The Sum Assured on Death will always be a minimum of 105% of all premiums paid. The premiums here do not include the tax components.
The Loyalty Additions cannot be known in advance. This is declared by LIC every year.
– On survival during the policy, the Life Insured will get the following:
The policy continues till the end of the policy term, at which point you get the Maturity Benefit.
– On survival till the end of the Policy Term, the policyholder will get the following payouts depending on the policy term:
The Guaranteed Additions which have accrued every year and the Loyalty Additions will also be paid at Maturity.
– Life Insurance premiums paid up to Rs. 1,50,000 are allowed as a deduction from the taxable income each year under section 80C under current Income Tax Rules. The Maturity Benefit is also tax free under section 10(10)D subject to fulfilment of all terms and conditions. These tax rebates may be revised from time to time.
- You can avail a lot against your policy once it acquires a Surrender Value. This plan acquires a Surrender Value after 2 years of premiums have been paid. Currently, the interest rate is 9.5% per annum. This may change from time to time. The maximum loan amount depends on the surrender value of the plan:
Riders - You can choose from a list of 5 riders in this plan. They will offer increased benefits and flexibilities. You will have to pay additional premiums for the same. Please go through the rider benefit in detail before opting for it. The basic rider details are as follows:
- Accidental Death and Disability Benefit Rider - In case of death due to an accident, the Accident Benefit Rider Sum Assured will be paid along with the Basic Sum Assured of the plan. In case of disability arising due to accident (within 180 days from the date of accident), the Accident Benefit Sum Assured will be paid in 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 which is equal to Accident Benefit Sum Assured under the policy, shall be waived.
- Accident Benefit Rider - In case of death due to an accident, the Accident Benefit Rider Sum Assured will be paid along with the Basic Sum Assured of the plan.
- New Term Assurance Rider - An additional amount opted under the rider would be paid along with the Basic Sum Assured.
- New Critical Illness Benefit Rider - On the first diagnosis of any of the 15 critical illnesses covered in this rider, the Critical Illness Sum Assured will be paid to the policyholder.
- Premium Waiver Benefit Rider - The Proposer can opt for this when the Life Assured in this plan is a minor. In case of death of the Proposer, the future premiums are waived off.
Grace Period - You have a grace period of 30 days after your premium payment due date in case of yearly, half-yearly and quarterly payment modes. In case of monthly payment mode, the grace period is 15 days.
Option to defer taking the Survival Benefits - You can choose to not take the Survival Benefits when it is due. You can choose to take it anytime later during the policy term or take it along with the Maturity Benefit. You will be paid an interest rate for this. The interest rate will be the 5 year G-Sec rate minus 150 bps. Currently this will translate to approximately 6.5% per annum. Please contact the LIC office to understand this better.
Option to take the Maturity Benefits in Instalments - This is also called the Settlement Option. You can choose to take the Maturity Benefits over 5, 10 or 15 years. You can choose yearly, half-yearly, quarterly or monthly payments. You will be paid an interest for this. You will need to contact the LIC office to know the interest rate being offered.
Option to take the Death Benefits in Instalments - If you opt for this, your nominee will get the Death Benefit over 5, 10 or 15 years. You can choose yearly, half-yearly, quarterly or monthly payments. You will be paid an interest for this. You will need to contact the LIC office to know the interest rate being offered.
Surrender Value - The plan can be surrendered if 2 years of premiums have been paid. The plan offers a Guaranteed Surrender Value and a Special Surrender Value. The special surrender value can only be know on contacting the LIC office at the time of surrendering. You guaranteed Additions also acquire a surrender value.
Illustration (LIC Jeevan Shiromani Premium and Maturity Calculator)
Let us understand this plan better with the help of a few examples.
Suppose Bhavesh who is 30 years old buys this plan.
Basic Sum Assured - Rs. 10,00,000
Policy Term - 20 years
Premium Payment Term - 16 years
Annual premium - Rs. 1,08,584 + Taxes
Scenario 1 - Bhavesh dies after 3 years of buying the plan.
Death Benefit = His nominee will get the highest of the following as “Sum Assured on Death” + “Guaranteed Additions”
The Sum Assured on Death is the highest of the following:
- 10 times the Annualised premium = 10 x 1,08,584 = Rs. 10,85,840
- 125% of the Basic Sum Assured = 125% x 10,00,000 = 12,50,000
- 10% of the Basic Sum Assured = 10% x 10,00,000 = Rs. 1,00,000
Guaranteed Additions - Rs. 50 per 1,000 Sum Assured for 3 years = 3 x 50,000 = Rs. 1,50,000..
So the nominee will get Rs. 12,50,000 + Rs. 1,50,000 = Rs. 14,00,000.
The policy terminates.
Scenario 2 - Bhavesh dies after paying premiums for 7 years.
Death Benefit = His nominee will get the highest of the following as “Sum Assured on Death” + “Guaranteed Additions” + “Loyalty Additions” if any
The Sum Assured on Death is the highest of the following:
- 10 times the Annualised premium = 10 x 1,08,584 = Rs. 10,85,840
- 125% of the Basic Sum Assured = 125% x 10,00,000 = 12,50,000
- 10% of the Basic Sum Assured = 10% x 10,00,000 = Rs. 1,00,000
Guaranteed Additions -
For the 1st 5 years - Rs. 50 per 1,000 Sum Assured every year = 5 x 50,000 = Rs. 2,50,000.
For 6th & 7th years - Rs. 55 per 1,000 Sum Assured for 2 years = 2 x 55,000 = Rs. 1,10,000
So the nominee will get Rs. 12,50,000 + Rs. 2,50,000 + 1,10,000 = Rs. 16,10,000 + Loyalty Additions if declared.
The policy terminates.
Scenario 3 - Bhavesh dies after paying premiums for 17 years.
Navjot would be eligible to receive the 1st tranche of Survival Benefit. In addition, his nominee will receive the Death Benefit.
Survival Benefit - Bhavesh would get this after the 16th year.
- 45% of Basic Sum Assured = 45% of Rs. 10,00,000 = Rs. 4,50,000
Death Benefit = His nominee will get the highest of the following as “Sum Assured on Death” + “Guaranteed Additions” + “Loyalty Additions” if any
The Sum Assured on Death is the highest of the following:
- 10 times the Annualised premium = 10 x 1,08,584 = Rs. 10,85,840
- 125% of the Basic Sum Assured = 125% x 10,00,000 = 12,50,000
- 10% of the Basic Sum Assured = 10% x 10,00,000 = Rs. 1,00,000
Guaranteed Additions -
For the 1st 5 years - Rs. 50 per 1,000 Sum Assured every year = 5 x 50,000 = Rs. 2,50,000.
For remaining 12 years - Rs. 55 per 1,000 Sum Assured for 12 years = 12 x 55,000 = Rs. 6,60,000
So the nominee will get Rs. 12,50,000 + Rs. 2,50,000 + 6,60,000 = Rs. 21,60,000 + Loyalty Additions if declared.
Scenario 4 - Bhavesh survives the policy term.
Bhavesh will get the Survival Benefits and the Maturity Benefits.
Survival Benefit after 16 years = 45% of Basic Sum Assured = 45% of Rs. 10,00,000 = Rs. 4,50,000.
Survival Benefit after 18 years = 45% of Basic Sum Assured = 45% of Rs. 10,00,000 = Rs. 4,50,000.
Maturity Benefit = 10% of Basic Sum Assured + Guaranteed Additions + Final Additions if any.
10% of Basic Sum Assured = 10% x 10,00,000 = Rs. 1,00,000
Guaranteed Additions in the first 5 years = 5 x Rs. 50,000 = Rs. 2,50,000
Guaranteed Additions in the 6th to 20th years = 15 x Rs. 55,000 = Rs. 8,25,000