Insurance Topic

LIC’s Jeevan Lakshya is a Par, Non-linked, Life, Individual, Savings plan which offers a combination of protection and savings. This plan provides for Annual Income benefit that may help to fulfil the needs of the family, primarily for the benefit of children, in case of unfortunate death of Policyholder any time before maturity and a lump sum amount at the time of maturity irrespective of survival of the Policyholder. This Plan can be purchased Offline through Licensed Agents, corporate Agents, Brokers and Insurance Marketing Firms. KEY FEATURES: • The plan provides for protection and savings. • Option for payment of benefits 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 RESTRICTIONS: a) Minimum Age at entry : 18 years (Last birthday) b) Maximum Age at entry : 50 years (nearer birthday) c) Minimum Maturity Age : 31 years (nearer birthday) d) Maximum Maturity Age : 65 years (nearer birthday) e) Minimum Policy Term : 13 years f) Maximum Policy Term : 25 years g) Premium Paying Term : (Policy Term -3) years h) Minimum Basic Sum Assured : Rs. 2,00,000 i) Maximum Basic Sum Assured : No Limit, subject to underwriting decision* (* The maximum Basic Sum Assured allowed to each individual will be subject to underwriting decision as per Board Approved Underwriting Policy.) j) Basic Sum Assured Multiples : The Basic Sum Assured shall be in multiples of amounts as specified below: Basic Sum Assured Range Sum Assured Multiple From Rs. 2,00,000 to Rs. 4,00,000 Rs. 10,000 Above Rs. 4,00,000 Rs. 50,000 3 Date of commencement of risk: Under this plan, the risk will commence immediately from the date of acceptance of the risk. 2. BENEFITS: A. Death Benefit: On death of the Life Assured during the policy term before the stipulated Date of Maturity provided the policy is in-force i.e. all due premiums have been paid, Death Benefit, defined as sum of “Sum Assured on Death”, vested Simple Reversionary Bonuses and Final Additional Bonus, if any, shall be payable. Where “Sum Assured on Death” is defined as higher of: - 7 times of annualised premium or - Sum of 110% of Basic Sum Assured, which shall be payable on date of maturity and Annual Income Benefit equal to 10% of the Basic Sum Assured, which shall be payable from the policy anniversary coinciding with or following the date of death of Life Assured, till the policy anniversary prior to the date of maturity. Where, (i) “Annualized Premium” shall be the premium payable in a year, excluding taxes, rider premiums, underwriting extra premiums and loadings for modal premiums, and (ii) “Total Premiums Paid” means the total of all premiums paid under the Base product excluding any extra premium and taxes, if collected explicitly. The vested Simple Reversionary Bonuses and Final Additional Bonus, if any, included in the Death Benefit, shall be payable on due date of maturity. The Death Benefit defined above shall not be less than 105% of total premiums paid up to the date of death. B. Maturity Benefit: On Life Assured surviving the policy term, provided the policy is in-force, “Sum Assured on Maturity” along with vested Simple Reversionary bonuses and Final Additional bonus, if any, shall be payable. Where “Sum Assured on Maturity” is equal to Basic Sum Assured. C. Participation in Profits: The policy shall participate in profits of the Corporation and shall be entitled to receive Simple Reversionary Bonuses declared as per the experience of the Corporation, provided the policy is in-force. In case of death under a policy which is in-force, the policy shall continue to participate in profits upto the date of maturity and the 4 entire vested Simple Reversionary Bonuses and Final Additional Bonus, if any, shall be payable on due date of maturity. Hence, the Simple Reversionary Bonus and Final Additional Bonus, if any, shall be payable under the policy on due date of maturity irrespective of survival of the Life Assured. In case, the premiums are not duly paid, the policy shall cease to participate in future profits irrespective of whether or not the policy has acquired paid-up value. However, the policy shall be considered as in-force on death during the grace period. Simple Reversionary Bonuses shall be declared annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan on such terms and conditions as declared by the Corporation. In the event of policy surrendered, the surrender value of vested bonuses, if any, as applicable on the date of surrender shall be payable. Final Additional Bonus may also be declared under the policy in the year when the policy results into a claim either by death or maturity at such rates and on such terms as may be declared by the Corporation. Final Additional Bonus shall not be payable under paid-up policies. The actual allocation to policyholders, out of the surplus emerging from the actuarial investigation, shall be in accordance with provisions in this regard under LIC Act, 1956. 3. Options available: I. Rider Benefits: The following three 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 rider subject to the eligibility as detailed below: i) LIC’s Accidental Death and Disability Benefit Rider (UIN:512B209V02) 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 the rider is @least 5 years. The benefit cover under this rider shall be available during the policy term. 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 5 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. ii) LIC’s Accident Benefit Rider (UIN:512B203V03) 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 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. iii) LIC’s New Term Assurance Rider (UIN: 512B210V02) this rider is available at inception of the policy only. The benefit cover under this rider shall be available during the policy term. 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. 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: Under this option, the applicable lump sum amount payable in case of death of the Life Assured, which shall be payable on date of maturity under an in-force or paid-up policy, can be received in instalments over the chosen period of 5 or 10 or 15 years instead of lump sum amount. This option can be exercised only by the Life Assured during his/her life time; for full or part of the lump sum amount payable in case of death, as specified above. The amount opted by the Life Assured (i.e. Net Claim Amount) can be either in absolute value or as a percentage of the total claim proceeds payable. This option shall not be applicable for the Annual Income Benefit payable on death of the Life Assured. 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: 6 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 Life assured, the claim proceed 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 p.a. 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 Life Assured 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 Life Assured and no alteration whatsoever shall be allowed to be made by the nominee. III. Settlement Option (for Maturity Benefit): Settlement Option is an option to receive Maturity 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 Life Assured for full or part of Maturity proceeds payable under the policy. The amount opted for by the 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 mode of payments being as under: 7 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 Life Assured, the claim proceed 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 p.a. 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 the Settlement Option against Maturity Benefit, the Life Assured shall be required to exercise option for payment of net claim amount in instalments at least 3 months before the due date of maturity claim. The first payment will be made on the date of maturity and thereafter, based on the mode of instalment payment opted for by the Life Assured, every month or three months or six months or annually from the date of maturity, as the case may be. After the commencement of Instalment payments under Settlement Option: i. If a Life Assured, who has exercised Settlement Option against Maturity Benefit, desires to withdraw this option and commute the outstanding instalments, the same shall be allowed on receipt of written request from the Life Assured. In such case, the lump sum amount which is higher of the following shall be paid and policy shall terminate, • discounted value of all the future instalments due; or 8 • (the original amount for which settlement option was exercised) less (sum of total instalments already paid); ii. The applicable interest rates that will be used to discount the future instalment payments shall be annual effective rate not exceeding 10 year semi-annual G-sec yield p.a.; where the 10 year semi-annual G-sec yield p.a. shall be as at last trading day of previous financial year during which the Settlement Option was commenced. Accordingly, in respect of all the Settlement Options commenced during the 12 months period beginning from 1st May, 2024 to 30th April, 2025, the maximum applicable interest rate used for discounting the future instalments shall be 7.07% p.a. effective. iii. After the Date of Maturity, in case of death of the Life Assured, who has exercised Settlement Option, the outstanding instalments will continue to be paid to the nominee as per the option exercised by the Life Assured and no alteration whatsoever shall be allowed to be made by the nominee. 4. Payment of Premiums: Premiums can be paid regularly during the premium paying term at yearly, half-yearly, quarterly or monthly mode (through NACH only) or through salary deductions over the premium paying term of the policy. 5. Grace Period: A grace period of 30 days shall be allowed for payment of yearly or halfyearly 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: 9 AGE/TERM (in years) 13 (in years) (PPT = 10) 15 (in years) (PPT = 12) 20 (in years) (PPT = 17) 25 (in years) (PPT = 22) 20 20217 16670 11711 9006 30 20286 16758 11858 9222 40 20678 17209 12495 10074 50 22030 18698 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 & Salary deduction - NIL High Sum Assured Rebate (on Premium): Basic Sum Assured (B.S.A.) Rebate (Rs.) Rs. 2,00,000 to less than Rs. 5,00,000 Nil Rs. 5,00,000 to less than Rs. 10,00,000 4.00%o B.S.A. Rs. 10,00,000 and above 5.00%o B.S.A. 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 and before the date of maturity, as the case may be. 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 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 (Amount in Rs.) 10 at the time of revival, being furnished by the Policyholder/Life Assured. 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. 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(s), if opted for, will only be considered along with revival of the Base Policy, and not in isolation. 9. Paid-up Policy : If less than one full years’ 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 least one full years’ premium(s) 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 subsist as a paid-up policy till the end of the Policy Term. The benefit payable in case of death under a paid-up policy called “Death Paid-up Sum Assured”, shall be equal to the sum of: • 110% of Basic Sum Assured 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 which shall be payable on the date of maturity; and • Reduced Income Benefit i.e. 10% of Basic Sum assured multiplied 11 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, shall be payable from the policy anniversary coinciding with or following the date of death of Life Assured till the policy anniversary prior to date of maturity. The vested Simple Reversionary Bonuses and Final Additional Bonus, if any shall also be payable on due date of Maturity. This Death Benefit shall not be less than 105% of total premiums paid upto the date of death. The Sum Assured on Maturity under paid-up policy shall be reduced to such 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, if any. A paid-up policy shall not be entitled to participate in future profits. However, the vested Simple Reversionary Bonuses, if any, shall remain attached to the reduced paid up policy and shall be payable only on the date of maturity. Rider(s) do not acquire any paid-up value and the rider benefits 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 year’s 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 or Special Surrender Value. The Guaranteed Surrender value payable during the policy term.