With a commitment to securing the dreams and aspirations of its policyholders, LIC of India has become synonymous with financial prudence and stability. LIC Dhan Sanchay Plan is another prominent life insurance plan offering the combined benefit of life protection and savings.
Have you ever wondered about a financial cushion that shields your loved ones in times of need and acts as a strategic tool for wealth accumulation? LIC Dhan Sanchay is a tailored life insurance plan that ensures the financial security of your family and offers a systematic way to build a corpus for your future aspirations. This article discusses every key detail about the Dhan Sanchay Plan you need to know before making a purchase decision.
What is LIC Dhan Sanchay Plan?
LIC Dhan Sanchay Plan is a non-linked, non-participating, individual life insurance plan offering a combined life risk protection and savings benefit. Simply put, the plan is a great way to secure your family financially in your absence. If the life assured survives the maturity period, it ensures a guaranteed income benefit throughout the policy payout period. The plan is available for online purchase on LIC India official website and can be purchased offline through agents and intermediaries, including POSP advisors and common public service centres.
Key Highlights of LIC Dhan Sanchay Plan
Below are the key specifications of the LIC Dhan Sanchay plan, making it a prevailing life insurance purchase for an individual.
- Plan Type
- Income Benefit Option
- Premium Paying Term
- Grace Period
Endowment Plan
Level and increasing
For 10 year policy term: 5 & 10 years
For 15 year policy term: 5, 10 & 15 years
30 days
Eligibility Criteria of LIC Dhan Sanchay Plan
You need to meet the following eligibility criteria and restrictions to purchase LIC Dhan Sanchay Plan for a secured future:
| Parameters | Specifications |
|---|---|
| Minimum Entry Age | 3 years |
| Maximum Entry Age | Option A and B: 50 years Option B: 65 years Option C: 40 years |
| Minimum Maturity Age | 18 years |
| Maximum Maturity Age | Option A and Option B: 65 years Option C: 80 years Option D: 55 years |
| Policy Term | Option A and Option B: 10 & 15 years Option C and Option D: 5, 10, & 15 years |
| Payout Period | Option A and Option B: Equal to premium paying term Option C and Option D: Equal to policy term |
| Minimum Annualized/ Single Premium | Option A and Option B: Rs. 30,000 Option C and Option D: Rs. 2 Lakh |
| Maximum Premium | No limit |
| Minimum Sum Assured on Death | Option A and Option B: Rs. 3, 30,000 Option C: Rs. 2.5 Lakh Option D: Rs. 22 Lakh |
Date of Commencement of Risk: For the life assured of 8 years or above, the risk commences immediately after the policy issuance. If the Dhan Sanchay LIC policy is issued in the name of the life assured less than 8 years, the risk commences as
- 2 years after the date of policy issuance or,
- On the policy anniversary falling with or immediately after the life assured turns 8, whichever is earlier.
Date of Vesting: If the LIC Dhan Sanchay Plan is issued on the life of a minor, the policy automatically vests on the life assured on a policy anniversary on or following the completion of 18 years.
Benefits Options
Depending upon the financial suitability, the policyholder can opt to receive the benefits at the time of the policy inception in the following manner:
Once you select a benefit option, no alteration is possible.
- For regular or limited premium payment
Option A: Level income benefit
Option B: Increasing income benefit - For single premium payment
Option C: Single premium level income benefit
Option D: Single premium enhanced cover with the level income benefit
LIC Dhan Sanchay Benefits
When all the premium payments are duly paid under the LIC Dhan Sanchay Plan, the policyholder is eligible to receive the following benefits:
Death Benefit
On the unfortunate death of the life assured during the policy term (after the date of commencement of risk but before the date of maturity), the beneficiaries receive the death benefit as sum assured on death. Based on the benefit option selected, the sum assured on death are payable as:
| Benefit Option | Sum Assured on Death |
|---|---|
| Option A and Option B | Higher of
|
| Option C | Higher of
|
| Option D | 11 times Single premium |
In case the death of a minor occurs before the risk commencement, the beneficiaries receive the total premium paid, excluding any taxes or extra charges. The death benefit in such a condition is paid in a lump sum or instalments over 5 years.
Maturity Benefit
If the life assured survives the maturity period, they are entitled to receive the maturity benefit in the form of Guaranteed Income Benefit and Guaranteed Terminal Benefit.
Guaranteed Income Benefit (GIB): The first instalment of Guaranteed Income Benefit is paid after the date of maturity and so on in advance, depending on the premium payout mode selected. The Guaranteed Income Benefit depends on the benefit option selected, policy term, and premium paying term. The calculation for each Guaranteed Income Benefit for different benefit options is done as follows:
| Benefit Option | Guaranteed Income Benefit | Payout |
|---|---|---|
| Option A and Option B | Annualised Premium x GIB Multiple x Modal factor for GIB | Option A: Constant Option B: Increasing |
| Option C and Option D | Single Premium x GIB Multiple x Modal factor for GIB | Constant |
Guaranteed Terminal Benefit (GTB): The Guaranteed Terminal Benefit is paid with the last instalment of Guaranteed Income Benefit, and thereafter the policy terminates. No benefits are payable later on. The Guaranteed Terminal Benefit is calculated as:
| Benefit Option | Guaranteed Income Benefit |
|---|---|
| Option A and Option B | Annualised Premium x GIB Multiple x Modal factor for GIB |
| Option C and Option D | Single Premium x GIB Multiple x Modal factor for GIB |
In case of the death of the life assured during the payout period (after the maturity period but before the last instalment of Guaranteed Income Benefit released), the nominee continues to receive the Guaranteed Income Benefit as per the applicable payout mode. In addition, the Guaranteed Terminal Benefit is payable with the last installment of the Guaranteed Income Benefit.
Optional Benefits Under LIC Dhan Sanchay
Depending on personal requirements, the policyholder can opt for the following optional benefits and extend the underlying policy benefits.
Rider Benefits
The policyholder needs to pay additional premiums to avail of any of the following riders mentioned below:
| Premium Payment Mode | Benefit Option | Available Rider(s) |
|---|---|---|
| Regular/ Limited Premium Payment | Option A and Option B |
|
| Single Premium Payment | Option C and Option D |
|
However, the policyholder can only opt between any of the LIC’s Accidental Death and Disability Benefit Rider and LIC’s Accident Benefit Rider. Hence, they can avail of a maximum of 4 addon riders under the Dhan Sanchay LIC Plan.
Option to Take Death Benefits in Instalments
If the policyholder opts for this option, the beneficiaries receive the full or part of the death benefit in instalments spread across a period of 5 years instead of a lump sum amount. The instalments are then paid in advance per the selected mode.
| Premium Payment Mode | Minimum Instalment Amount |
|---|---|
| Monthly | Rs. 5,000 |
| Quarterly | Rs. 15,000 |
| Half-yearly | Rs. 25,000 |
| Annually | Rs. 50,000 |
Option to Receive Maturity Benefit in Lump Sum
The policyholder or the life assured (after completing the age of 18) can opt for this option, at least 3 months before the due date of the maturity of the policy. If the option is opted for, the maturity benefit is paid in a lump sum equal to the sum assured on maturity.
Option to Receive the Outstanding Instalments in Lump Sum During the Payout Period
Under this option, the policyholder can opt to receive the outstanding Guaranteed Income Benefit and Guaranteed Terminal Benefit in a lump sum amount instead of in instalments. Upon the payment of the lump sum amount, the policy shall terminate.
Under an in-force policy, the lump sum amount is payable higher of:
- Sum assured on maturity, deducting the sum total of Guaranteed Income Benefit already paid, or
- The discounted value of outstanding payouts, i.e. unpaid, Guaranteed, and Guaranteed Terminal benefits.
Under a paid-up policy, the lump sum amount payable shall be higher of:
- Maturity paid-up sum assured, deducting the sum total of Reduced Guaranteed Income Benefit already paid, or
- The discounted value of outstanding payouts, i.e. unpaid Reduced Guaranteed Income Benefit and Reduced Guaranteed Terminal Benefit.
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Additional Features of LIC Dhan Sanchay
Besides the benefits mentioned above, here are some additional features of the LIC Dhan Sanchay Plan that make it a suitable option to invest in:
Flexible Premium Payment
The policyholder can make the premium payment towards LIC Dhan Sanchay Policy regularly at different modes - yearly, half-yearly, quarterly, and monthly.
Grace Period
A grace period of 30 days is allowed to make due premium payments in yearly, half-yearly, or quarterly modes and 15 days of grace period for monthly premiums from the date of the first unpaid premium. During the grace period, the policy shall remain in force, and all the benefits are payable without interruption. The policy lapses if the premium is not paid within the grace period.
Policy Revival
The LIC Dhan Sanchay policy revival is only possible in the case of Option A and Option B. The policyholder can revive the LIC policy within a period of 5 consecutive years from the date of the first unpaid premium but before the date of maturity. The policyholder needs to pay all outstanding premiums with interest, where LIC India fixes the interest rate.
Rebate and Incentives
LIC Dhan Sanchay Policy offers rebates and incentives under the following circumstances.
- Modal Loading: The modal loading is only allowed under Option A and Option B.
Mode Loading Yearly NIL Half-yearly 1.5% of Annualised Premium Quarterly 2.5% of Annualised Premium Monthly 3.0% of Annualised Premium - Incentive for High Premium: When the policyholder opts for the high premiums (the annualised premium of Rs. 50,000 and above or single premium of Rs. 3 Lakh and above), the GIB Multiple, GTB Multiple, and Maturity Benefit Multiplier are increased by a fixed percentage as an incentive.
- Incentive for Online Sale: Some incentives are payable if the policyholder purchases the Dhan Sanchay Plan online without assistance from the agent or intermediaries. Under such a scenario, the GIB Multiple, GTB Multiple, and Maturity Benefit Multiplier are increased by a fixed percentage as an incentive benefit.
Paid-Up Value
LIC Dhan Sanchay Plan attains the paid-up value only when Option A or Option B is opted for. If the policyholder pays the premium towards LIC Dhan Sanchay for less than two full years and subsequent premiums are not paid even after the expiry of the grace period, all the benefits under the plan are ceased. The life assured receives no benefits under such a case.
If the policyholder pays the premium towards the LIC Dhan Sanchay Plan for at least two full years and consecutive premiums are not paid, the policy attains the paid-up value till the end of the policy term.
The Sum Assured on Death is reduced to the Death Paid-Up Sum Assured, and the Sum Assured on Maturity is reduced to the Maturity Paid-Up Sum Assured.
Policy Surrender
Suppose the policyholder has opted for Option A or Option B. In that case, they can surrender the LIC Dhan Sanchay Plan anytime during the policy term only if they have paid the premium towards LIC Dhan Sanchay for at least two years. Meanwhile, in the case of Option C or Option D, the policyholder can surrender the policy anytime during the policy term. LIC of India pays the applicable surrender value, higher of:
- Guaranteed Surrender Value, or
- Special Surrender Value
Policy Loan
To fulfil the liquidity requirements, the policyholder can avail of the loan under the LIC Dhan Sanchay Plan during the policy term as follows:
- For Option A and Option B: At least two full years premium are duly paid
- For Option C and Option D: Anytime after three months from the date of policy issuance
The maximum loan amount under LIC Dhan Sanchay can be granted as follows:
| Benefit Option | Loan Availability |
|---|---|
| Option A and Option B | For in-force policies: upto 90% of the Surrender Value For paid-up policies: upto 80% of the Surrender Value |
| Option C and Option D | Upto 75% of the Surrender Value |
Tax Benefit
The policyholder can avail of tax benefits of up to Rs. 1.5 Lakh on the premium paid towards LIC Dhan Sanchay under Section 80C of the Income Tax Act, 1961. Also, the benefits received are tax-free under Section 10 (10D) of the ITA, 1961.
Free Look Period
A free look period of 30 days is allowed under LIC Dhan Sanchay Plan, during which the policyholder can review the policy. In case they are not satisfied with the terms and conditions, they can return the policy to the corporation after stating the reasons for objections. LIC India cancels the policy and returns the amount of premium deposited after deducting any applicable charges.
Waiting Period
In case the LIC Dhan Sanchay Plan is purchased through a POSP-LI or CPSC-SPV, and on the death of the life assured within 90 days from the date of commencement of risk, LIC India refunds the total premium paid, if the cause of death is not an accident.
If the death is caused due to an accident during the waiting period, the Sum Assured on Death is payable to the nominee.
Exclusions Under LIC Dhan Sanchay
Suicide committed under a certain time frame prevents the nominee from receiving the pre-determined benefits, and the benefits are payable as:
Under Single Premium Payment (Option A and Option B)
If the life assured commits suicide at any time within 12 months from the date of commencement of risk, the nominee receives 80% of the single premium paid, excluding any taxes.
Under Regular Premium Payment (Option C and Option D)
- If the life assured commits suicide at any time within 12 months from the date of commencement of risk, the nominee receives 80% of the single premium paid, excluding any taxes.
- If the life assured commits suicide within 12 months from the date of revival of the policy, the nominee receives an amount higher of
- 80% of the total premium paid till the date of death, or
- Surrender value available on the date of death
- The clause is not applicable under the following circumstances
- When the life assured is below 8 years of age at the time of policy revival/ risk commencement.
- On the policy lapse without acquiring the paid-up value.
Final Words
Dhan Sanchay LIC Plan is a great way to secure monetary help for the family in case of any unforeseen event with the sole breadwinner. Moreover, the plan offers regular income benefits to the life assured after surviving the maturity period. Individuals can buy the Dhan Sanchay LIC Plan online and offline, depending on their suitability. If purchased online, the life assured can acquire predefined incentives.
Connect with an LIC agent or POSP advisor near your location with the help of RenewBuy Advisor Connect and buy the LIC Dhan Sanchay Plan offline. Once purchased, you can manage your Dhan Sanchay LIC Plan on the LIC e-portal. Just log in to the LIC Customer Portal using your User ID and password to make LIC premium payment online, track LIC policy status, LIC policy revival, and check for LIC claim status anytime. If you need any assistance, get ever-ready support from LIC customer support.
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