LIC had launched single premium life insurance plan – LIC Jeevan Vriddhi, which has death benefit of 5 times the single premium. With the new rules on Life Insurance in Budget 2012, the minimum death benefit should be at least 10 times the annual premium paid. This rule is however effective from April 1, 2012. So you would get the full benefit of tax exemption u/s 80C of income tax only till March 31, 2012 if you invest in this plan.
What would happen after April 1, 2012?
If you invest in LIC Jeevan Vriddhi after April 1, 2012 you would be only able to claim 50% of premium paid as tax exemption.
This is how it works. Say you invest Rs. 1 Lakh as premium. You would get Rs 5 Lakh as death benefit. Now the new rule says the tax exemption is only up to 10% of death benefit, which in this case comes out to be Rs. 50,000 [ 10% of 5 lakh]. So this is the sum you would be able to claim as tax exemption u/s 80C.
You can read the review of Jeevan Vriddhi here.
LIC has stated the same in the new advertisement today.