Life Insurance Corporation of India (LIC) stands as a beacon of trust for millions of policyholders across the country. Whether you’re a long-term policyholder or new to LIC policies, understanding the process of claiming maturity benefits is crucial. This article provides a detailed guide on LIC maturity claims, covering every aspect to ensure you make the most of your policy.
What is an LIC Maturity Claim?
An LIC maturity claim arises when a life insurance policy reaches its term, and the insured is entitled to receive the policy’s sum assured along with any accrued bonuses. This payout represents the culmination of the policyholder’s consistent investment in their LIC plan.
Eligibility for LIC Maturity Claim
To qualify for a maturity claim, you must meet the following conditions:
- The policy must have completed its full term.
- All premiums must be paid without lapses.
- The policyholder must survive until the end of the policy term.
Documents Required for LIC Maturity Claim
To process your maturity claim, you will need to submit the following documents:
- Original Policy Document: This serves as proof of your policy ownership.
- Maturity Discharge Form (Form No. 3825): Duly filled and signed.
- Identity Proof: Aadhaar card, PAN card, passport, or voter ID.
- Bank Account Details: Cancelled cheque or passbook copy for direct credit of the maturity amount.
- Proof of Survival (if required): A survival certificate may be needed in specific cases.
- KYC Documents: Address proof and PAN card for compliance purposes.
Steps to File an LIC Maturity Claim
1. Receive the Intimation Letter
A few weeks before the policy term ends, LIC sends an intimation letter to the policyholder. This letter outlines the necessary steps and documents required to claim the maturity amount.
2. Gather Necessary Documents
Prepare all the documents listed above. Ensure that the information in these documents matches the details in the policy.
3. Fill Out the Maturity Discharge Form
The discharge form (Form No. 3825) is essential for processing your claim. Fill it out carefully, double-checking all details to avoid delays.
4. Submit Documents to LIC Branch
Visit the LIC branch where the policy was issued and submit the required documents. Ensure you obtain an acknowledgment receipt for your submission.
5. Wait for Processing
LIC verifies the submitted documents and processes the maturity claim. This usually takes 7–15 working days.
6. Receive Payment
Once processed, the maturity amount is directly credited to your bank account or sent via cheque, as per your preference.
Bonuses on LIC Policies
One of the key benefits of LIC policies is the bonuses they accrue over time. These bonuses significantly increase the maturity amount and include:
- Simple Reversionary Bonus: Declared annually and added to the policy sum.
- Final Additional Bonus (FAB): Paid at the end of the policy term for long-term policies.
- Loyalty Bonus: Offered to policyholders who have consistently maintained their policy.
Common Challenges and How to Overcome Them
1. Missing Documents
If you’ve misplaced the original policy document, file a loss of policy bond application along with an indemnity bond.
2. Name Mismatch
Ensure your name on the policy matches your identity proof. Rectify any discrepancies by submitting a name correction form.
3. Delayed Submission
Always initiate the claim process well before the policy term ends. Late submission may lead to additional formalities.
Tax Implications on LIC Maturity Proceeds
Under Section 10(10D) of the Income Tax Act, the maturity proceeds of an LIC policy are generally tax-free if:
- The annual premium does not exceed 10% of the sum assured.
- The policyholder has complied with all conditions during the policy term.
However, policies issued after April 1, 2023, may have certain taxable components based on amendments in tax laws.
Tips to Maximize LIC Maturity Benefits
- Choose Policies with High Bonuses: Opt for policies like Jeevan Anand or Jeevan Labh that offer attractive bonuses.
- Pay Premiums On Time: Avoid lapses to ensure eligibility for full benefits.
- Plan for the Maturity Amount: Use the proceeds wisely, such as investing in mutual funds, fixed deposits, or other financial instruments.
- Understand Riders: Riders like critical illness or accidental death benefits may enhance the payout.
FAQs About LIC Maturity Claims
1. How long does it take to receive the maturity amount?
The maturity amount is typically credited within 7–15 working days after document submission.
2. Can I claim maturity benefits online?
Currently, LIC does not allow online processing of maturity claims. You must visit the branch to complete the process.
3. What happens if I miss claiming the maturity amount?
LIC holds the maturity amount indefinitely. However, it’s advisable to claim it promptly to avoid complications.
4. Is TDS deducted from the maturity amount?
TDS is deducted if the maturity proceeds are taxable under the Income Tax Act.
5. Can a nominee claim the maturity amount?
No, only the policyholder can claim the maturity amount unless the policyholder is deceased. In such cases, the nominee can file a death claim.