LIC Jeevan Labh Review: Your Two-in-One Protection and Savings Plan

This Article was fact checked and last updated for accuracy on December 3, 2024 by Mani Karthik

Hey! Mani here.

So, your parents or that eager LIC uncle has been pushing the Jeevan Labh plan, right? 😅

I get these queries a lot from fellow NRIs. Usually starts with “Beta, secure your future…” (sounds familiar?)

Let me break this down from an NRI perspective – no jargon, no bias, just practical talk.

Quick Take

What is Jeevan Labh?

Think of it as a traditional savings+insurance combo:

• Premium paying terms: 10, 15, or 16 years
• Policy terms: 16, 20, or 25 years
• Death benefit: 10 times annual premium
• Maturity benefit: Sum assured + guaranteed additions

The Good Stuff 👍

Guaranteed Returns

• You know exactly what you’ll get
• No market fluctuation risks
• Fixed guaranteed additions

Tax Benefits

• Premium deduction under 80C
• Maturity amount tax-free under 10(10D)
• Good for NRI tax planning

Zero Maintenance

• Set and forget
• No need to track markets
• Auto-debit friendly

Loan Facility

• Can borrow against policy
• Useful for emergencies
• No questions asked

The Not-So-Good Stuff 👎

Returns are Modest

• ~6% effective returns
• Your NRE FD might give better rates
• Inflation barely covered

Long Lock-in

• Minimum 16 years
• Early surrender = poor returns
• Not good for short-term goals

Currency Risk

• Premium in INR
• Exchange rate fluctuations
• Could affect real returns

Mixed Product

• Not best for insurance
• Not best for investment
• Jack of all trades, master of none

My Personal Take 🤔

Here’s what I learned after having this policy for 5 years:

Should NRIs Buy It?

Consider It If You:

• Want a guaranteed-return Indian investment
• Have parents insisting on LIC investment
• Need tax-saving in India
• Prefer absolute safety over returns

Skip It If You:

• Need higher returns
• Want investment flexibility
• Already have sufficient insurance
• Prefer liquid investments

Better Alternatives for NRIs

For Insurance:

• Term insurance plans
• Much higher coverage
• Lower premiums

For Investment:

• NRE Fixed Deposits
• Mutual Funds
• Direct equity

For Tax Saving:

• ELSS funds
• PPF
• Tax-saving FDs

Pro Tips If You’re Buying

Choose Wisely:

• Go for shorter premium terms
• Take maximum cover
• Keep premiums manageable

Documentation:

• Keep NRI status updated
• Arrange for auto-debit
• maintain KYC compliance

Tax Planning:

• Understand NRI taxation
• Plan premium payments
• Consider exchange rates

Bottom Line

Jeevan Labh isn’t a bad plan – it’s just not the best for most NRIs.

It’s like going to a fancy restaurant and ordering dal-chawal. Nothing wrong with it, but you might be missing out on better options! 😉

If your parents insist (I know how that goes!), consider allocating a small portion of your portfolio. But don’t make it your primary investment strategy.

Remember: What works for your Indian relatives might not be the best for your NRI portfolio.

Questions about your specific situation? Drop them in the comments!

Catch you in the next post,
Mani

P.S. – Yes, I still have my Jeevan Labh policy. Sometimes, keeping family happy is worth that 2-3% lower return! 😄

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