Life Insurance Corporation of India has launched a limited-offer single-premium policy which promises to nearly double the premium amount at the end of 10 years. The policy, which works like a bond, also provides life insurance of up to five times the premium paid. 

Similar policies offered have been a huge hit with policyholders in the past and the corporation raised over Rs 10,000 crore each time it launched such a scheme. The new plan, 'Jeevan Vriddhi', will be available only for the next six months. Given that it yields a tax-free return of 7.65% and there is no upper ceiling on the investment, the plan is likely to be a hit among high net worth individuals. 

The minimum age for the plan is 8 years (completed) while the maximum is 50 years. The term under the policy is fixed at 10 years. The minimum sum assured is Rs. 1.50 lakh while there is no upper limit. The minimum premium under the policy is Rs 30,000 and shall increase in multiples of Rs 1,000. A 35-year old who pays a one-time premium of Rs 1,00,000 will get insurance cover for Rs 5 lakh and a guaranteed return of Rs 1,97,023 after 10 years. LIC has said that depending on the performance of the fund, the corporation will provide an additional loyalty addition on maturity. This loyalty addition could go up to Rs 24,648. 

In the past, LIC had come out with similar instruments at times when interest rates were high and there was uncertainty in the equity markets. This helped the corporation to take advantage of investor concern and deploy funds in high yielding fixed income instruments such as government securities, which are currently yielding around 8.2% for 10-years. While the yield on government bonds is higher than Jeevan Vriddhi, income on G-secs is taxable. (Times of India)