Insurance Topic

LIC's Single Premium Endowment Plan is a par, non-linked, life, individual, savings plan which offers an attractive combination of savings and protection features .This combination provides financial protection against death during the policy term with the provision of payment of lump sum at the end of the selected policy term in case of his/her survival. This Plan can be purchased Offline through Licensed agents, corporate Agents, Brokers and Insurance Marketing Firms. Key Features: • Single Premium plan. • The plan provides for protection and savings. • Flexibility to - Choose the period for which protection is required. - Opt for payment of benefit in installments. • Option to enhance protection by opting for Rider Benefit son 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 RESTRICTIONS a) Minimum entry age : 30 days (completed) b) Maximum entry age : 65 years (nearer birthday) c) Maximum maturity age: : 75 years (nearer birthday) d) Minimum policy term : 10 years e) Minimum age at maturity : 18 years (completed) f) Maximum policy term : 25 years g) Minimum Sum Assured : Rs. 1,00,000 h) Maximum Sum assured : No limit Sum Assured will be in multiples of amounts specified below: Basic Sum Assured Range Sum Assured multiple From Rs. 1,00,000/- to Rs. 2,50,000/- Rs. 10,000/- Above Rs. 2,50,000/- Rs. 25,000/- i) Premium payment mode : Single Premium only Date of commencement of risk: In case the age of Life Assured at entry is less than 8 years, risk under this plan will commence either 2 years from the date of commencement of policy or from the policy anniversary coinciding with or immediately following the attainment of 8 years of age, whichever is earlier. For those aged 8 years or more, risk will commence immediately from the date of acceptance of the risk i.e. from the Date of issuance of policy. Date of vesting under the 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 the Life Assured. 2. BENEFITS A. Death benefit: Death benefit payable on death of the life assured during the policy term after the date of commencement of risk but before the date of maturity, shall be “Sum Assured on Death” along with vested Simple Reversionary Bonuses and Final Additional Bonus, if any. Where, “Sum Assured on Death” is defined as: 2 • for age at entry of Life Assured less than 50 years: Higher of Basic Sum Assured or 1.25 times of Single premium. • For age at entry of Life Assured 50 years and above: Higher of Basic Sum Assured or 1.10 times of Single premium Single Premium referred above excludes taxes, extra premium and rider premium(s), if any. However, in case of minor Life Assured, whose age at entry is below 8 years, on death before the commencement of Risk (as specified in Para 1 above), the Death Benefit payable shall be refund of Single premium paid (excluding taxes, extra premium and rider premiums if any), without interest. B. Maturity Benefit: On Life Assured surviving the policy term, “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. 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 being 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. The actual allocation to policy holders out of the surplus emerging from the actuarial investigation, shall be in accordance with the provisions in this regard under LIC Act, 1956. 3. OPTIONS AVAILABLE I. Rider Benefits: The following two optional riders (or amended version of these) shall be available under this plan by payment of additional premium. a) LIC’s Accidental Death and Disability Benefit Rider (UIN: 512B209V02) this rider is available at inception of the policy only. 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. b) 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 policy term. The premiums under all the life insurance riders put together shall not exceed 30% of premiums under the base plan. Each of above Rider Sum Assured cannot exceed the Basic Sum Assured under the Base plan. For more details on the above riders, refer to the rider brochure or contact LIC’s nearest Branch Office. II. 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. This option can be exercised by the Policyholder during minority of the Life Assured or by Life Assured aged 18 years and above, for full or part of Maturity proceeds payable under the policy. The amount opted for by the Policyholder/Life Assured 3 (i.e. 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: 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 the Settlement Option against Maturity Benefit, the Policyholder/ 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. The first payment will be made on the date of maturity and thereafter, based on the mode of installment payment opted for by the policyholder, every month or three months or six months or annually from the date of maturity, as the case may be. After the commencement of Installment payments under Settlement Option: a. If a Life Assured, who has exercised Settlement Option against Maturity Benefit, desires to withdraw this option and commute the outstanding installments, 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 • (the original amount for which settlement option was exercised) less (sum of total instalments already paid). b. The applicable interest rate that will be used to discount the future installment 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 shall be as at last trading day of previous financial year during which 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. c. After the Date of Maturity, in case of death of the Life Assured, who has exercised Settlement Option, the outstanding installments 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. III. 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. 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 (i.e. Net Claim Amount) can be either in absolute value or as a percentage of the total claim proceeds payable. 4 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. SAMPLE ILLUSTRATIVE PREMIUM The sample illustrative single premium (in Rs.) for Basic Sum Assured of Rs 1 lakh for Standard lives are as under: - Age (near birthday) Policy Term 10 15 25 10 77,910 66,650 50,005 20 77,985 66,775 50,255 30 78,010 66,865 50,695 40 78,180 67,335 52,340 50 78,800 68,800 56,160 60 79,965 71,405 - The above premium is exclusive of taxes. 5. REBATE FOR HIGH SUM ASSURED High Sum Assured Rebates (on Premium): Basic Sum Assured (B.S.A.) Rebate (Rs.) Rs.1,00,000 to less than Rs. 2,00,000 Nil Rs. 2,00,000 to less than Rs. 3,00,000 20%o B.S.A. Rs. 3,00,000 to less than Rs. 5,00,000 30%o B.S.A. Rs.5,00,000 and above 40%o B.S.A. 6. POLICY LOAN Loans shall be available, within the surrender value, during the policy term subject to the following: i. Loan can be availed at any time during the policy term after three months from completion of the policy (i.e. 3 months from the Date of issuance of policy) or after expiry of the free-look period, whichever is later. ii. The maximum Loan allowed under a policy as a percentage of the Surrender Value shall be as under: 5 Policy Year Percentage of Surrender value 1st to 5th 50% 6th to 9th 60% 10th and above 80% iii. The loan during the minority of Life Assured can be availed by the Proposer provided the loan is raised for the benefit of the minor Life Assured. iv. The rate of loan interest applicable for full loan term, for the loan to be availed under this policy 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 date of previous financial year plus 3% or the yield earned on the Corporation’s Non-Linked Participating fund plus 1%, whichever is higher. For loan sanctioned during 12 months’ period commencing from 1st May, 2024 to 30th April, 2025 the applicable interest rate shall be 9.5% p.a. compounding half-yearly for entire term of the loan. The basis for determination of interest rate for Policy Loan is subject to change. v. During the policy term, in the event of default in payment of interest on the due dates and when the outstanding loan amount along with the interest is to exceed the Surrender Value, the Corporation would be entitled to foreclose such policies. Such policies when being foreclosed shall be entitled to payment of the difference of Surrender Value and the loan outstanding amount along with interest, if any. vi. Any outstanding loan along with interest shall be recovered from the claim proceeds at the time of exit.