LIFE INSURANCE CORPORATION OF INDIA
CENTRAL
OFFICE
Dept: Product Development “Yogakshema”
Jeevan
Bima Marg
Mumbai – 400 021
Ref: CO/PD/54 _______________
To,
All HODs of Central Office
All Zonal Offices
All Divisional Offices
All Branch Offices (through DOs)
MDCs, ZTCs, STCs, NIA and
Audit & Inspection Depts. of Zonal
Offices.
Re: INTRODUCTION OF LIC-AADHAAR (Plan No.824)
1. INTRODUCTION:
It has
been decided to introduce LIC - AADHAAR (Plan No. 824) with effect from _____________.
The
Unique Identification Number (UIN) for LIC-Aadhaar Plan is 512N289V01. This number has to be
quoted in all relevant documents furnished to the Policyholders and other users
(public, distribution channels).
This is a regular
premium paying conventional With-Profits Endowment Assurance plan for
individuals possessing Aadhaar card issued by Unique Identification Authority
of India (UIDAI). This plan shall be
available to standard lives only under applicable non-medical limit. The
benefits and other details of the plan are given below.
2. BENEFITS:
The benefits payable under an inforce policy are as under:
a) Benefits payable on death:
On death of the Life Assured during the policy term “Sum Assured on Death” shall be payable,
which is
the highest of
· Basic Sum Assured; or
· 10 times of
annualized premium; or
·
105% of all the premiums paid as on date of death.
The premium mentioned above excludes taxes, extra premium
and rider premiums, if any.
In addition to the above, Loyalty Addition, if any, shall
also be payable if death occurs after completion of 5th policy year.
b) Benefits payable on maturity:
On survival
to the end of the policy term Basic Sum Assured along with Loyalty Addition, if any,
shall be payable.
c) Participation in Profits:
Provided
the policy is in full force, then depending upon the Corporation’s experience
the policies under this plan will be eligible for Loyalty Addition. The Loyalty
Addition, if any, is payable on death after completion of 5th policy year or on
Policyholder surviving to the maturity, at such rate and on such terms as may
be declared by the Corporation.
3. OPTIONAL
BENEFIT:
This plan provides
the following optional rider by payment of additional premium:
LIC’s Accident Benefit Rider UIN (512B203V02): LIC’s Accident Benefit Rider is available as an optional rider by
payment of additional premium during the term of the policy. If there be more than one policy with which
this or any other Rider covering Accidental Deaths is attached and if the total
Accident Benefit Sum Assured under all such policies exceeds Rs.50 lakhs, the
benefits shall apply to the first Rs. 50 lakhs Accident Benefit Sum Assured in
order of date of policies issued.
If this benefit is opted for, and if Life Assured is involved in an
accident, leading to death and such incident shall occur within 180 days from
the date of accident then an additional amount equal to the Accident Benefit
Sum Assured is payable. However, the policy shall have to be in force at the
time of accident irrespective of whether or not it is in force at the time of
death.
The premium rate for this rider is as under;
i.
Rs. 0.50 per thousand Accident Benefit Sum Assured
irrespective of age.
ii.
Rs. 1.00 per thousand Accident Benefit Sum Assured,
if the Life Assured is engaged in police duty either in any military, naval or
police organization and opts for this cover while engaged in police duty.
Accident Benefit Rider shall not acquire any paid-up value and the rider
benefit will cease to apply, if policy is in lapsed condition.
4. ELIGIBILITY
CONDITIONS AND RESTRICTIONS:
For Basic Plan:
1)
Minimum Age at entry : 8 years (completed)
2)
Maximum Age at entry : 55 years (nearest birthday)
3)
Minimum
Policy Term : 10 years
4)
Maximum
Policy Term : 20 years
5)
Maximum Maturity Age for
Life Assured : 70 years (nearest birthday)
6)
Minimum
Basic Sum Assured per life :
Rs. 75,000/-
7)
Maximum
Basic Sum Assured per life :
Rs. 200,000/-
The Basic Sum Assured shall be in
multiples of Rs. 5000/-.
Age at entry for the Policyholder
is to be taken as age nearest birthday except for the minimum age at entry i.e.
8 years, where it is in completed years.
For
Accident Benefit Rider:
1)
Minimum
Entry Age :
18 years (completed)
2)
Maximum
Entry Age :
The cover can be opted for at New Business stage or at any policy anniversary
during the policy term.
3)
Maximum
cover ceasing Age : Same as under the basic plan.
4)
Minimum
Accident Benefit Sum Assured : Rs. 75,000/-
5)
Maximum
Accident Benefit Sum Assured: An
amount equal to the Basic Sum Assured under the Basic Plan subject to the
maximum of Rs.50 lakh overall limit taking all existing policies of the Life
Assured under individual as well as group schemes including policies with
inbuilt accident benefit taken with Life Insurance Corporation of India and the
Accident Benefit Sum Assured under the new proposal into consideration.
The Accident Benefit
Sum Assured shall be in multiples of Rs. 5,000/-.
5.
MODE OF PREMIUM PAYMENT:
The modes of premium payment allowable are Yearly, Half Yearly,
Quarterly, and Monthly (ECS only or through salary deductions).
6. PREMIUM
RATES:
The tabular premium rates per thousand Basic Sum
Assured are enclosed as Annexure 1.
The Class – I extra premium rates per thousand Basic Sum Assured, which
may be applicable at revival stage (as only standard lives shall be eligible at
NB stage), are enclosed as Annexure 2.
The above premium rates are exclusive of taxes.
7. GRACE
PERIOD FOR PAYMENT OF PREMIUM:
A grace period of one calendar month but not
less than 30 days will be allowed for payment of yearly, half-yearly or
quarterly premiums and 15 days for monthly mode of premium payment.
If the death of the Life Assured occurs within
the grace period but before the payment of premium then due, the policy will be
treated as inforce and the benefits will be paid after deduction of the said
unpaid premium and also the unpaid premium/s falling due before the next policy
anniversary.
If premium is not paid before the
expiry of the days of grace, the Policy lapses.
If the Policy has not lapsed and the
claim is admitted in case of death under the policy where the mode of payment
of premium is other than yearly, unpaid premium(s), if any, falling due before
the next policy anniversary shall be deducted from the claim amount.
The above grace period
will also apply to rider premiums as the rider premiums are to be paid along with
premium for the basic policy.
8. REBATES:
The rebates for basic
plan are as under:
Mode Rebate:
Yearly mode : 2% of tabular premium
Half-yearly mode : 1% of tabular premium
Quarterly and monthly
mode : NIL
High Basic Sum
Assured Rebate:
Basic Sum Assured Rebate
(Rs.)
75,000 to 1,45,000 :
Nil
1,50,000 to 2,00,000 : 1.50 ‰ Basic Sum Assured
9. CORPORATION
EMPLOYEES INSURANCE SCHEME (CEIS) REBATE:
Policy completed under Corporation’s Employee Insurance
Scheme (CEIS) will be eligible for the CEIS rebate as a percentage of tabular premium for the basic plan as well as on LIC’s
Accident Benefit rider premium, if opted for, at the following rates provided policy is not taken through any intermediary
such as Agent/ Corporate Agent/Broker/Direct Sales
Executive etc.
Policy Term
|
Percentage of
tabular premium as well as AB rider premium
|
10 to 14 years
|
4%
|
15 years or more
|
7.5%
|
10. COMMISSION
PAYABLE TO INTERMEDIARIES & CREDIT TO DEVELOPMENT OFFICERS:
a) Commission
rates (as a percentage of premium net of taxes) during the policy term are as
under:
Agents and Corporate Agents:
Policy Term 1st Year 2nd & 3rd
Year Subsequent Years
10 to 14 years
15% 5.5% 3.75%
15 years & above
18.75% 5.5% 3.75%
Bonus
Commission: 40% of 1st year
commission.
Brokers:
Policy Term 1st Year 2nd & 3rd
Year Subsequent Years
10 to 14 years
16% 5% 3.75%
15 years & above
19.75% 5% 3.75%
Bonus Commission: No bonus commission is payable to brokers.
b) Development Officer’s Credit:
Policy Term Credit
(as a % of the first year premium net of taxes)
10 to 14 years 30%
15 years & above 60%
11. PAID-UP
VALUE:
If after atleast three full years’ premium
have been paid and any subsequent premiums be not duly paid, this policy shall
not be wholly void, but shall subsist as a paid-up policy. The Basic Sum
Assured under the policy shall be reduced to such a sum, called Paid-up Sum
Assured, and shall bear the same ratio to the Basic Sum Assured as the number
of premiums actually paid bears to the total number of premiums originally
stipulated for in the policy i.e. Basic Sum Assured *(no. of premiums paid / Total
number of premiums payable).
Such Paid-up policy shall thereafter be free
from all liabilities for payment of the within mentioned premiums, but shall
not be entitled to participate in future profits. This Paid-Up Sum Assured is
payable on the expiry of policy term or on Life Assured’s prior death.
Notwithstanding what is stated above, if
atleast three full years’ premiums have been paid in respect of this policy,
and any subsequent premium be not duly paid, in the event of the death of the
Life Assured within six months from the due date of first unpaid premium, Basic
Sum Assured will be paid after deduction of (a) the premium or premiums unpaid for
the basic policy with interest thereon upto the date of death, on the same
terms as for revival of the Policy during such period and (b) the unpaid
premiums for the basic policy falling due before the next Policy anniversary.
Notwithstanding what is stated above, if at
least five full years' premiums have been paid in respect of this policy, and
any subsequent premium be not duly paid,
in the event of death of the Life Assured within 12 months from the first
unpaid premium, Basic Sum Assured will be paid after deduction of (a) the
premium or premiums unpaid for the basic policy with interest thereon upto the
date of death, on the same terms as for revival of the Policy during such
period and (b) the unpaid premium for the basic policy falling due before the
next Policy anniversary.
These provisions do not apply to LIC’s
Accidental Benefit Rider as it does not acquire any paid up value and the rider benefit cease to apply, if policy is in lapsed condition.
12. SURRENDER
VALUE:
The policy can be surrendered at any time during
the policy term provided atleast three full years’ premiums have been paid.
Guaranteed
Surrender Value:
The Guaranteed Surrender Value shall be a
percentage of total premiums paid (net of taxes) excluding any extra premiums
and premiums for riders, if opted for. This percentage will depend on the
policy term and policy year in which the policy is surrendered and is enclosed
as Annexure 3.
Special Surrender Value:
The Corporation may, however, pay Special
Surrender Value as applicable as on the date of surrender, provided the same is
higher than Guaranteed Surrender Value. The Special Surrender Value will be the
discounted value of Paid-up Sum Assured (as defined in Para 11). The discount
factors shall be the surrender value factors as provided in Table-1A of Special
Surrender Values booklet used for Endowment Assurance plan, and will depend on
the policy term and the duration elapsed since the commencement of the policy.
No Loyalty Addition is payable in case of surrender of
the policies.
LIC’s Accident Benefit Rider will not acquire any surrender value.
13. REVIVALS:
If premiums are not
paid within the grace period then the policy will lapse. A lapsed policy may be revived during the life time of the Life Assured, but within a period
of 2 consecutive years from the date of first unpaid premium and before the
date of maturity, on
submission of proof of continued insurability to the satisfaction of the
Corporation and the payment of all the arrears of premium together with
interest (compounding half-yearly) at such rate as fixed by the Corporation
from time to time.
Even though only
standard lives shall be eligible at NB stage, on revival of a policy
sub-standard lives shall also be considered based on underwriting decision.
The Corporation
reserves the right to accept at original terms, accept at modified terms or
decline the revival of a discontinued policy. The revival of discontinued
policy shall take effect only after the same is approved by the Corporation and
is specifically communicated to the Life Assured.
Revival of LIC’s
Accident Benefit Rider, if opted for, will be considered only along with
revival of the Basic Policy, and not in isolation.
14. LOAN:
Loan
facility is available under this plan, after payment of premiums for at
least 3 full years subject to following conditions:
a)
The maximum loan as a percentage of surrender
value shall be 70% in case of inforce policies and 60% in case of paid-up
policies.
b)
The rate of interest to be charged for the loan amount would be determined
from time to time by the Corporation.
c)
No foreclosure action under inforce
policies shall be taken under this plan even if there is a default in payment
of loan interest. However, any loan outstanding alongwith interest shall be
recovered from the claim proceeds at the time of exit.
15. UNDERWRITING,
AGE PROOF AND MEDICAL REQUIREMENTS :
U & R department,
Central Office, will issue instructions in this regard.
16. SUICIDE
CLAUSE:
This policy shall be
void
a)
If
the Life Assured (whether sane or insane) commits suicide at any time within 12
months from the date of commencement of risk, the Corporation will not
entertain any claim under this policy except to the extent of 80% of the
premiums paid excluding any taxes, extra premium and rider premiums, if any,
provided the policy is inforce.
b)
If
the Life Assured (whether sane or insane) commits suicide within 12 months from
date of revival, an amount which is higher of 80% of the premiums paid till the
date of death (excluding any taxes, extra premium and rider premiums, if any)
or the surrender value, shall be payable. The Corporation will not entertain
any other claim under such policy.
17. FORFEITURE
IN CERTAIN EVENTS:
In case of fraud or
misrepresentation, the policy shall be cancelled immediately by paying the
surrender value, subject to the fraud or misrepresentation being established by
the Corporation in accordance with Section 45 of the Insurance Act, 1938.
18. TAXES:
Taxes
including Service tax, if any, shall be as per the Tax laws and the rate of tax
shall be as applicable from time to time.
The
amount of tax as per the prevailing rates shall be payable by the Policyholder
on premiums including extra premiums and rider premiums, if any. The amount of
tax paid shall not be considered for the calculation of benefits payable under
the plan.
The
instructions regarding issues related to taxes will be issued by Finance &
Accounts Department, Central office, separately, as applicable from time to
time.
19. NORMAL
REQUIREMENTS FOR CLAIM:
The
normal documents which the claimant shall submit while lodging the claim in
case of death of the Life Assured shall be claim forms, as prescribed by the
Corporation, accompanied with original policy document, NEFT mandate from the
claimant for direct credit of the claim amount to the bank account, proof of
title, proof of death, proof of accident, medical treatment prior to the death,
School/College/employer's certificate, whichever is applicable, to the
satisfaction of the Corporation. If the age is not admitted under the policy,
the proof of age of the Life assured shall also be submitted.
Where
the policy results into a maturity claim or in case of surrender of a policy,
the Life Assured shall submit the discharge form along with the original policy
document, NEFT mandate from the claimant for direct credit of the claim amount
to the bank account besides proof of age, if the age is not admitted earlier.
20. COOLING-OFF
PERIOD:
If a Policyholder is not
satisfied with the “Terms and Conditions” of the policy, he/she may return the
policy sighting the reasons thereof to the Corporation within 15 days from the
date of receipt of the policy.
The refund of premium to the Policyholder shall be subject
to following deductions:
1.
Stamp
duty on policy;
2.
Proportionate
risk premium (in respect of Base Plan and Riders, if opted for) for the period
on cover as per C.O. Circular Ref: CO/ PD/ 39 dated 31st December,
2013
21. BACK-DATING
INTEREST:
The policies can be dated back within the same financial
year. Back-dating interest as applicable at the time of completion of the
policy (at the rate as fixed by the Corporation from time to time) will be
charged for the period in excess of one month. However, if the policy is back
dated to lean months, viz. April, May, July & August, interest is to be
charged for period in excess of three months. The period upto 14 days is to be
ignored and 15 days or more is to be rounded to a month for this calculation.
Any further instructions would be issued by
Actuarial Department, Central Office, as applicable from time to time.
22. POLICY
STAMPING:
Policy stamping
charges will be 20 paise per thousand of Basic Sum Assured & Accident
Benefit Sum Assured, if Accident Benefit rider is opted for, under this Plan.
23. REINSURANCE:
Normal
procedure for Reinsurance shall apply as per applicable Reinsurance Treaty.
24. ASSIGNMENTS/NOMINATIONS:
It should be ensured that a nomination is
made in the policy at the proposal stage as per Section 39 of Insurance Act,
1938. Further efforts should be made at the underwriting stage as well as on
subsequent registration so as to eliminate the possibility of
presence/involvement of moral hazard to a maximum extent. It should generally
be insisted that the nominee should be spouse, children or very close relative
of the Life Assured.
On a subsequent assignment as per Section
38 of Insurance Act, 1938 or change of nomination, the notice of assignment or
change of nomination should be submitted for registration to the office of the
Corporation, where the policy is serviced.
25. ACCOUNTING OF INCOME AND OUTGO:
Instructions regarding the accounting procedure to be
followed under the plan shall be issued separately by Finance & Accounts
Department, Central office.
26. PROPOSAL
FORM :
Specimen
proposal forms to be used under this plan are enclosed as Annexure - 4.
27. POLICY
DOCUMENT :
The specimen Policy
Document will be sent by the Corporate Communications Department, Central
Office.
28.
DISCLOSURES:
At the time of sale, a client specific Benefit Illustration shall be
provided to the Policyholder. Such Benefit Illustration shall be signed by both
the prospective policyholder and intermediary and shall form part of the policy
document.
Separate instructions shall be issued by Marketing Department, Central
Office, in this regard.
Executive Director (Marketing & Product Development)
Encl – Annexure
1, 2, 3 & 4
