Bima Bachat from LIC

What is Bima Bachat? LICs Bima Bachat is a money-back policy which offers financial security and assurance to the policy holder and his family. Bima Bachat requires the policy holder to pay only one premium. The amount paid for the premium depends on the duration of the policy taken and life insurance is available till the date of maturity. What other benefits do I receive during the specified duration of the policy? For a term 15 years: The policy holder will receive15% of the sum assured at the end of every 3rd, 6th, 9th and 12th policy year.

What additional benefits do I get upon maturity? If the policy holder outlives the duration of the policy, at the time of maturity, a single premium payment (excluding extra premium) is made along with loyalty additions, if any. How much insurance do I get? The policy holder is insured for an amount equal to the sum assured. What about the installment received already? The insurance cover is irrespective of the installments received. When am I eligible for the guaranteed surrender value? The guaranteed surrender value is available only after completion of at least one policy year. This value is equal to 90 % of the single premium paid (excluding extra premium). What other benefits does this insurance cover offer? Bima Bachat is the only money-back policy that offers a loan facility. The rate of interest for this will be determined from time to time by the corporation. Presently the rate of interest is 9% p.a. payable half-yearly. It also offers other benefits like the 15 day cooling off period, grace period and revival. Who is eligible for the policy? Are there other conditions or restrictions? The following are the requirements that one needs to be aware of before applying for this policy: The person applying for the policy should have completed 15 years and should not be older than 66 years. The policy will mature when the person is 75 years old. There is a choice of three terms to choose from (9, 12 and 15 years) for the policy depending on the age and requirement of the applicant. The minimum sum that needs to be assured is Rs 20,000/- and there is no limit on the amount that can be assured. It is important to note that the sum assured should be in multiples of Rs 5000/only. The policy requires the holder to pay a single premium.

Single Premium The sample premium rates are as under: Age 15 20 25 30 35 40 45 50 55 60 65 Annual Premium per 1000 SA 9 716.40 717.20 717.55 718.45 721.05 725.80 734.10 746.60 762.65 784.80 816.25 12 771.35 771.85 772.25 773.35 775.75 780.25 787.60 797.90 811.95 831.30 15 804.00 804.40 804.95 806.10 808.55 812.95 819.60 828.95 841.75 859.35 -

What incentives do I get for a higher sum assured? Lets take an example of a 30 year old with a Bima Bachat policy for 12 years. If the sum assured is Rs 45,000 then he has to pay a premium of Rs 34800.75. But for a sum assured amount of Rs 50,000 he will have to pay a premium of Rs 36734.13 only, thus getting a 5% rebate in premium. Refer to the table below for other rebate percentages: Less than Rs. 50,000 Rs. 50,000 and Less than Rs.1 lakh Rs. 1 lakh and Less than Rs.2 lakh Rs. 2 lakh and above NIL 5% 7% 8%

Illustration 1: Let us take the example of a policy holder who is 35 years old and takes a policy for the term of 9 years for a sum of Rs 1,00,000/-.He pays a single premium of Rs 67058/End Total Benefit on death during the year of premiums Variable Total year paid till Guaranteed Scenario Scenario Scenario Scenario end of 1 2 1 2 year 1 to 9 67058 100000 0 0 100000 100000

Survival Benefits : End Total of premiums year paid Benefit payable on survival at the end of specified year Variable Total Guaranteed Scenario Scenario Scenario Scenario 1 2 1 2 3 6 9 67058 67058 67058 15000 15000 67058 0 0 0 0 0 24300 15000 15000 67058 15000 15000 91358

Illustration 2: Let us take the example of a policy holder who is 35 years old and takes a policy for the term of 12 years for a sum of Rs 1,00,000/-.He pays a single premium of Rs 72145/-. End Total Benefit on death during the year of premiums Variable Total year paid till Guaranteed Scenario Scenario Scenario Scenario end of 1 2 1 2 year 1 to 12 72145 100000 0 0 100000 100000

Survival Benefits :

End Total of premiums year paid

Benefit payable on survival at the end of specified year Variable Total Guaranteed Scenario Scenario Scenario Scenario 1 2 1 2 15000 15000 15000 72145 0 0 0 0 0 0 0 40800 15000 15000 15000 72145 15000 15000 15000 112945

3 6 9 12

72145 72145 72145 72145

Illustration 3: Let us take the example of a policy holder who is 35 years old and takes a policy for the term of 15 years for a sum of Rs 1,00,000/-.He pays a single premium of Rs 75195/-.

End Total Benefit on death during the year of premiums Variable Total year paid till Guaranteed Scenario Scenario Scenario Scenario end of 1 2 1 2 year 1 to 15 75195 100000 0 0 100000 100000

Survival Benefits : End Total of premiums year paid Benefit payable on survival at the end of specified year Variable Total Guaranteed Scenario Scenario Scenario Scenario 1 2 1 2 15000 15000 15000 15000 75195 0 0 0 0 0 0 0 0 0 60000 15000 15000 15000 15000 75195 15000 15000 15000 15000 135195

3 6 9 12 15

75195 75195 75195 75195 75195

Notes: i) The above examples are applicable to a *standard non-smoker male/female (*medical condition, lifestyle and occupation) ii) *The non-guaranteed benefits (1) and (2) in above illustration are calculated so that they are consistent with the Projected Investment Rate of Return assumption of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in preparing this benefit illustration, it is assumed that the Projected Investment Rate of Return that LIC will be able to earn throughout the term of the policy will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of Return is not guaranteed.

iii) The main objective of the example is that the client is able to appreciate the features of the product and the flow of benefits in different circumstances with some level of quantification. The maturity benefit is the amount shown at the end of the policy term.

Jeevan Bharti policy for women

Posted by Sambeet

With the insurance sector opening up and private players making an entry into the market, the life insurance sector has become extremely competitive and Life Insurance Corporation has lost its monopoly. To maintain its leadership, the LIC [ Get Quote ] has been trying to come out with innovative products. One such product is the Jeevan Bharti policy for women. We take a look at its salient features. The Jeevan Bharti is the only women-specific policy in the country. It is a money-back policy and has a fixed term of 15 years or 20 years. In case of the 15-year policy, 20 per cent of the sum assured is payable at the end of the fifth and the tenth years. The remaining 60 per cent ,along with the guaranteed additions and any accrued bonus, is payable at maturity. Under the 20-year policy, 20 per cent of the sum assured is payable at the end of the fifth, tenth and the fifteenth years and the remaining 40 per cent along with guaranteed additions and bonuses is payable at maturity, that is the twentieth year. What makes this policy different from the regular money-back policies is the special benefits it offers. It comes with two in-built riders which means you do not need to pay additional premium for them. The female critical illness benefit ensures that you get a benefit equal to the sum assured (up to a maximum of Rs 2 lakh) in case you develop certain critical illnesses including breast cancer, cervical cancer and vulval cancer. There is a waiting period of six months and if you are detected to be suffering from any of these critical illnesses any time after that, you will be given the sum assured immediately. Whats more, the policy will continue as a regular policy for the remaining term and the premium will be waived.

For example, suppose Mrs A buys a 20-year policy for Rs 1 lakh. As per the terms of the policy she will get Rs 20,000 (that is, 20 per cent of the sum assured) after the fifth, tenth and the fifteenth years. Also, she gets the remaining Rs 40,000 (or 40 per cent) and the guaranteed additions on maturity. Now suppose she develops a critical illness in the sixth year. She will get Rs 1 lakh immediately, and will continue to get Rs 20,000 at the end of the tenth and the fifteenth year and Rs 40,000 on maturity, provided she is alive. In case she dies before the maturity of the policy, her nominees will only get the guaranteed additions. Under the congenital disabilities benefit, if a child born to the policyholder suffers from any of the listed congenital disabilities including Downs Syndrome and Spina Bifida, then a benefit equal to 50 per cent of the sum assured (subject to a maximum of Rs 1 lakh) will be available. The benefit is available for two children and will not be payable if the birth of the child occurs after the proposer attains the age of 40. Again, in spite of the payment of the benefit, the policy will carry on as normal till maturity. However, under this benefit the premium will not be waived. Now supposing Mrs A does not suffer from any of the mentioned critical illnesses. However, she dies a year before the policy matures (that is 19 years after having bought the policy). Her nominees will receive the full sum assured (Rs 1 lakh) along with the guaranteed additions and accrued bonuses, if any. This will be despite the fact that she would have already received Rs 60,000 (at the rate of Rs 20,000 at the end of the fifth, tenth and the fifteenth years). Jeevan Bharti is aimed at women in the age group of 18 years to 50 years and the sum assured is between Rs 50,000 and Rs 25 lakh. The policy comes with a free insurance cover of three years. Thus, if the premium has been paid for at least two years, the policy continues to be in effect for the next three years, even if premium is not paid. However, the special benefits are not covered during this period. The policy also gives you the freedom to pay the premium in advance and enjoy a 4 per cent rebate on the premium amount. The premium for the Jeevan Bharti is higher than a regular money-back policy. For example, if Mrs A is a 26-year-old woman then she will pay Rs 7,360 for a Rs 1 lakh policy for 20 years. If she were to buy a normal money-back policy then she would pay Rs 6,287.

However, under the Jeevan Bharti, besides the special benefits, she will also get guaranteed additions of Rs 50 per Rs 1,000 of sum assured for the first five years. So, at the time of maturity she will get an additional Rs 25,000. Under a normal money-back policy, there may not be any guaranteed additions. By paying an additional premium of Re 1 per Rs 1,000 sum assured, one can also get a accident benefit rider. In case of death due to accident, twice the amount of the sum assured, will be payable to the nominees. The Jeevan Bharti, like all other insurance policies is eligible for tax rebate under Section 88 and under Section 10 (10d).

JEEVAN ANAND LIFE INSURANCE POLICY BY LIC (table: 149)

Features of plan

Jeevan Anand plan is the combination of whole life policy and endowment insurance policy the plan provides the per-decided S.A. and bonus at the end of the stipulated PPT, but the risk cover on the life continues till death. This policy is suitable for the people of all ages and social groups. The policyholder will be benefited by giving protection to their families from a financial setback that may occur owing to their demise The amount assured if not paid by reason of his death earlier will be payable at the end of the endowment term where it can be invested in an annuity provision for the rest of the policyholder's of this plan is moderate premiums, high liquidity, saving oriented. Premiums are usually payable for the selected term of years or until death if it occurs during the term period. Accident benefit is available during engaged in hazardous occupations attracting occupational extra. Plan parameters Age at entry: Min.18 yrs Max. 65 yrs. PPT maturity age: Max. 75 yrs Sum assured: Min. 1,00,000 Max. No. Limit S.A. in multiples: 5000 Term: Min.5 yrs Max. 57 yrs Mode of payment: YLY/HLY/QLY/SSS/MLY Accident benefit: Incl. in. T.P. Policy loan: yes Housing loan: yes Assignment: yes Revival: yes Surrender of policy: yes Term rider: N.A. CIR: yes

UNDERWRITING CNDITION Form no: 300 (rev.) Age proof: std/ NSAP- 1,2,3 Female lives category: I/II/III Non-medical (Gen): Allowed Non-medical (Prof): Allowed Non-medical (special): Allowed Actual sum assured: Basic SA Risk coverage: SA+ Bonus Dating back @ 8%: Allowed BENEFITS Maturity benefit: S.A. +Bonus + FAB, if any is at the end of the premium paying term (PPT) Death benefit: If death occurs during the premium paying term S.A. + Bonus +FAB, if any is payable and premium payment is ceased. An extra amount equal to the S.A. is payable if death occurs after the premium paying term. No bonus is paid on death after the premium paying term. Accident benefit: The double accident benefit is available during the premium paying term and thereafter up to age 70. the premium for this has been built into the tabular premium rate. Example: Mr. Sharad Pawar 25 years, opts for jeevan anand policy for 20 years with S.A. Rs.1 Lac. He has to pay annual premium of Rs.5490/- on maturity, Mr. Sharad Pawar will get Rs.1,98,000/- (S.A. + Bonus as per 2005 rates i.e. Rs.43 per thousand per annum which become 43 x 100 x 20 = 86,000/-). Even after the premium paying term is over, risk cover continues till the death of Mr. Sharad Pawar. But if, Mr. Sharad Pawar dies at the age of 65 years his nominee will get an additional amount equal to the S.A. i. e. Rs.1 Lac in cash, Mr. Sharad Pawar dies during premium paying term his nominee will receive Rs. 1Lac + accumulated Bonus.