Home - Insurance Plans - Money Back with Profit
 
Introduction
Insurance Regulatory & Development Authority (IRDA) requires all life insurance companies operating in India to provide official illustrations to their customers. The illustrations are based on the investment rates of return set by the Life Insurance Council (constituted under Section 64C(a) of the Insurance Act 1938) and is not intended to reflect the actual investment returns achieved or may be achieved in future by Life Insurance Corporation of India (LICI).

For the year 2004-05 the two rates of investment return declared by the Life Insurance Council are 6% and 10% per annum.

Product summary
These are Money Back type Assurance plans that provide financial protection against death throughout the term of plan along with the periodic payments on survival at specified durations during the term.

Premiums :
Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as opted by you throughout the term of the policy, or till the earlier death.

Bonuses :
This is a with-profit plan and participate in the profits of the Corporation’s life insurance business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. Final (Additional) Bonus may also be payable provided policy has run for certain minimum period.

Death Benefit:

The Sum Assured plus all bonuses to date is payable in a lump sum upon the death of the life assured during the policy term irrespective of the Survival benefit /benefits paid earlier.

Survival Benefits:
The percentage of Sum Assured as mentioned below will be paid on survival to the end of specified durations :

% of Sum Assured paid at the end of specified duration
Duration
Plan
75
93
5
20%
15%
10
20%
15%
15
20%
15%
20
40%
15%
25
-
40%

All bonuses declared upto the maturity date will also be paid alongwith the final survival benefit.

Supplementary/Extra Benefits :
These are the optional benefits that can be added to your basic plan for extra protection/option. An additional premium is required to be paid for these benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender values are available under the plan on earlier termination of the contract.

Guaranteed Surrender Value:
The policy may be surrendered after it has been in force for 3 years or more. The guaranteed surrender value is 30% of the basic premiums paid excluding the first year’s premium and all survival benefits paid earlier.

Corporation’s policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value – which is either equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender is the discounted value of the reduced claim amount that would be payable on death or at maturity. This value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender. In some circumstances, in case of early termination of the policy, the surrender value payable may be less than the total premiums paid.

The Corporation reviews the surrender value payable under its plans from time to time depending on the economic environment, experience and other factors.

Note:
The above is the product summary giving the key features of the plan. This is for illustrative purpose only. This does not represent a contract and for details please refer to your policy document.


Plan/ Term
75/ 20 Years
93/ 25 Years
At the end of 5 years
20%
15%
At the end of 10 years
20%
15%
At the end of 15 years
20%
15%
At the end of 20 years
balance 40% + bonus
15%
At the end of 25 years
NIL
balance 40% + bonus


Benefit Illustration :

Statutory warning :
“Some benefits are guaranteed and some benefits are variable with returns based on the future performance of your insurer carrying on life insurance business. If your policy offers guaranteed returns then these will be clearly marked “guaranteed” in the illustration table on this page. If your policy offers variable returns then the illustrations on this page will show two different rates of assumed future investment returns. These assumed rates of return are not guaranteed and they are not the upper or lower limits of what you might get back as the value of your policy is dependent on a number of factors including future investment performance.”

Illustration 1:
Age at entry : 35 years
Policy Term : 20 Years
Mode of premium payment : Yearly
Sum Assured : Rs. 1,00,000 /-
Annual Premium : Rs. 6564 /-

End of year
Total premiums paid till end of year

Benefit on Death during the year (Rs.)

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

6564

100000

2400

4800

102400

104800

2

13128

100000

4800

9600

104800

109600

3

19692

100000

7200

14400

107200

114400

4

26256

100000

9600

19200

109600

119200

5

32820

100000

12000

24000

112000

124000

6

39384

100000

14400

28800

114400

128800

7

45948

100000

16800

33600

116800

133600

8

52512

100000

19200

38400

119200

138400

9

59076

100000

21600

43200

121600

143200

10

65640

100000

24000

48000

124000

148000

15

98460

100000

36000

72000

136000

172000

20

131280

100000

48000

96000

148000

196000


























End of year
Total premiums paid till end of year

Benefit on survival / maturity at the end of year

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

6564

0

0

0

0

0

2

13128

0

0

0

0

0

3

19692

0

0

0

0

0

4

26256

0

0

0

0

0

5

32820

20000

0

0

20000

20000

6

39384

0

0

0

0

0

7

45948

0

0

0

0

0

8

52512

0

0

0

0

0

9

59076

0

0

0

0

0

10

65640

20000

0

0

20000

20000

15

98460

20000

0

0

20000

20000

20

131280

40000

53000

106000

93000

146000

             


























Illustration 2:
Age at entry : 35 years
Policy Term : 25 Years
Mode of premium payment : Yearly
Sum Assured : Rs. 1,00,000 /-
Annual Premium : Rs. 5507 /-

End of year
Total premiums paid till end of year

Benefit on Death during the year (Rs.)

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

5507

100000

2700

4800

102700

105800

2

11014

100000

5400

9600

105400

111600

3

16521

100000

8100

14400

108100

117400

4

22028

100000

10800

19200

110800

123200

5

27535

100000

13500

24000

113500

129000

6

33042

100000

16200

28800

116200

134800

7

38549

100000

18900

33600

118900

140600

8

44056

100000

21600

38400

121600

146400

9

49563

100000

24300

43200

124300

152200

10

55070

100000

27000

48000

127000

158000

15

82605

100000

40500

72000

140500

187000

20

110140

100000

54000

116000

154000

216000

25

137675

100000
67500
145000
167500
245000


























End of year
Total premiums paid till end of year

Benefit on survival / maturity at the end of year

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

5507

0

0

0

0

0

2

11014

0

0

0

0

0

3

16521

0

0

0

0

0

4

22028

0

0

0

0

0

5

27535

15000

0

0

15000

15000

6

33042

0

0

0

0

0

7

38549

0

0

0

0

0

8

44056

0

0

0

0

0

9

49563

0

0

0

0

0

10

55070

15000

0

0

15000

15000

15

82605

15000

0

0

15000

15000

20

110140

15000

0

0

15000

15000

25
137675
40000
74500
161000
114500
201000



























i) This illustration is applicable to a non-smoker male/female standard (from medical, life style and occupation point of view) life.

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 LICI 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 illustration 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.

iv) Future bonus will depend on future profits and as such is not guaranteed. However, once bonus is declared in any year and added to the policy, the bonus so added is guaranteed.

 

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