The Magic of Jeevan Saral

1. The Magic of Jeevan Saral An insight into this unique plan of L.I.C. of India

2. Conventional plans Unit Linked plans Life insurance companies offer two types of plans

3. Conventional Plans • Positive features • Guaranteed return (extent of guarantee depends on type of product) • A smooth return over the term • Easy to understand and sell • Negative features • Less flexibility • Less liquidity

4. Unit Linked Plans • Positive features • Flexibility • Liquidity • More/less insurance cover can be chosen • Negative features • No or little guarantee • Uneven return • The policyholder has to review investment option all the time and should be lucky to exercise best option in order to earn a better return

5. Jeevan Saral - a plan with a difference Jeevan Saral is a unique plan which offers the best features of a conventional plan and a unit linked plan in one product itself

6. How is it different? • Instead of starting with Sum Assured you start by deciding how much premium you want to invest • Risk cover is same for all ages for a specific modal premium. i.e. For Rs.5000 p.a. the risk covered for age 20 as well as age 45 is the same

7. Salient Features of Jeevan Saral • A lot of guarantee • A smooth return over the term • Flexibility of term • A lot of liquidity • A higher cover, particularly for lower terms and higher entry ages

8. Salient Features of Jeevan Saral • Client has to decide • premium to be paid, and • Mode only • He/she can choose any term • No surrender penalty after 5 years • Participating – loyalty additions after 10 or more years

9. Salient Features of Jeevan Saral • Death Benefit • 250 times the monthly premium, plus • return of premiums excluding extra/rider premium and first year premium, plus • the Loyalty Additions, if any. • Maturity Benefit • Maturity Sum Assured, plus • the Loyalty Additions, if any.

10. Unique Feature In case of death claim, in addition to the Sum Assured payable on death, All Premiums Paid, (excluding the first year premium, extra premiums and premiums for rider benefits), will be refunded. This is the first time that such a feature has been introduced. The result is a continuously increasing Risk Cover from the second year onwards.

11. Is Jeevan Saral a With Profit Plan ? • YES. But bonus will not be declared each year as under other plans. • Only “Loyalty Addition” will be given after atleast 10 years of premium payments and duration. • This Loyalty Addition is payable even when a policy is Surrendered

12. Paid-up and Surrenders • Available after 3 years • No Surrender penalty after 5 years. • For e.g. if a 20 year is being surrendered after 12 years, it will be treated as if the policy was originally taken for a term of 12 years, and the maturity value corresponding to term 12 will be paid. • In this sense, Jeevan Saral can be called a Flexible Term plan.

13. Another Unique Feature • Partial Surrender • If you need money, you can partially surrender the policy • The premium will correspondingly reduce and thereby the associated benefits too. • This means that you can virtually break one policy into multiple policies • This also means that you can use this policy as a flexible Money back Plan.

14. Another Mega Benefit • There is a misconception that Loyalty addition is just a little sweetener and the main growth comes from bonus / G.A. • But it will not be so in the case of Jeevan Saral. Actuarial analysis will show that the actual L.A. that can be paid will not be less than the total regular bonus payable on death claim, surrender or maturity. • In fact the policy holder will stand to gain more due to this concept

15. Another Mega Benefit (cont.) • Reversionary bonus is declared after assessment of surplus. • On this surplus first a tax of 12.5% + 10% surcharge on tax and 2% educational cess, i.e. a total of 14% has to be paid. • Thereafter 5% is the government share • Then there is also a Solvency Margin provision to be made • The remainder is then distributed as bonus to the policy holders

16. Another Mega Benefit (cont.) • Loyalty Additions and Final Addition Bonuses are not based on assessment of surplus. • Hence there is NO TAX, NO GOVERNMENT SHARE AND NO SOLVENCY MARGIN PROVISION to be made. • The result naturally is substantially higher benefit to the policy holder

17. Standard Terms of this Plan • For a chosen premium, the level of benefits payable at maturity (The Maturity Sum Assured) will be quoted • Policyholder can choose term from 10 years to 35 years • Modes available – Yearly, Half-yearly, Quarterly & SSS

18. Minimum age at entry Maximum age at entry 12 years (completed) 60 years Maximum age at maturity 70 years Minimum term Maximum term 10 years 35 years Minimum premium for entry age 49 years or below Rs.250/- per month Minimum premium for entry age 50 years or above Rs.400/- pm The monthly premium should be in multiples of Rs.50/- Maximum Premium No Limit Eligibility Conditions

19. Rider Benefits • Accident benefit (optional) • Term Assurance Rider (optional) • Standard Term Assurance and AB rider Sums Assured limits apply • The Term Assurance and AB rider Sums Assured will not exceed the Death Benefit Sum Assured

20. Conditions for Partial Surrender • Atleast 3 years premiums are paid • Minimum basic annual premium after withdrawal - 3000/- where age at entry was 49 years or below and 4800/- where age at entry was 50 years or above • Minimum basic annual premium for withdrawal - 1200/-

21. Conditions for Partial Surrender • Withdrawal in multiples of - 600/- annual premium • Minimum waiting period between successive withdrawals - 1year • No loan should be o/s on the policy at the time of withdrawal • All future benefits and premiums under the policy will get reduced proportionately

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