A Smart Term Plan Designed to Cover Loan Liabilities: The LIC Yuva Credit Life Plan 877 is a specially designed decreasing term insurance plan that provides financial protection to the borrower’s family against outstanding loans in case of the unfortunate demise of the policyholder. This plan is best suited for loan-takers—such as home loan, vehicle loan, or personal loan borrowers—who want to ensure their family is not burdened with loan repayment in their absence.
Launch Date: 6th August 2024
Plan Type: Non-Linked, Non-Participating, Individual, Pure Risk Life Insurance
✅ Key Features of LIC Yuva Credit Life Plan 877
- 🔹 Decreasing Term Assurance: The death benefit reduces year by year, in line with a typical loan repayment schedule.
- 🔹 Death Benefit Only: No maturity benefit is payable under this plan.
- 🔹 Customizable Risk Cover Schedule: Based on chosen sum assured, policy term, and interest rate (6% to 12%).
- 🔹 Available Premium Payment Options:
- Single Premium (lump sum)
- Limited Premium (same as premium payment term)
- 🔹 Settlement Option: Nominee can receive the death claim in equal installments over 5, 10, or 15 years.
- 🔹 Lower Premiums: Premium rates are categorized into Smoker and Non-Smoker rates.
- 🔹 High Sum Assured Rebates: Enjoy discounted premiums for higher coverage amounts.
- 🔹 Online Purchase Available: Buy easily using credit card, debit card, UPI, wallets, or net banking.
📋 Eligibility Criteria & Policy Details
| Criteria | Minimum | Maximum |
|---|---|---|
| Entry Age (Last Birthday) | 18 years | 45 years |
| Maturity Age | 23 years | 75 years |
| Policy Term | 5 years | 30 years |
| Basic Sum Assured | ₹50 Lakhs | ₹5 Crores |
| Premium Payment Options | Single / Limited | |
| Minimum Premium | ₹3,000 (Limited) | ₹13,000 (Single) |
| Premium Modes | Single, Yearly, Half-Yearly |
📉 How the Decreasing Term Benefit Works
Under this plan, the death benefit reduces every policy year based on a predetermined Risk Cover Schedule, which depends on:
- Basic Sum Assured
- Chosen Policy Term
- Selected Interest Rate (6% to 12%)
Even if your actual loan interest rate is different, LIC will base the benefit reduction on the selected rate only. The death benefit for each policy year is clearly listed in this Risk Cover Schedule and may or may not match the actual outstanding loan balance.
At the start, the sum assured is equal to the full Basic Sum Assured and decreases each year thereafter.
💰 Death Benefit
If the Life Assured passes away during the policy term, and the policy is active:
For Limited Premium Policy:
The Death Benefit = Higher of:
- 105% of total premiums paid (excluding taxes and rider charges), or
- Sum Assured on Death (as per the Risk Cover Schedule for the year)
For Single Premium Policy:
The Death Benefit = Basic Sum Assured on Death (as per the Risk Cover Schedule)
✖️ Maturity Benefit
There is no maturity or survival benefit under LIC Yuva Credit Life Plan 877. This plan is a pure risk cover product meant only for financial protection in case of death.
🧾 Sample Illustration: How LIC Yuva Credit Life Plan Works
Let’s understand the plan with an example:
👤 Mr. Shyam’s Policy
| Details | Input |
|---|---|
| Age | 30 years |
| Sum Assured | ₹50 Lakhs |
| Policy Term | 20 years |
| Premium Option | Single Premium |
- Shyam buys the plan to cover his home loan.
- He chooses an interest rate of 8% for the Risk Cover Schedule.
- His premium is calculated accordingly.
- If Shyam dies in year 5, the death benefit will be as per the sum assured listed for year 5 in the 8% Risk Cover Schedule.
The death benefit may or may not exactly match the outstanding loan amount, but it provides a strong financial shield.
📌 Other Policy Features
| Feature | Details |
|---|---|
| Tax Benefits | Eligible under Section 80C and Section 10(10D) of the Income Tax Act |
| Policy Revival | Within 5 years from the date of first unpaid premium |
| Free Look Period | 15 days from receipt of policy documents to cancel without penalty |
| Grace Period | 30 days for yearly/half-yearly premium payments |
| Loan Facility | Not Available under this plan |
| Surrender Benefit | Available only for Single Premium Policies |
| Surrender Value | Higher of Guaranteed or Special Surrender Value |
| Suicide Clause | Within 12 months: 80% of premiums (excluding taxes & rider premium) refunded |
🔁 Surrender Details
| Premium Option | Surrender Value Availability |
|---|---|
| Single Premium | Can surrender any time; will receive GSV or SSV, whichever higher |
| Limited Premium | No surrender value available |
🎯 Why Choose LIC Yuva Credit Life Plan 877?
✅ Ideal for loan-takers – home loan, car loan, personal loan
✅ Reducing cover aligned with repayment schedule
✅ Customizable coverage with interest rates from 6% to 12%
✅ Available online for easy access
✅ Tax saving and peace of mind
