Yuva Credit Life Plan 877
LIC Yuva Credit Life Plan 877- LIC has introduced a Term Insurance Plan that safeguards the insured’s family against loan repayments by covering loan liabilities such as housing, education, and automobiles, among other things.
Introduction – Why India’s Youth Need Loan Protection
In today’s India, youth are financially ambitious. They take education loans, home loans, car loans, startup loans, and even personal loans to achieve their dreams early.
But what if something unexpected happens before the loan is repaid? The burden falls on parents or family members. To solve this problem, LIC launched the Yuva Credit Life Plan 877 – a loan protection insurance plan designed specifically for young borrowers.
This plan ensures that if the insured borrower passes away during the policy term, the outstanding loan gets repaid by LIC. Families don’t have to bear the financial burden.
What is LIC Yuva Credit Life Plan 877?
LIC Yuva Credit Life (Plan 877) is a credit-linked group term insurance policy targeted at young borrowers. It covers loans such as:
- Education Loans
- Home Loans
- Car Loans
- Startup Loans
- Personal Loans
The insurance cover reduces every year in proportion to the loan outstanding. So, as the loan reduces, the coverage also decreases.
This makes it affordable and practical because premiums are lower compared to regular term insurance.
Key Features of LIC Yuva Credit Life Plan 877
| Feature | Details |
|---|---|
| Plan Type | Credit-Linked Term Insurance (Loan Protection) |
| Plan Number | 877 |
| Entry Age | 18 to 50 years |
| Maximum Maturity Age | 65 years |
| Policy Term | Linked to Loan Tenure (5 to 30 years) |
| Minimum Sum Assured | ₹50,000 |
| Maximum Sum Assured | ₹25 Crores (depending on loan) |
| Premium Payment | Single / Regular (as per loan repayment mode) |
| Death Benefit | Outstanding Loan Amount (or Sum Assured) |
| Maturity Benefit | Nil (no survival benefit) |
| Loans Covered | Housing, Vehicle, Education, Personal, Business Loans |
| Tax Benefits | 80C (Premium), 10(10D) (Death Benefit) |
Why LIC Yuva Credit Life 877 is Different from Regular Term Plans
- Regular term plans → Fixed sum assured throughout the term.
- Yuva Credit Life Plan → Coverage decreases as loan reduces.
- Benefit: Lower premium & exact protection against loan liability.
Benefits of LIC Yuva Credit Life Plan 877
1. Loan Protection for Family
Ensures family doesn’t face loan repayment burden in case of borrower’s death.
2. Affordable Premiums
Since coverage reduces with outstanding loan, premiums are cheaper.
3. Wide Loan Coverage
Can cover multiple loans like home, education, car, startup, or business.
4. Flexible Premium Payment
Choose single premium (one-time) or regular premium (linked to EMI mode).
5. Tax Benefits
Premium qualifies under 80C, and death benefits are tax-free.
How LIC Yuva Credit Life Plan Works?
Let’s understand with an example:
- Ramesh (Age 28) takes a ₹30 Lakh Home Loan for 20 years.
- He buys LIC Yuva Credit Life 877.
- Coverage = Loan Outstanding.
If Ramesh dies in year 7, and the loan outstanding is ₹24 Lakhs, LIC pays the bank ₹24 Lakhs. Family is debt-free.
If Ramesh survives full 20 years, the policy ends with no maturity benefit.
Premium Illustration (Tabular Data)
Case 1: ₹20 Lakh Home Loan, 15-Year Tenure
| Year | Loan Outstanding | Death Cover (Sum Assured) | Premium (Annual – Approx) |
|---|---|---|---|
| 1 | ₹20,00,000 | ₹20,00,000 | ₹3,200 |
| 5 | ₹16,00,000 | ₹16,00,000 | – |
| 10 | ₹10,00,000 | ₹10,00,000 | – |
| 15 | ₹0 (Loan Over) | Policy Ends | – |
Case 2: ₹10 Lakh Education Loan, 7-Year Tenure
| Year | Loan Outstanding | Death Cover | Premium (Single Payment Option) |
|---|---|---|---|
| 1 | ₹10,00,000 | ₹10,00,000 | ₹6,800 (one-time) |
| 4 | ₹6,00,000 | ₹6,00,000 | – |
| 7 | ₹0 | Nil | – |
Real-Life Investor Scenarios
Scenario 1: Education Loan Protection
- Priya (Age 22) takes a ₹12 Lakh education loan for MBA (7 years).
- She buys Yuva Credit Life 877.
- If Priya dies in year 3 (loan outstanding ₹9 Lakhs), LIC clears the loan.
- Parents don’t bear repayment burden.
Scenario 2: Young Professional’s Home Loan
- Rahul (Age 29) takes a ₹50 Lakh home loan for 20 years.
- Premium ~₹8,000 per year.
- In year 12, Rahul dies → Loan outstanding ₹32 Lakhs.
- LIC pays ₹32 Lakhs to the bank. Family keeps the house, debt-free.
Scenario 3: Entrepreneur Startup Loan
- A startup founder (Age 30) takes ₹25 Lakhs business loan for 10 years.
- If he dies in year 6 with outstanding ₹14 Lakhs → LIC pays full ₹14 Lakhs.
- Family isn’t forced to sell assets to repay debt.
Analyst Opinions
- Insurance Analysts: “LIC Yuva Credit Life 877 is a smart plan for today’s debt-heavy youth. It directly addresses loan liability, which is the biggest risk for middle-class families.”
- Financial Planners: “It’s not an investment, but a risk cover. Pair it with a separate term plan for family income protection.”
- Banking Experts: “Banks often sell costly credit protection policies. LIC’s Yuva Credit Life offers trusted cover at lower cost.”
Yuva Credit Life 877 vs Regular Term Plan vs ROP Plan
| Feature | Yuva Credit Life 877 | LIC Yuva Term 875 | LIC Jeevan Kiran 870 (ROP) |
|---|---|---|---|
| Sum Assured | Decreasing (Loan-Linked) | Fixed | Fixed |
| Premium | Lowest | Low | Higher |
| Maturity Value | Nil | Nil | Return of Premium |
| Best Use | Loan Protection | Income Replacement | Investment + Cover |
Advantages & Disadvantages
Advantages ✅
- Low-cost loan protection.
- Flexible premium payment options.
- Wide loan coverage.
- Peace of mind for borrower’s family.
Disadvantages ❌
- No maturity benefit.
- Coverage reduces over time.
- Not a replacement for standard term insurance.
Investor Insights & Planning Tips
- Always buy Yuva Credit Life 877 when taking loans.
- Don’t depend only on this plan → also take a separate term plan for family.
- Choose single premium if you prefer one-time payment with loan sanction.
- Calculate coverage exactly equal to loan outstanding.
FAQs on LIC Yuva Credit Life 877
Q1. Who can buy this plan?
👉 Any borrower (18–50 years) with an education, home, vehicle, business, or personal loan.
Q2. Does coverage equal EMI?
👉 No, it equals loan outstanding balance.
Q3. Can I buy it directly from LIC?
👉 Usually offered via banks/NBFCs with LIC tie-up at loan sanction time.
Q4. What if I prepay my loan early?
👉 Policy ends when loan ends; no refund of premium.
Q5. Is it mandatory?
👉 Not mandatory, but highly recommended.
Q6. Can I take both Yuva Credit Life 877 & Yuva Term 875?
👉 Yes, one for loan protection and one for family income protection.
Final Verdict – Should You Buy LIC Yuva Credit Life Plan 877?
If you are a young borrower with education, home, or business loans, then LIC Yuva Credit Life 877 is a must-have insurance plan.
- It directly clears your loan in case of death.
- Protects family from EMI burden.
- Very affordable compared to regular insurance.
👉 However, also buy a separate term plan (like LIC Yuva Term 875) to secure your family’s future income needs beyond loan liabilities.
