LIC Jeevan Shikhar Review

LIC Jeevan Shikhar - Review

LIC Jeevan Shikhar – Review

LIC has launched Jeevan Shikhar Plan (Plan 837 – UIN 512N305V01) which is participating, non-linked, saving cum protection single premium plan. This is especially targeted for the unplanned tax saving investment that people do in the month of January to March. The plan would be open till March 31, 2016.

We review LIC Jeevan Shikhar Plan in the post and tell you why you should not invest!

Features & Eligibility Criteria:

Minimum Entry Age: 6 years (completed)

Maximum Entry Age: 45 years (nearer birthday)

Sum Assured on Death: 10 times of tabular single premium

Minimum Maturity Sum Assured: Rs. 1,00,000

Maximum Maturity Sum Assured: No Limit (Maturity Sum Assured shall be in multiple of Rs. 20,000 only)

Policy Term: 15 years

Also Read: Whats the best Tax Saving Investments u/s 80C?

Determining Premium:

In case of LIC Jeevan Shikhar, you need to first choose the sum assured (minimum Rs 1 lakh) and the premium is calculated based on your age (referred as Tabular Single Premium in the policy document). For e.g. For sum assured of Rs 1 Lakh, the premium is Rs 42,580 for 30 year healthy person.

Death Benefit:

If death occurs in first 5 years of policy – 10 times the single premium paid

If death after 5 years of taking policy – 10 times the single premium paid and loyalty additions, if any

If the insured is less than 8 years of age, the death risk coverage would start only after the insured turns 8. If the death occurs before commencement of this risk, only the premium paid would be returned.

Maturity Benefit:

On maturity, you get the sum assured with loyalty additions, if any.

Surrender Value:

The plan can be surrendered anytime.

In case it’s surrendered in the First year, 70% of the premium paid is returned; thereafter 90% of the premium paid.

Loyalty Addition:

The loyalty addition will be paid in case of death or surrender of your policy for atleast five years. This addition is also applicable on maturity sum assured of the insurer.

Also Read: 13 Investments to Generate Regular Income


Loan is available against the policy after 3 months of purchase. The loan amount varies from 35% to 85% of the surrender value depending on the age of policy holder and number of policy years completed.

LIC Jeevan Shikhar – Returns Calculation

We take the example which LIC has as its benefit illustration.

Age at entry: 30 Years

Policy Term: 15 years

Sum Assured (at Maturity): Rs 1,00,000

Loyalty Additions: 10% of Rs 1,00,000 = Rs 10,000

Total sum payable at maturity = Rs 1,00,000 + Rs 10,000 = Rs 1,10,000

Single Premium: Rs 42,580

Service Tax: 3.625% of Rs 42,580 = Rs 1,543.5

Total Premium = Rs 44,124

Taking IRR function in Excel, the return comes out to be 6.28%

Points to Note:

  • The returns are dependent on age of the policy holder as mortality risk is lower for lower age.
  • Higher sum assured would have slightly higher returns as there is rebate for maturity sum assured of Rs 2 lakhs or more

Loyalty Additions taken in the above example is on the higher side and is based on the recent bonuses announced by LIC for its existing policies. The actual loyalty addition would be only known at the time on maturity.


LIC and all insurance companies’ target people looking for quick solutions for their tax saving investments and so all of them keep on launching multiple policies at this time of the year. As you can see the returns for LIC Jeevan Shikhar are on the lower side. Also the life insurance offered in inadequate.

If you are looking for safer avenues and long term avenue to save tax, PPF offering 8.7% interest is much better bet.

Also Read: PPF – Safe, Secure, Tax Free Returns and Saves Tax

Miss-sold LIC Jeevan Shikhar policy?

Since these plans are pushed hard by agents you might be reading this after you have paid your premium. The good news is you can cancel the policy within 15 days of receiving it. This is known as Free Look Period in Insurance world.

Once you submit your cancellation request, LIC would return your premium after deducting the proportionate risk premium for the period on cover, stamp duty charges, service tax and any charges incurred on medical examinations.

LIC Jeevan Shikhar

LIC Jeevan Shikhar

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