Jeevan Tarang policy : Can I switch to LIC’s different plan with same paid premium?

[nishaneelesh]

I took Jeevan Tarang policy 1 and half years ago for 20 years and paying the premium on quarterly basis. I am not happy about the maturity return as it gives only bonus amount at the maturity and won’t get the sum assured amount. Just will be getting 5.5% yearly of sum assured till 100 years.

Can someone please suggest me what are the options I have to close the policy without losing the money which I paid till now?

Can I switch to LIC’s different plan with same paid premium?
Can the policy term reduced or something which reduce the years where I have to pay the premium?

Policy quarterly premium : Rs 6384 (annual amount 25,536)
Term : 20 years
Sum assured : 5 lakhs

Please suggest the available options for me?

Thanks in advance for your time and suggestions.

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[Rahul]

Can I switch to LIC’s different plan with same paid premium?
Can the policy term reduced or something which reduce the years where I have to pay the premium?

You can't switch between LIC Plans.
If you want to stop the policy (only after 3 yrs) , you have two choices , either make it a Paidup policy or take the Surrender Value.

[nishaneelesh]

Thanks Rahul for your comment,

What is the mean by paidup and surrender value, only after 3 years? what I will be getting on both the case so I can calculate if any loss on the paid premium.

Policy quarterly premium : Rs 6384 (annual amount 25,536)
Term : 20 years
Sum assured : 5 lakhs

So based on above mentioned figure, my paid premium will be Rs 76608 in 3 years.

Please suggest.

[nishaneelesh]

I was reading more about paidup value in LIC site and understand as my Jeevan Tarang policy is for 20 years with sum assured as 5 lakhs so it comes per year as 25000 (5 lakhs / 20) and if I pay the premium atleast for 3 years (25536*3 = 76608) and stop then it will turn as paidup policy and sum assured should be as 75000 (25000 * 3).

Can you please confirm the sum assured which I calculated is correct or not?
And I will eligible for reduced sum assured and bonus, right?
And when this amount will be paid to me? As we get only bonus amount and don't get the sum assured amount after maturity. Only 5.5% given every year later so what will happen if it becomes paidup after three years?

Please suggest.

[Expert]

Nishaneelesh - Don't post in multiple threads. Please post only in one thread.

What do you mean by paidup value?

If premiums have been paid for a period of three years and thereafter due to unforeseen circumstances, payments cannot be made, policy will automatically be converted into a paid up policy for a reduced sum assured, payable on the date of maturity or in event of the policyholder’s death, if earlier.

The paid-up value of a policy is the reduced sum assured calculated on a proportionate basis by using a simple formula

Paid-up Value=(No of premiums paid/Total no of premiums payable) x Sum Assured

How to calculate Paid-up Value of an Insurance Policy? Read here - Link

What is surrender value?

Surrender value is the amount the policyholder will get from the life insurance company if he decides to exit the policy before maturity.

How to check LIC policy's 'Surrender Value'? Read here - Link

only after 3 years?

You will get two choices, either make it a Paidup policy or take the Surrender Value, ONLY after 3 years.

[Expert]

I was reading more about paidup value in LIC site and understand as my Jeevan Tarang policy is for 20 years with sum assured as 5 lakhs so it comes per year as 25000 (5 lakhs / 20) and if I pay the premium atleast for 3 years (25536*3 = 76608) and stop then it will turn as paidup policy and sum assured should be as 75000 (25000 * 3).

Can you please confirm the sum assured which I calculated is correct or not?
And I will eligible for reduced sum assured and bonus, right?
And when this amount will be paid to me? As we get only bonus amount and don't get the sum assured amount after maturity. Only 5.5% given every year later so what will happen if it becomes paidup after three years?

Please suggest.

If you stop the policy in 3rd year, (assuming your Sum Insured is 5 lacs), your sum assured will reduce from 5 lacs to 75 thousands (15%), as you have paid the premium only for 15% of the tenure (20 years).

Jeevan Tarang Paid-up Policy shall not be entitled to the future bonuses. The existing vested reversionary bonuses, if any, shall remain attached to a paid-up policy. Also no survival benefit shall be payable under paid up policies.

[nishaneelesh]

Thanks for your time and comments.

Can you please also suggest..

• When this paidup amount will be paid to me with bonus if any in three years paid time?
• As we get only bonus amount and don't get the sum assured amount after maturity in Jeevan Tarang policy on the normal case. Only 5.5% given every year later so what will happen if it becomes paid-up after three years?
• Will it allow me the pay the premium in later years? Like.. I paid the premium till three years and it became as paid-up the after couple of years, want to start paying again.

[Expert]

When this paidup amount will be paid to me with bonus if any in three years paid time?

Paid-up value is your new sum insured and it will remain as your sum insured for term of your policy (i.e. 20 years in your case)

As we get only bonus amount and don't get the sum assured amount after maturity in Jeevan Tarang policy on the normal case. Only 5.5% given every year later so what will happen if it becomes paid-up after three years?

Check with LIC customer care.

Will it allow me the pay the premium in later years? Like.. I paid the premium till three years and it became as paid-up the after couple of years, want to start paying again.

Yes, you can reinstate your LIC policy, later on.