Category Archives: Life Insurance

Life insurance in India made its debut well over 100 years ago.

In our country, which is one of the most populated in the world, the prominence of insurance is not as widely understood, as it ought to be. What follows is an attempt to acquaint readers with some of the concepts of life insurance, with special reference to LIC.

It should, however, be clearly understood that the following content is by no means an exhaustive description of the terms and conditions of an LIC policy or its benefits or privileges.

For more details, please contact our branch or divisional office. Any LIC Agent will be glad to help you choose the life insurance plan to meet your needs and render policy servicing.

What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:

• The date of maturity, or
• Specified dates at periodic intervals, or
• Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates ‘risk’, substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
By and large, life insurance is civilisation’s partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person:

1. That of dying prematurely leaving a dependent family to fend for itself.
2. That of living till old age without visible means of support.

Life Insurance Vs. Other Savings

Contract Of Insurance:
A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance.

At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void.

Protection:
Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.

Plan :Amulya Jeevan(823)

Product Summary :
LIC Amulya Jeevan 2 plan number 823 is a regular premium paying conventional without profit pure protection plan.

Premium Payment Mode:
Yearly, Halfly

Term :
5 to 35 Years

Minimum Entry Age :
18 Years (Completed)

Maximum Entry Age :
60 Years (Nearest Birthday)

Minimum Sum Assured :
25,00,000

Maximum Sum Assured :
NO LIMIT

Policy Benefits :

On Death :
On death of the Life Assured during the policy term Sum Assured shall be payable.

On Survival :
On survival to the end of the policy term,no benefits shall be payable.

Surrendered Value :
No surrender value will be available under this plan.

Loan :
No loan will be granted under this plan.

Income Tax Benefit :
• Premium paid under this plan is eligible for TAX rebate under section 80c.

Plan :Jeevan Tarun(834)

Product Summary :
LIC’s Jeevan Tarun Plan is non-linked, with-profits, Limited premium payment plan specially designed to meet the educational and other needs of growing children.

Premium Payment Mode:
Yearly, Halfly, Quarterly, Monthly(ECS)

Term :
25 Age at Maturity Time
[25-Age at entry]Years

P.P.T.
[20-Age at entry]Years

Minimum Entry Age :
0 Year Last Birthday

Maximum Entry Age :
12 Year Last Birthday

Minimum Sum Assured :
75,000

Maximum Sum Assured :
NO LIMIT (Depending upon Income)

Policy Benefits :

On Death :
On death Before the Date of Commencement of Risk:
An amount equal to the total amount of premium’s paid excluding taxes, extra premium and rider premium, if any shall be payable.

On death After the Date of Commencement of Risk:
Death Benefit, defined as sum of “Sum Assured on Death” and vested Simple Reversionary Bonuses and Final Additional Bonus, if any, shall be payable.
Where “Sum Assured on Death” is defined as higher of 10 times of annualized premium or Absolute amount assured to be paid on death i.e. 125% of Sum Assured
This death benefit shall not be less than 105% of the total premiums paid as on date of death.

On Survival :
Option is chosen at proposal stage.

Option-1: No Survival,Maturity Benifit 100% S.A.

Option-2: 5% S.A. every year For 5 Years from age 20 to 24,Maturity Benifit 75% S.A.

Option-3: 10% S.A. every year For 5 Years from age 20 to 24,Maturity Benifit 50% S.A.

Option-4: 15% S.A. every year For 5 Years from age 20 to 24,Maturity Benifit 25% S.A.

Surrendered Value :
The policy can be surrendered at any time during the policy term provided premiums have been paid for full three years.

Loan :
Loan facility is available under this plan after the payment of premiums for atleast three full years.

Income Tax Benefit :
• Premium paid under this plan is eligible for TAX rebate under section 80c.
• Maturity under this plan is free under sec 10(10D).

Plan :New Children’s Money Back (832)

Product Summary :
LIC’s New Children’s Money Back Plan is a non-linked, with-profits, regular premium payment money back plan

Premium Payment Mode:
Yearly, Halfly, Quarterly, Monthly(ECS)

Term :
25 Age at Maturity Time

Minimum Entry Age :
0 Year Last Birthday

Maximum Entry Age :
12 Year Last Birthday

Minimum Sum Assured :
1,00,000

Maximum Sum Assured :
NO LIMIT (Depending upon Income)

Policy Benefits :

On Death :
On death Before the Date of Commencement of Risk:
An amount equal to the total amount of premium’s paid excluding taxes, extra premium and rider premium, if any shall be payable.

On death After the Date of Commencement of Risk:
Death Benefit, defined as sum of “Sum Assured on Death” and vested Simple Reversionary Bonuses and Final Additional Bonus, if any, shall be payable. Where “Sum Assured on Death” is defined as higher of 10 times of annualized premium or Absolute amount assured to be paid on death i.e. Basic Sum assured. This death benefit shall not be less than 105% of the total premiums paid as on date of death.

On Survival :
If Policy in full force :
Completion Age 18YRS – 20% OF MSA
Completion Age 20YRS – 20% OF MSA
Completion Age 22YRS – 20% OF MSA

On Maturity at Age 25YRS – 40% of MSA + Vested Bonus + FAB

Surrendered Value :
The policy can be surrendered at any time during the policy term provided premiums have been paid for full three years.

Loan :
Loan facility is available under this plan after the payment of premiums for atleast three full years.

Income Tax Benefit :
• Premium paid under this plan is eligible for TAX rebate under section 80c.
• Maturity under this plan is free under sec 10(10D).

Plan :Money Back 25Year(821)

Product Summary :
This is a limited premium payment, non-linked, with profits Money Back Plan.

Premium Payment Mode:
Yearly, Halfly, Quarterly, Monthly(ECS)

Term :
25 Year

P.P.T.
20 Year

Minimum Entry Age :
13yr Completed

Maximum Entry Age :
45 Year (Nearest Birthday)

Maximum Maturity Age :
70 Year

Minimum Sum Assured :
1,00,000

Maximum Sum Assured :
NO LIMIT (Depending upon Income)

Maximum Accidental Death and Disability Benefit Rider up to age 70.

Policy Benefits :

On Death :
Sum Assured on Death + Vested Bonus + FAB if any.
Sum Assured on Death = Higher of 125% of Basic SA or 10 times of annualized Premium.
Death Benefit shall not be less than 105% of total premiums paid as on date of death.
The premiums exclude taxes, extra premium and rider premiums.

On Survival :
15% of Basic SA is payable after 5th, 10th, 15th & 20th year of policy.
Maturity Time 40% of Basic Sum Assured + Vested Bonus + FAB if any.

Surrendered Value :
The policy can be surrendered for cash provided atleast three full years premiums have been paid.The Guaranteed Surrender value during policy term shall be a percentage of total premiums paid (net of service tax)excluding extra premiums and premiums for riders, if opted for. This percentage will depend on the policy term and policy year in which the policy is surrendered

Loan :
Available after payment of premium of 3 full years.

Income Tax Benefit :
• Premium paid under this plan is eligible for TAX rebate under section 80c.
• Maturity under this plan is free under sec 10(10D).

Plan :Bima Bachat(816)

Product Summary :
LIC Bima Bachat (816) Plan is a single premium, non-linked, with profits Money Back type Plan.

Premium Payment Mode:
Single Premium

Term :
9 Year
12 Year
15 Year

Minimum Entry Age :
15 Year Completed

Maximum Entry Age :
Term 9yr then 66yr (Nearest Birthday)
Term 12yr then 63yr (Nearest Birthday)
Term 15yr then 60yr (Nearest Birthday)

Maximum Maturity Age :
75 Year

Minimum Sum Assured :
Term 9yr then 35,000
Term 12yr then 50,000
Term 15yr then 70,000

Maximum Sum Assured :
NO LIMIT (Depending upon Income)

Policy Benefits :

On Death :
During 1st five years policy years : Sum Assured only.
After completion of five policy years : Sum Assured + Loyalty Addition, if any.

On Survival :
For Policy Term of 9 years : 15% of SA, after 3rd & 6th policy year.
For Policy Term of 12 years : 15% of SA, after 3rd ,6th & 9th policy year.
For Policy Term of 15 years : 15% of SA, after 3rd ,6th,9th & 12th policy year.

At Maturity Time :
Single Premium Paid + Loyalty Additions, if any.

Surrendered Value :
The policy can be surrendered at any time during the policy term subject to realization of the premium cheque.
Guaranteed Surrender Value :
First year: 70% of the Single Premium excluding taxes and extra premium,if any.
Thereafter: 90%of the Single Premium excluding taxes, extra premium, if any and all survival benefits paid earlier.

Loan :
Loan facility is available under this plan at any time after completion of one policy year.

Income Tax Benefit :
• Premium paid under this plan is eligible for TAX rebate under section 80c.

Plan :Money Back 20Year(820)

Product Summary :
This is a limited premium payment, non-linked, with profits Money Back Plan.

Premium Payment Mode:
Yearly, Halfly, Quarterly, Monthly(ECS)

Term :
20 Year

P.P.T.
15 Year

Minimum Entry Age :
13yr Completed

Maximum Entry Age :
50yr (Nearest Birthday)

Maximum Maturity Age :
70 Year

Minimum Sum Assured :
1,00,000

Maximum Sum Assured :
NO LIMIT (Depending upon Income)

Maximum Accidental Death and Disability Benefit Rider up to age 70.

Policy Benefits :

On Death :
Sum Assured on Death + Vested Bonus + FAB if any.
Sum Assured on Death = Higher of 125% of Basic SA or 10 times of annualized Premium.
Death Benefit shall not be less than 105% of total premiums paid as on date of death.
The premiums exclude taxes, extra premium and rider premiums.

On Survival :
20% of Basic SA is payable after 5th, 10th and 15th year of policy.
Maturity Time 40% of Basic Sum Assured + Vested Bonus + FAB if any.

Surrendered Value :
The policy can be surrendered for cash provided atleast three full years premiums have been paid.The Guaranteed Surrender value during policy term shall be a percentage of total premiums paid (net of service tax)excluding extra premiums and premiums for riders, if opted for. This percentage will depend on the policy term and policy year in which the policy is surrendered

Loan :
Available after payment of premium of 3 full years.

Income Tax Benefit :
• Premium paid under this plan is eligible for TAX rebate under section 80c.
• Maturity under this plan is free under sec 10(10D).

Plan : New Endowment Plus(835)

Product Summary :
LIC’s New Endowment Plus is a unit linked assurance plan, which offers investment-cum-insurance during the term of the policy. The Policyholder can choose the amount of premium he/she desires to pay, depending on which Policyholder will get the equivalent level of cover. Each premium paid by the Policyholder shall be subject to Premium Allocation charge as per rule. The allocated premium will be utilized to purchase units as per the selected fund type. The Policyholder’s Fund Value will be subject to deduction of charges as per rule. Units will be allotted and cancelled based on the Net Asset Value (NAV) of the respective fund applicable to the date of allotment / cancellation. The NAV will be computed on daily basis and will be based on the investment performance and Fund Management Charges (FMC) of each fund type.

Investment Fund Type:
Bond, Secured, Balanced, and Growth Fund

1. Bond Fund:
Investment in Government : Not less than 60%
Short-term Investment : Not more than 40%
Investment in listed equity shares : NIL
Fund for risk/return : Low risk
SFIN No.: ULIF001201114LICNED+BND512

2. Secured Fund:
Investment in Government : Not less than 45%
Short-term Investment : Not more than 40%
Investment in listed equity shares : Not less than 15% & Not more than 55%
Fund for risk/return : Steady Income – Low to Medium risk
SFIN No.: ULIF002201114LICNED+SEC512

3. Balanced Fund:
Investment in Government : Not less than 30%
Short-term Investment : Not more than 40%
Investment in listed equity shares : Not less than 30% & Not more than 70%
Fund for risk/return : Balanced Income and Growth – Medium risk
SFIN No.: ULIF003201114LICNED+BAL512

4. Growth Fund:
Investment in Government : Not less than 20%
Short-term Investment : Not more than 40%
Investment in listed equity shares : Not less than 40% & Not more than 80%
Fund for risk/return : Long term Capital growth – High risk
SFIN No.: ULIF004201114LICNED+GRW512

Basic Sum Assured is (10 * Annualized Premium) or (105% of total premiums paid), whichever is higher.

Risk Cover:
If age at entry is less than 8 years the risk will commence one day before the completion of 2 years from DOC or at policy anniversary following completion of 8 years of age, Whichever is earlier.
In case the age as entry is 8 years or more, Risk will commence immediately.

Premium Payment Mode:
Yearly, Halfly, Quarterly, Monthly

Term :
10 to 20 Years

P.P.T.
Same as Policy Term

Minimum Entry Age :
90Days

Maximum Entry Age :
50Years NBD

Minimum Maturity Age :
18Years Completed

Maximum Maturity Age :
60 Years NBD.

Minimum Sum Assured :
YLY  : 20,000
HLY : 13,000
QLY : 8000
ECS : 3000

Maximum Sum Assured :
No Limit

Accidental Benefit Rider Available.

Policy Benefits :
On Death :
On death before the Date of Commencement of Risk:
An amount equal to the Policyholder’s Fund Value shall be payable.

On death after the Date of Commencement of Risk:
An amount equal to the higher of Basic Sum Assured or Policyholder’s Fund Value shall be payable. Where, Basic Sum Assured is (10 * Annualized Premium) or (105% of the total premiums paid), whichever is higher.

On Survival :
Fund Value at the time of maturity.

Surrendered Value :
Policy can be surrender after 5 years.

Partial Withdrawals after  5 years. Life Assured must be major.

Loan :
Not available.

Income Tax Benefit :
80C Rebate up to Rs 1,50,000 & Maturity & Death Claim Amount 100%Tax Free