Insurance Topic

LIC's New Endowment Plan is a Par, Non-Linked, Life, Individual, Savings plan which offers an attractive combination of protection and saving features. This combination provides financial support for the family of the deceased policyholder any time before maturity and lump sum amount at the time of maturity for the surviving policyholders. 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. • Flexibility to - Choose the premium payment frequency as per convenience. - Choose the period for which protection is required. - Opt for payment of 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 Restrictions: a) Minimum Age at entry : 8 years (completed) b) Maximum Age at entry : 50 years (nearer birthday) c) Minimum Maturity Age : 20 years (completed) d) Maximum Maturity Age : 75 years (nearer birthday) e) Minimum Policy Term : 12 years f) Maximum Policy Term : 35 years g) Minimum Basic Sum Assured:200,000 h) Maximum Basic Sum Assured : No Limit The Basic Sum Assured shall be in multiple of amounts specified below: Basic Sum Assured Range Sum Assured Multiple From 2,00,000/- to  4,50,000/- ` 5,000/- Above ` 4,50,000/- to ` 9,00,000/- ` 50,000/- Above ` 9,00,000/- ' 1,00,000/- Date of commencement of risk under the plan: Risk will commence immediately on acceptance of the risk. 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 3 2. Benefits: A. Death Benefit: Death benefit payable in case of death of the Life Assured during the policy term provided the policy is in-force (i.e. all due premiums have been paid) 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 higher of Basic Sum Assured or 7 times of annualized premium. This death benefit shall not be less than 105% of total premiums paid upto 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. 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 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. 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. 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. 4 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: a) 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 policy term of the Base plan provided the outstanding premium paying term of the base plan as well as rider is at least 5 years, but before the policy anniversary on which the age nearer birthday of the life assured is 65 years. The benefit cover under this rider shall be available during the policy term or before the policy anniversary on which the age nearer birthday of the life assured is 70 years, whichever is earlier. 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 age18 years on receipt of specific request. b) LIC’s Accident Benefit Rider (UIN: 512B203V03) This rider can be opted for at any time under an in-force policy within the policy term of the Base plan provided the outstanding premium paying term of the base plan as well as rider is @least 5 years, but before the policy anniversary on which the age nearer birthday of the life assured is 65 years. The benefit cover under this rider shall be available during the policy term or before the policy anniversary on which the age nearer birthday of the life assured is 70 years, whichever is earlier. 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. c) 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. d) LIC’s Premium Waiver Benefit Rider (UIN: 512B204V04) 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 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 either outstanding Premium Paying Term of the base plan as on date of opting this rider or (25 minus age of the minor Life Assured at the time of opting this rider), whichever is lower. 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 on and 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 ben- efit 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. 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 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 (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 modes of payments being as under: Mode of Instalment payment Minimum instalment amount Monthly ` 5,000/- Quarterly ` 15,000/- Half-Yearly ` 25,000/- Yearly ` 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 instalment 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 Instalment 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 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 • (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 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 shall be as at last trading day of previous financial year during which Settlement Option 5 6 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 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. 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 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 (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 modes of payments being as under: Mode of Instalment payment Minimum instalment amount Monthly ` 5,000/- Quarterly ` 15,000/- Half-Yearly ` 25,000/- Yearly ` 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 installment amount shall be 5.07% p.a. effective. For exercising option to take Death Benefit in installments, 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 Installment 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: Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly mode (through NACH only) or through salary deductions over the term of 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.