payments.
Alternative Plan: Jeevan Amulya Plan II
If your primary need is for a higher risk cover and you're not concerned about the regular premium payments, you might consider the Jeevan Amulya Plan II. This policy provides a minimum cover of 25 lakh rupees with a similar premium structure over a longer term, offering better value and flexibility.
Contact Your Insurance Agent for Detailed Information
Given the complexity of these policies and the specific terms applicable to each scenario, it's highly advisable to contact LIC or your insurance agent for detailed information. They can provide you with the most accurate and personalized guidance related to your policy and the implications of your premium payment decisions.