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LIC Dhan Sanchay Plan 865 – Features, Eligibility and Review

LIC Dhan Sanchay Plan 865 – Features, Benefits, Positives, Negatives and Review

LIC has launched a new plan Dhan Sanchay Plan 865. This is the life insurance savings plan. LIC generally floats plans during year end to, attract investors who want to do last minute tax savings. However, this time it started floating from the beginning of the financial year. It floated a new plan Bima Ratna last month and now this is the second plan during this financial year. Should you invest in LIC Dhan Sanchay Plan No 865?

Also Read: LIC’s Jeevan Umang – Whole Life Plan – Should you opt?

Features of LIC Dhan Sanchay Plan

This is non linked and non participating, individual, savings and life insurance plan.

  • This plan comes with 4 different options:
    • Option-A: Level income benefit
    • Option-B: increasing income benefit
    • Option-C: single premium level income benefit
    • Option-D: single premium enhanced cover with level income benefit.
  • This plan provides guaranteed payout every year after the date of maturity.
  • Individuals in the age group of 3 years to 65 years can opt this plan.
  • Unlike its last plan which is offered only through corporate banks and agents, this plan can be purchased online and through offline.
  • Tenure of the plan is between 5 years to 15 years.
  • Post maturity, payout period would be equal to the premium paying term or policy term. This would depend on the options chosen by the investors.
  • Min sum assured is 2.5 Lacs and with no limit on the max sum assured.

What is the eligibility criteria in LIC Dhan Sanchay Plan?

Eligibility to take LIC Dhan Sanchay Plan No 865

What are various benefit options in LIC Dhan Sanchay?

Here are the benefits available in this plan. This needs to be considered while purchasing the plan and cannot be altered later-on.

A) Regular or Limited premium payment term (PPT) option

  • Option A: Level Income Benefit
  • Option B: Increasing Income Benefit

II) Single premium payment term (PPT) option

  • Option C: Single Premium Level Income Benefit
  • Option D: Single Premium enhanced cover with Level Income Benefit

When does the risk commences in this plan?

If the life insured is above 8 years, date of commencement of risk would be immediate.

In case the life insured is below 8 years, date of commencement of risk would be after 2 years from the date of the plan or after attaining 8 years of age whichever is earlier.

What Benefits available in LIC Dhan Sanchay Policy?

1) Death Benefit

If the life insured has died, his/her family members would get the following:

  • Option A & B: “Sum Assured on Death” shall be higher of 11 times of “Annualized Premium”; or “Sum Assured on Maturity”; or 105% of total premiums paid up to the date of death.
  • Option C: “Sum Assured on Death” shall be higher of 1.25 times of “Single Premium” or “Sum Assured on Maturity”.
  • Option D: “Sum Assured on Death” shall be 11 times of “Single Premium”.

Sum Assured on Maturity shall be equal to Annualized Premium or Single Premium, as applicable, multiplied by Maturity Benefit Multiplier.

2) Maturity Benefit

If the life insured survives till the end of the policy term, maturity amount = Guaranteed Income Benefit + Guaranteed Terminal Benefit would be paid.

What are the options in this Dhan Sanchay LIC plan?

There are two options available:

I) Rider Option:

Below riders can be opted in this plan.

  • LIC’s Accidental Death and Disability Benefit Rider
  • LIC’s New Term Assurance Rider
  • LIC’s New Term Assurance Rider
  • LIC’s New Critical Illness Benefit Rider
  • LIC’s Premium Waiver Benefit Rider

II) Take death benefit in installments:

In case of the death of the life insured, the family members or nominee would have an option to get death benefit in installments for 5 years. The interest rate would be 2% lower than last 5 years semi-annual G-Sec rate.

What are the Positive Factors in LIC Dhan Sanchay?

Here are the positive factors in this LIC new plan.

  • This is savings and life insurance plan. It provides life protection + periodic payouts after the premium payment term.
  • This LIC plan provides rebate on premium between 0.2% to 2.25% by way of incentives.
  • This plan is available both in online or offline.

Negative factors in Dhan Sanchay LIC Plan

Here are some of the negative factors in this plan.

  • Benefit computation is complicated. One cannot arrive this in a simple manner.
  • One needs to pay additional premiums if opted for half yearly, quarterly or monthly premium payment option.
  • LIC’s new plan offers death benefit to get in installments in 5 years. But in reality, it pays interest rate, which is equal to the bank SB account.
  • Rider benefits come with additional premiums.
  • If you by mistake took this plan and want to surrender, you need to forego 50% of the premiums paid till 7 years.
  • If the life insured commits suicide within 12 months after taking the plan, LIC’s new plan refunds 80% of premium only.

You may like: LIC Bima Ratna Policy – Who can invest?

LIC Dhan Sanchay Plan – Should you invest?

LIC’s new Dhan Sanchay Plan benefit computations are complicated. While it is a life insurance savings plan, such plans can offer between 4% to 5.5% returns. Even low risk investors might find it difficult to understand such plans. One should avoid such plans for the time being. There are better plans in LIC.

LIC’s new Dhan Sanchay Plan PDF (brochure)

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Suresh KP

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