Insurance Topic

LIC’s Jeevan Umang is a Par, Non-Linked, Life, Individual, Savings, Whole Life Insurance plan which offers a combination of income and protection to your family. This plan provides for annual survival benefits from the end of the premium paying term till maturity and a lump sum payment at the time of maturity or on death of the policyholder during the policy term. This Plan can be purchased Offline through Licensed Agents, corporate Agents, Brokers and Insurance Marketing Firms. Key Features: • Whole life insurance with limited premium payment • Annual Survival benefit equal to 8% of Basic Sum Assured from the end of the premium paying term till the Life assured survives or till the policy anniversary prior to the date of maturity, whichever is earlier. • Lump sum payment at the time of maturity or on death of the policyholder during the policy term • Flexibility to - Choose the premium payment term. - Option for payment of death benefit in instalments. • Option to enhance coverage by opting for Rider Benefits on payment of additional premium for the rider benefits. • Benefit of attractive High Sum Assured Rebate. • Takes care of liquidity needs through loan facility. 1. ELIGIBILITY CONDITIONS AND OTHER RESTRICTION a) Minimum Basic Sum Assured : Rs. 2,00,000 b) Maximum Basic Sum Assured : No limit The Basic Sum Assured shall be in multiples of amounts specified below: Basic Sum Assured Range Sum Assured multiple From Rs. 2,00,000 to Rs. 4,50,000 Rs. 25000/- Above Rs. 4,50,000 to Rs.9,00,000 Rs.50,000/- Above Rs. 9,00,000 Rs. 1,00,000/- c) Premium Paying Term : 15, 20, 25 and 30 years d) Policy Term : (100 – age at entry) years e) Minimum Age at entry : 30 days (completed) f) Maximum Age at entry : 55 years (nearer birthday) for PPT = 15 years 50 years (nearer birthday) for PPT = 20 years 45 years (nearer birthday) for PPT = 25 years 40 years (nearer birthday) for PPT = 30 years g) Minimum Age at the end of premium paying term : 18 years (completed) h) Maximum Age at the end of premium paying term : 70 years (nearer birthday) i) Age at maturity : 100 years (nearer birthday) Date of commencement of risk: In case the age at entry of the Life Assured is less than 8 years, the risk under this plan will commence either one day before the completion of 2 years from the date of commencement of policy or one day before the policy anniversary coinciding with or immediately following the completion of 8 years of age, whichever is earlier. For those aged 8 years or more, risk will commence immediately from the date of issuance of policy. 2 Date of vesting under this plan: If the policy is issued on the life of a minor, the policy shall automatically vest in the Life Assured on the policy anniversary coinciding with or immediately following the completion of 18 years of age and shall on such vesting be deemed to be a contract between the Corporation and Life Assured. 2. BENEFITS a) Death Benefit: On death of the Life Assured during the policy term, provided the policy is in[1]force i.e. all due premiums have been paid shall be as under: i. On death before the commencement of Risk: Return of premium/s paid without interest excluding taxes, extra premium and rider premium, if any, shall be payable. ii. On Death after the commencement of Risk: Death Benefit payable, shall be “Sum Assured on Death” along with vested Simple Reversionary Bonuses (as mentioned in (d) below) and Final Additional bonus, if any. Where “Sum Assured on Death” is defined as the highest of 7 times of annualised premium or Basic Sum Assured. This death benefit shall not be less than 105% of the total premiums paid up-to the date of death. Where, i. “Annualized Premium” shall be the premium payable in a year, excluding the taxes, rider premiums, underwriting extra premiums and loadings for modal premiums ii. “Total Premiums Paid” means total of all the premiums paid under the base product, excluding any extra premium, and taxes, if collected explicitly. In case LIC’s Premium Waiver Benefit Rider is opted for, in the event of death of Proposer, any subsequent Premiums which are waived shall be deemed to have been received and be included in the Total Premiums Paid. b) Survival Benefit: On the life assured surviving to the end of the premium paying term, provided all due premiums have been paid, a survival benefit equal to 8% of Basic Sum Assured shall be payable each year. The first survival benefit payment is payable at the end of premium paying term and thereafter on completion of each subsequent year till the Life assured survives or till the policy anniversary prior to the date of maturity, whichever is earlier. c) Maturity Benefit: On the life assured surviving to the end of the policy term, provided all due premiums have been paid, “Sum Assured on Maturity” along with vested Simple Reversionary Bonuses (as mentioned in (d) below) and Final Additional bonus, if any, shall be payable. Where “Sum Assured on Maturity” is equal to Basic Sum Assured. d) Participation in profits: Depending upon the Corporation’s experience with regard to policies issued under this plan, the policy shall participate in following manner. During the premium paying term: Policies shall be eligible to receive Simple Reversionary Bonuses declared as per the experience of the Corporation during the premium paying term, provided the policy is in-force. Once declared, they form part of the guaranteed benefits of the plan on such terms as declared by the Corporation. In case the premiums are not duly paid, the policy shall cease to participate in future profits during premium paying term. In the event of policy being surrendered, the Surrender Value of vested bonuses, if any, as applicable on the date of surrender. Final Additional Bonus may also be declared under an in-force policy in the year when such policy results into a claim by death. However, Final Additional Bonus 3 shall not be payable under paid-up policy or on surrender of a policy during the premium paying term. After the premium paying term (applicable only for fully paid-up policies or for paid-up policies with Maturity Paid-up Sum Assured of Rs. 2 lakhs or more): Under a fully paid-up policy (where all premiums payable during the term of the policy are paid) or in a paid-up policy with Maturity Paid-up Sum Assured of Rs. 2 lakhs or more, the terms for participation of profits after the premium paying term may be in a different form and on a differential scale depending on the Corporation’s experience under this plan at that time. Final Additional Bonus may also be declared under the policy in the year when a policy results into a claim either by death or maturity at such rates and on such terms as may be declared by the Corporation. In addition, applicable Final Additional Bonus for surrendering policies, if any, may be considered in payment of Special Surrender Value. Under a paid-up policy with Maturity Paid-up Sum Assured of less than Rs. 2 lakhs, the policy shall not participate in future profits. The actual allocation to policyholders, out of the surplus emerging from the actuarial investigation, shall in accordance with provisions in this regard under LIC Act, 1956. 3. OPTIONS AVAILABLE I. Rider Benefits: The following four optional riders (or amended version of these) shall be available under this plan by payment of additional premium. However, the policyholder can opt between either of the LIC’s Accidental Death and Disability Benefit Rider or LIC’s Accident Benefit Rider and/or the remaining two riders subject to the eligibility as detailed below: LIC’s Accidental Death and Disability Benefit Rider This rider can be opted for at any time under an in-force policy within the premium paying term of the Base plan provided the outstanding premium paying term of the Base plan as well as rider is @least 5 years. The benefit cover under this rider shall be available up-to the policy anniversary on which the age nearer birthday of the Life Assured is 70 years. If this rider is opted for, in case of accidental death, the Accident Benefit Sum Assured will be payable in lump sum In case of accidental disability arising due to accident (within 180 days from the date of accident), an amount equal to the Accident Benefit Sum Assured will be paid in equal monthly instalments spread over 10 years and future premiums for Accident Benefit Sum Assured as well as premiums for the portion of Basic Sum Assured under the Base policy which is equal to Accident Benefit Sum Assured, shall be waived. Under the policy on the life of minors, this rider will be available from the policy anniversary following completion of age 18 years on receipt of specific request. a) LIC’s Accident Benefit Rider This rider can be opted for at any time under an in-force policy within the premium paying term of the Base plan provided the outstanding premium paying term of the Base plan as well as rider is @least 5 years. The benefit cover under this rider shall be available only during the premium paying term. If this rider is opted for, in case of accidental death, the Accident Benefit Sum Assured will be payable in lump sum. Under the policy on the life of minors, this rider will be available from the policy anniversary following completion of age 18 years on receipt of specific request. b) LIC’s New Term Assurance Rider This rider is available at inception of the policy only. The benefit cover under this rider shall be available for a term of 35 years or till the policy anniversary on which the age nearer birthday of the Life assured is 75 years, whichever is earlier. If this rider is opted for, an amount equal to ‘Term Rider Sum Assured on Death’ shall be payable on death of the Life Assured during the rider term. c) LIC’s Premium Waiver Benefit Rider Under an in-force policy, this rider can be opted for on the life of Proposer of the policy, at any time coinciding with the policy anniversary but within the premium paying term of the Base Policy provided the outstanding premium paying term of the Base Policy and the rider 4 is at least five years. Further, this rider shall be allowed under the policy wherein the Life Assured is Minor at the time of opting this rider. The Rider term shall be (25 minus age of the minor Life Assured) at the time of opting this rider. If the Rider term plus proposer’s age is more than 70 years, the Rider shall not be allowed. If this rider is opted for, on death of proposer, payment of premiums in respect of base policy falling due after the date of death till the expiry of rider term shall be waived. However, in such case, if the premium paying term of the Base policy exceeds the rider term, all the further premiums due under the Base policy from the date of expiry of this Premium Waiver Benefit Rider term shall be payable by the Life Assured. On non-payment of such premiums the policy would become paid-up. The premiums under all the life insurance riders put together shall not exceed 30% of premiums under the base plan. The Rider Sum Assured in respect of LIC’s Accident Benefit Rider shall not exceed three times of Basic Sum Assured under the Base product. Any benefit arising under each of all other riders shall not exceed Basic Sum Assured under the Base product. For more details on the above riders, refer to the rider brochure or contact LIC’s nearest Branch Office. II. Option to take Death Benefit in instalments: This is an option to receive death benefit in instalments over the chosen period of 5 or 10 or 15 years instead of lump sum amount under an in-force as well as paid-up policy. This option can be exercised by the Policyholder during minority of the Life Assured or by Life Assured aged 18 years and above, during his/her life time; for full or part of Death benefits payable under the policy. The amount opted for by the Policyholder/Life Assured (ie.Net Claim Amount) can be either in absolute value or as a percentage of the total claim proceeds payable. The instalments shall be paid in advance at yearly or half-yearly or quarterly or monthly intervals, as opted for, subject to minimum instalment amount for different modes of payments being as under: Mode of Instalment payment Minimum instalment amount Monthly Rs. 5,000/- Quarterly Rs. 15,000/- Half-Yearly Rs. 25,000/- Yearly Rs. 50,000/- If the Net Claim Amount is less than the required amount to provide the minimum instalment amount as per the option exercised by the Policyholder/Life Assured, the claim proceeds shall be paid in lump sum only. For all the instalment payment options commencing during the 12 months’ period from 1st May to 30th April, the interest rate used to arrive at the amount of each instalment shall be annual effective rate not lower than the 10 year semi-annual G- Sec yield p.a. minus 2%; where, the 10 year semi-annual G-Sec yield shall be as at last trading day of previous financial year. Accordingly, for the 12 months period commencing from 1st May, 2024 to 30th April, 2025, the applicable interest rate for the calculation of the instalment amount shall be 5.07% p.a. effective. For exercising option to take Death Benefit in instalments, the Policyholder during minority of the Life Assured or the Life Assured, if major, can exercise this option during his/her lifetime while in currency of the policy, specifying the period of Instalment payment and net claim amount for which the option is to be exercised. The death claim amount shall then be paid to the nominee as per the option exercised by the Policyholder/Life Assured and no alteration, whatsoever, shall be allowed to be made by the nominee. 4. PAYMENT OF PREMIUMS Premium can be paid regularly at yearly, half-yearly, quarterly or monthly mode (monthly premiums through NACH only) or through salary deductions during the Premium Paying Term of the policy. 5 5. GRACE PERIOD A grace period of 30 days shall be allowed for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums from the date of first unpaid premium. During this period, the policy shall be considered in-force with the risk cover without any interruption as per the terms of the policy. If the premium is not paid before the expiry of the days of grace, the Policy lapses. The above grace period will also apply to rider premiums which are payable along with premium for base policy. 6. SAMPLE ILLUSTRATIVE PREMIUM The sample illustrative annual premiums (in Rs.) for Basic Sum Assured of Rs 2 lakh for Standard lives are as under: AGE PREMIUM PAYING TERM 15 20 25 30 20 16542 11407 8536 6840 30 16542 11407 8595 7027 40 16542 11476 9036 7664 50 16542 12368 The above premium is exclusive of taxes. 7. REBATES Mode Rebate: Yearly mode - 2% of Tabular Premium Half-yearly mode - 1% of Tabular premium Quarterly, Monthly (NACH) & - NIL Salary deduction High Basic Sum Assured Rebate: Basic Sum Assured (BSA) Rebate on tabular premium(Rs.) 2,00,000 to 4,50,000 Nil 5,00,000 to 9,00,000 2.50 ‰ BSA 10,00,000 to 24,00,000 3.50 ‰ BSA 25,00,000 and above 4.00 ‰ BSA 8. REVIVAL If premium is not paid within the grace period then the policy will lapse. A lapsed policy can be revived within a period of 5 consecutive complete years from the date of first unpaid premium. The revival shall be effected on payment of all the arrears of premium(s) together with interest (compounding half-yearly) at such rate as may be fixed by the Corporation from time to time and on satisfaction of Continued Insurability of the Life Assured and/or Proposer (if LIC’s Premium Waiver Benefit Rider is opted for) on the basis of information, documents and reports that are already available and any additional information in this regard if and as may be required in accordance with the Underwriting Policy of the Corporation at the time of revival, being furnished by the Policyholder/Life Assured/Proposer. The Corporation reserves the right to accept at original terms, accept with modified terms or decline the revival of a discontinued policy. The revival of a discontinued policy shall take effect only after the same is approved, accepted and revival receipt is issued by the Corporation and is specifically communicated to the Life Assured. If revival period falls beyond the premium paying term and the policy is revived after the due date of survival benefit(s), then:- i. the unpaid survival benefit(s) (applicable in case of paid-up policy wherein the Maturity Paid-up Sum Assured is less than 2 lakhs) or; ii. the difference between Survival benefits on full Basic Sum Assured and Survival benefits on Maturity Paid-up Sum Assured (applicable in case of paid-up policy wherein the Maturity Paid-up Sum Assured is equal to or greater than 2 lakhs) shall be paid to the policy holder. 6 The rate of interest applicable for revival under this product for every 12 months’ period from 1st May to 30th April shall not exceed 10 year G-Sec yield p.a. compounding half yearly as at the last trading day of previous financial year plus 3% or the yield earned on the Corporation’s Non-Linked, Participating Fund plus 1%, whichever is higher. For the 12 month’s period commencing from 1st May, 2024 to 30th April, 2025, the applicable interest rate shall be 9.50% p.a. compounding half yearly. The basis for determination of interest rate for policy revival is subject to change. Revival of rider, if opted for, will be considered along with revival of the Base Policy, and not in isolation 9. PAID-UP POLICY If less than one year’s premium(s) has been paid and any subsequent premium be not duly paid, all the benefits under the policy shall cease after the expiry of grace period from the date of first unpaid premium and nothing shall be payable. If after at one two full year’s premiums has been paid and any subsequent premiums be not duly paid, on completion of first policy year the policy shall not be wholly void but shall continue as a paid-up policy till the end of policy term. The Sum Assured on Death under a paid-up policy shall be reduced to a sum called “Death Paid-up Sum Assured” and shall be equal to Sum Assured on Death multiplied by the ratio of the total period for which premiums have already been paid bears to the maximum period for which premiums were originally payable. The Death Benefit payable under the paid-up policy, on death of the Life Assured, shall be Death Paid-Up Sum Assured along with vested simple reversionary bonuses and final additional bonus, if any. This Death benefit, shall not be less than 105% of total premiums paid upto the date of death. The Sum Assured on Maturity under a paid-up policy shall be reduced to a sum called “Maturity Paid-up Sum Assured” and shall be equal to Sum Assured on Maturity multiplied by the ratio of the total period for which premiums have already been paid bears to the maximum period for which premiums were originally payable. The Maturity Benefit payable under the paid-up policy, on expiry of the policy term, shall be Maturity Paid-Up Sum Assured along with vested simple reversionary bonuses and final additional bonus, if any. Survival benefits under a paid-up policy: 1. If Maturity Paid-up Sum Assured is less than the minimum Basic Sum Assured i.e. Rs. 2 lakhs, Survival Benefits shall not be paid under such policies. 2. If Maturity Paid-up Sum Assured is equal to or more than minimum Basic Sum Assured of Rs. 2 lakhs, Survival Benefits equal to 8% of Maturity Paid-up Sum Assured shall be payable each year. The first survival benefit payment is payable at the end of premium paying term and thereafter on completion of each subsequent year till the Life assured survives or till the policy anniversary prior to the date of maturity, whichever is earlier. A paid-up policy shall not be entitled to participate in the future profits during the premium paying term, however, the vested Simple Reversionary Bonuses shall remain attached to the reduced paid-up policy. Further, if a paid-up policy wherein the Maturity Paid-up Sum Assured is Rs. 2 lakhs or more, continues after premium paying term, it may participate in future profits after the premium paying term, depending on the Corporation’s experience under such paid-up policies. Rider(s) shall not acquire any paid-up value and the rider benefit(s) cease to apply, if policy is in lapsed condition. 10. SURRENDER the policy can be surrendered after completion of first policy year provided one full year’s premium(s) has been paid. However, the policy shall acquire Guaranteed Surrender Value on payment of @least two full years’ premiums and Special Surrender Value after completion of first policy year provided one full year’s premium(s) has been paid. On surrender of an in-force or paid-up policy, the Corporation shall pay the Surrender Value equal to higher of Guaranteed Surrender Value and Special Surrender Value. 7 8 The Guaranteed Surrender Value payable during the policy term shall be equal to the total premiums paid (excluding extra premiums, taxes if collected explicitly and premiums for riders, if opted for) multiplied by the Guaranteed Surrender Value factor applicable to total premiums paid. These Guaranteed Surrender Value factors expressed as percentages will depend on the policy term and policy year in which the policy is surrendered.