In the event of your untimely death, LIC Yuva Credit Life makes sure that your debt won’t become a burden on your family, regardless of whether you took out a loan for small business, education, a car, or home improvements.
LIC Yuva Credit Life Plan 877
Plan No. 877 (UIN: 512N357V01) – Secure Your Loan Liabilities
Why LIC Yuva Credit Life?
Debt Protection, Peace of Mind
In the event that the policyholder passes away while it is in effect, LIC will pay a Death Benefit equal to the higher of
- 105% of total premiums paid up to death, or
- The Sum Assured on Death as per the policy schedule
(Under single-premium policies, it is simply the absolute amount assured)
No maturity benefit is payable.
No surrender benefit is available — it is a pure risk cover.
Affordable Premiums
The low premiums are intended to be in line with the term and amount of your loan. Your schedule will clearly outline the method, duration, and amount of your premium payments.
Fast Claims Processing
- Death claims (without investigation): settled in 15 days
- Cases requiring investigation: decision and payment within 45 days
Policy Servicing & Support
- Policy document corrections, address modifications, and nomination updates: 7-day turnaround
- Within seven days of receiving the policy, you can cancel your free look or get a refund.
- LIC acknowledges complaints right away and responds with a decision or next steps within 14 days.
Who Can Buy It?
- Young borrowers with an active loan
- Ages as specified in the policy document (check your loan terms)
- The policy must remain in force and premiums paid — otherwise it lapses
Sample Scenario
Let’s say 28-year-old Ravi in Delhi takes out a personal loan of ₹5,00,000 that he must pay back over five years. For the duration of his loan, he chooses to purchase a LIC Yuva Credit Life policy.
- He pays a modest annual premium (let’s assume ₹3,500 per year for illustration).
- After 2 years, he has paid ₹7,000 total premiums.
- If Ravi unfortunately passes away in the third year, the death benefit will be the higher of:
• 105% of ₹7,000 = ₹7,350
• The sum assured as per schedule (say, ₹4,50,000 for that year)
In this instance, LIC will settle the loan (or beneficiary) with ₹4,50,000. His family doesn’t have any debt.
The borrower and the family feel much safer and more at ease as a result.
Key Features At a Glance
| Feature | Benefit |
|---|---|
| Pure risk cover | No maturity payout, so premiums are lower |
| Death underwriting | Benefit covers your outstanding loan burden |
| Quick claims | 15 days (or 45 days if investigations) |
| Service turnaround | 7 days for changes/corrections |
| No surrender value | You cannot cash out; it’s focused coverage |
Expert Opinions & Industry Insight
“Credit life insurance is a powerful but often overlooked tool — it ensures that a borrower’s untimely death doesn’t become a financial crisis for the family.”
— Dr. A. Iyer, Insurance Industry Analyst
More than 30% of Indian borrowers say they worry about burdening their families in the event of their death, per recent industry data. The adoption of credit life insurance is still low in the microfinance and small-loan sectors. However, by making coverage straightforward, transparent, and closely linked to loan obligations, well-structured products like LIC Yuva can alter that.
Directly linking insurance coverage to credit can also lower defaults resulting from family hardship in states like Uttar Pradesh and Bihar, where informal borrowing is prevalent. This benefits both lenders and borrowers.
Frequently Asked Questions (FAQs)
You have two options:
• You can surrender the insurance cover; or
• You can continue the policy until the original policy term ends.
No. Since it is a pure risk cover, there is no maturity benefit.
No. There is no surrender value. Only the “unexpired risk premium” may be payable in some cases.
If the insured commits suicide within 12 months of policy commencement (or revival), the nominee is entitled to 80% of premiums paid (excluding taxes).
There is a grace period of 30 days. If not paid within that, the policy lapses.
Without investigation: 15 days
With investigation: decision/payment within 45 days
Yes — LIC processes changes or corrections in 7 days.