LIC Yuva Credit Life Plan 877

Life Insurance Corporation of India (LIC) has introduced the Yuva Credit Life Plan 877, a term insurance plan designed especially for young individuals who want to protect their family from financial risks related to loans. This article explains the key features, benefits, and how to use the LIC Yuva Credit Life Plan 877 calculator effectively, in easy-to-understand language.

What is LIC Yuva Credit Life Plan 877?

The LIC Yuva Credit Life Plan 877 is a non-participating, non-linked, pure risk term insurance plan. This means it provides pure life cover without any profit participation or market-linked returns. The plan was launched on August 6, 2024, and targets borrowers aged 18 to 45 years to secure loan repayments in the event of the policyholder’s untimely death during the policy term.

It provides financial protection by paying the outstanding loan amount to the family, enabling them to clear debt without financial strain.

This plan is especially useful for young working individuals with loans, such as education loans, personal loans, housing loans, or any other debt, ensuring their family is not burdened with repayment after their demise.

Key Features of LIC Yuva Credit Life Plan 877

• Pure Risk Cover with Decreasing Sum Assured
  The sum assured decreases over the policy term, aligning with the reducing loan balance as it gets repaid over time.
• Flexible Premium Payment Options
  Choose between Single Premium (pay once at policy start) or Limited Premium (pay over 5, 10, or 15 years).
• Custom Interest Rate Selection
  You can select interest rates ranging from 6% to 12% to calculate the reducing sum assured, irrespective of your actual loan interest rate.
• High Sum Assured Rebate
  Attractive discounts are available on premiums for higher coverage amounts.
• Special Rates for Women
  Preferential premium rates are offered for female policyholders.
• Non-Smoker Discounts
  Reduced premiums for non-smokers verified through urinary cotinine tests.
• Loan Protection and Financial Security
  Ensures the family’s loan liability is cleared, providing peace of mind.
• No Maturity Benefit
  Pure risk cover plans do not pay maturity benefits, as they only pay on the unfortunate event of death.
• Grace Period & Policy Revival
  A 30-day grace period for premium payment and policy revival is allowed within 5 years of the first unpaid premium.

Eligibility Criteria

How Does LIC Yuva Credit Life Plan 877 Work?

The plan works by linking the insurance amount to the outstanding loan balance. Let’s say someone takes a loan of Rs. 50 Lakhs and opts for this plan with a policy term matching the loan tenure. If the policyholder unfortunately passes away during the policy term, the plan pays the outstanding loan amount as the death benefit to the family so they can repay the loan without added stress.

The sum assured decreases every year based on the equated yearly repayment schedule using the selected interest rate. This decreasing sum assured means the insurance coverage aligns with the loan balance reduction over time.

Example:

Mr. Shyam, aged 30, takes a loan of Rs. 50 Lakhs and buys LIC Yuva Credit Life Plan 877 for a 10-year term with a 8% interest rate selected for the reducing cover calculation. Each year, the sum assured decreases following the loan repayment schedule. If Mr. Shyam passes away in year 4, the family will receive the sum assured based on the outstanding loan amount at that time to clear the loan.

Benefits of the Plan

• Loan Repayment Security: Protects your family from loan burdens.
• Affordable Premiums: Competitive premiums with rebates for higher sums assured.
• Flexible Premium Payment: Choose what suits your financial situation.
• Tax Benefits: Premiums paid are eligible for tax deductions under Section 80C, and death benefits are tax-free under Section 10(10D) of the Income Tax Act.
• No Medical Tests for Small Loans: Depending on the loan amount, medical underwriting may be simplified or waived.
• Easy Policy Management: Single or limited premium payment options simplify finances.

Using the LIC Yuva Credit Life Plan 877 Calculator

The LIC Yuva Credit Life Plan 877 calculator helps estimate the premium amount payable based on your inputs such as age, gender, sum assured, policy term, and premium payment option. Here is a simple step-by-step guide:

1. Enter Your Age
   Your age should be between 18 and 45 years.
2. Select Gender
   Women may receive special premium rates.
3. Enter Basic Sum Assured
   This should match or exceed your loan amount.
4. Choose Policy Term
   Typically set according to your loan tenure (5 to 30 years).
5. Select Premium Payment Option
   Choose either a single premium or pay over limited years (5, 10, 15).
6. Enter Interest Rate
   Pick a rate from 6% to 12% to calculate decreasing coverage.
7. Calculate Premium
   The calculator will show an estimated annual, half-yearly, or quarterly premium based on your inputs.

Using this calculator online or through LIC agents helps you plan your finances with clarity and get exact premium amounts to pay.

Important Considerations When Choosing the Plan

• This policy does not pay any maturity benefit or survival benefit because it is pure risk insurance.
• Ensure the policy term matches your loan repayment period.
• Since the sum assured decreases, it is designed specifically for loan protection and not for wealth creation.
• Premiums vary based on age, sum assured, term, and tobacco use.
• Always buy through licensed LIC agents or official portals for authenticity.

How to Buy LIC Yuva Credit Life Plan 877

• Approach LIC official agents or visit their website, LICIndia.in, to apply.
• Fill out the proposal form with accurate personal and loan details.
• Choose the premium paying option and sum assured based on your loan.
• Pay the premium either as a lump sum or in limited installments.
• Get policy documents and a risk cover schedule explaining decreasing coverage.

Frequently Asked Questions

Conclusion

The LIC Yuva Credit Life Plan 877 is an excellent, easy-to-understand insurance solution for young borrowers seeking to protect their family from the financial impact of outstanding loans in case of death. Its pure risk cover and decreasing sum assured make it a perfect fit for loan protection. Using the LIC Yuva Credit Life Plan 877 calculator gives you a clear understanding of premium liabilities and helps you plan smartly.