LIC 5 Years Plan Reviews

Life Insurance Corporation of India (LIC) is one of the most trusted insurance providers in the country, offering a wide range of plans customized to different needs. Among these, the 5-year plans are particularly appealing to individuals seeking short-term investments with financial security.

This article reviews LIC’s 5-year plans, explores their benefits, and provides comparison tables to help you make an informed decision.

What Are LIC 5-Year Plans?

LIC 5-year plans are short-term insurance and investment schemes designed for individuals who want returns within a relatively short period while ensuring life coverage. These plans are ideal for:

• Individuals seeking risk-free investments.
• Policyholders looking for a mix of savings and insurance.
• Short-term goals like funding education, marriage, or purchasing assets.

Key Benefits of LIC 5-Year Plans

1. Short-Term Commitment: These plans are suited for those who don’t want to lock in their money for a long duration.
2. Guaranteed Returns: Most LIC 5-year plans offer assured benefits, making them a safe investment option.
3. Tax Benefits: Policyholders can avail of deductions under Section 80C of the Income Tax Act, and maturity proceeds are often tax-free under Section 10(10D).
4. Life Coverage: Along with savings, these plans provide life insurance coverage for financial protection.
5. Liquidity Options: Many plans allow policy loans after a certain period, ensuring liquidity in emergencies.

Popular LIC 5-Year Plans

LIC’s New Jeevan Anand

• Type: Endowment Plan
• Features: Combines savings with life insurance coverage.
• Key Benefits:
  • Maturity benefits after 5 years.
  • Life cover continues even after the policy term ends.
  • Loan facility available.

LIC’s Jeevan Labh

• Type: Limited Premium Payment Plan
• Features: Offers a blend of savings and insurance.
• Key Benefits:
  • Attractive maturity returns.
  • Bonus additions from LIC.
  • Flexibility in premium payment terms.

LIC’s Bima Jyoti

• Type: Savings-Cum-Insurance Plan
• Features: Guaranteed yearly additions to the sum assured.
• Key Benefits:
  • Assured returns and life coverage.
  • Tax benefits on premiums and payouts.
  • Suitable for short-term financial goals.

LIC’s Micro Insurance Plans

• Type: Special Category Plan
• Features: Designed for low-income groups with minimal premiums.
• Key Benefits:
  • Affordable coverage.
  • Simple policy terms and conditions.
  • Guaranteed maturity benefits.

LIC’s Money Back Plans

• Type: Money-Back Policy
• Features: Periodic returns during the policy term.
• Key Benefits:
  • Survival benefits every 5 years.
  • Life cover throughout the term.
  • Loan facility available.

Comparison of LIC 5-Year Plans

Here’s a detailed comparison table to help you evaluate these plans:

Plan Name	Type	Sum Assured	Premium Payment Term	Maturity Benefit	Life Cover	Loan Facility
LIC New Jeevan Anand	Endowment	₹1,00,000 and above	5 Years	Sum Assured + Bonuses	Continues after term	Yes
LIC Jeevan Labh	Limited Premium Payment	₹2,00,000 and above	Flexible (5 Years+)	Sum Assured + Final Bonuses	Covers term + flexibility	Yes
LIC Bima Jyoti	Savings-Cum-Insurance	₹50,000 and above	5 Years	Sum Assured + Guaranteed Additions	For policy term	Yes
LIC Micro Insurance	Low-Premium Insurance	₹5,000 to ₹50,000	5 Years	Sum Assured	Policy Term Only	Yes (Limited)
LIC Money Back Plan	Money-Back Policy	₹75,000 and above	5 Years	Survival Benefits + Final Amount	For policy term	Yes

Factors to Consider When Choosing a 5-Year Plan

1. Financial Goals: Are you looking for savings, insurance, or both?
2. Premium Affordability: Evaluate the premium amounts and their frequency.
3. Maturity Benefits: Check the maturity payout and bonuses offered.
4. Life Cover: Consider whether the policy provides adequate coverage for your dependents.
5. Flexibility: Look for plans offering features like premium holidays or loans.

Who Should Invest in LIC 5-Year Plans?

LIC’s 5-year plans are perfect for:

• Young professionals starting their financial journey.
• Parents planning for short-term educational goals for their children.
• Individuals nearing retirement who want a short-term savings instrument.
• Those seeking tax savings and risk-free returns.

Advantages and Limitations

Advantages

• Risk-Free Investment: LIC plans are backed by government assurance, ensuring safety.
• Flexibility: Options to customize the policy according to your needs.
• Additional Bonuses: LIC often declares bonuses, enhancing maturity payouts.

Limitations

• Lower Returns: Compared to market-linked plans like mutual funds, returns might be lower.
• Liquidity Constraints: While loans are available, withdrawing the full amount before maturity isn’t possible.
• Strict Terms: Missing premiums may lead to penalties or policy lapse.

Step-by-Step Guide to Buying a LIC 5-Year Plan

1. Assess Your Needs: Identify your financial goals and coverage requirements.
2. Research Plans: Compare different plans, focusing on premiums, benefits, and flexibility.
3. Consult an Agent: LIC agents can provide tailored advice based on your needs.
4. Complete Documentation: Submit ID proof, address proof, and income proof.
5. Pay the Premium: Choose from annual, semi-annual, quarterly, or monthly payment options.
6. Review the Policy Document: Ensure all terms and benefits are clearly stated.

Our Recommendation

LIC’s 5-year plans offer an excellent combination of savings, security, and insurance. They cater to a wide audience, from young professionals to retirees, ensuring short-term financial stability. While these plans may not offer the highest returns compared to market-linked investments, their guaranteed benefits, and life coverage make them a reliable choice.

Before choosing a plan, assess your financial goals, compare options, and consult a licensed advisor to ensure you select the right plan for your needs. With LIC’s legacy of trust and performance, these 5-year plans can be a secure step toward achieving your short-term financial objectives.