ACKNOWLEDGEMENT I would like to thank my project guide Prof .

, without whose invaluable support and continuous guidance this project would have been a pipe dream. She initiated me into this project and has been a constant source of inspiration and encouragement. I would also like to thank Prof.. for his valuable inputs and ideas. In the due course of making this project I gained a lot of knowledge that will definitely be of great use to me in the near future.

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INDEX Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Topic Executive Summary Introduction Life Insurance Introduction to Money Back Policy Benefits of Money Back Policy Premiums Riders Claims Most popular Money Back Policies in India Comparative Analysis Kotak Money Back plan Sahara Sampann Money Back plan LIC 20 YEARS Money Back plan Comparison Conclusion Webliography Pg. No. 3 4 9 11 14 17 19 26 28 30 31 34 38 41 48 50

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EXECUTIVE SUMMARY Insurance is basically sharing of losses. In Law and Economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurance is divided into life and non life. Money Back Policy is a form of life insurance cover. The project explains about the characteristics of Life Insurance. It focuses on various Money Back policies and their comparisons. The comparison contains various factors such as benefits in terms of surrender benefits, claim settlement amounts, bonus, rate of return, risk cover, tax benefits, rebate, etc. which are necessary for policy holder to check before deciding any policy.

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INTRODUCTION Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death, accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance. Insurance, in Law and Economics, is a form of risk management primarily used to hedge against the risk of contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Insurer is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice DEFINITION In the words of John Magee, Insurance is a plan by themselves which large number of people associate and transfer to the shoulders of all, risks that attach to individuals. HISTORY OF INSURANCE Insurance has been an institution of human society for thousands of years, having been practiced by Babylonian traders as long ago as the 2nd millennium BCE. Eventually it was given legal mention in the Code of Hammurabi, and practiced by early Mediterranean sailing merchants. The Greeks and Romans had benevolent societies which acted to care for the families and funeral expenses of members upon death.
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Guilds in the middle ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Insurance became much more sophisticated in post-Renaissance Europe, and specialized varieties developed. In America, Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire. The 19th century saw a rise in the government regulation of insurance, and the 20th century saw further specialization and, in the United States, a bit of deregulation that allowed other financial institutions, such as banks, to offer insurance. The ever-increasing ability of science to predict catastrophes of any measure or variety continues o affect the way insurance is conducted. CHARACTERISTICS OF INSURANCE Sharing of risks Cooperative device Evaluation of risk Payment on happening of a special event The amount of payment depends on the nature of losses incurred The success of insurance business depends on the large number of people insured against similar risk Insurance is a plan, which spreads the risk and losses of few people among a large number of people The insurance is a plan in which the insured transfers his risk on the insurer Insurance is a legal contract which is based upon certain principles of insurance which includes utmost good faith, insurable interest, contribution, indemnity, causes proxima, subrogation, etc. The scope of insurance is much wider and extensive.
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FUNCTIONS OF INSURANCE Provides protection: The primary function of insurance is to provide protection against the future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic losses, by sharing the risk with others. Collective bearing of risk: Insurance is a device to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. Assessment of risk: Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also. Provide certainty: Insurance is a device, which helps to change from uncertainty to certainty. Insurance is a device whereby the uncertain risks may be made more certain. Prevention of Losses: Insurance cautions individuals and business men to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. Prevention of losses causes lesser payment to the

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assured by the insurer and this will encourage for more savings by the way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured. Small capital to cover larger risks: Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of larger industries: Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery.

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LIFE INSURANCE AND SAVING As well as paying out a sum of money on death, many life insurance contracts also pay out a sum of money after a given time (in which case it is known as an endowment policy), and may also pay out a cash value if the policy is cancelled early. In many countries, such as the US and the UK, tax laws provide that the interest on this cash value is not taxable under certain strict circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death. Wealthy individuals buy life insurance policies as a means for avoiding income taxes and estate taxes. If the tax benefit exceeds the fees charged by the insurance company for maintaining the policy, then the policy serves as a life insurance tax shelter. There is much controversy surrounding this practice, and the financial industry is deeply divided about whether or not these practices work as advertised. Need of Life Insurance Risk hedging Tax saving Risk free Investment option Ideal advantage Better understanding of your needs High cover at low premiums Better fund management A dedicated team to handle your claims Timely reminders and collection of renewals
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Why Life Insurance? Risk cover: It is the most important aspect of Life Insurance. Unfortunately, most of us are not aware about our need for Life Cover resulting in hardships for the entire family in case of a sudden demise of the earning member. Risk cover should be the first priority followed by other benefits like Tax Saing and Investments. Tax saving: Its a crucial aspect of Life Insurance. Premium paid is exempt under sec 80 and claims or maturity benefits are also completely tax free under sec 10 (10) D. For futher details, please contact our Risk Managers. Savings: Life Insurance generates long term capital as against other tools of investment which are mostly short term oriented. It helps you better plan and achieve your long term financial goals.

INTRODUCTION TO MONEY BACK POLICY

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MONEY BACK POLICY plan is an excellent plan with good return on reinvestment, best suited for businessmen and professionals. Money is available at regular intervals in future to meet the specific expenses such as childrens education or marriage. At the same time, the policy provides insurance protection for the family as well as old age provision. This plan helps you plan for future anticipated expenses by paying periodic cash lumpsums to you at regular intervals. This plan also helps provide for the needs of your family in your absence by paying them the basic sum assured plus any bonus additions in the event of your unfortunate death during the term of the policy. In a money-back plan, you keep getting a percentage of the sum assured during lifetime of the policy. In case of the insurer outliving the term, he/she gets the remaining corpus with accrued options like bonus. In the event of his/her death before the full term of the policy, his/her nominee or legal heirs get the sum assured irrespective of the number of installments received, with accrued benefits. Money back plans are ideal for those who are looking for a product that provides both insurance cover and savings. You may also go in for this policy to utilize the tax-free sum of money receivable to visit your favorite holiday destination, maybe. Or perhaps you can r e-invest your amount. These are the costliest life insurance available in the market, mainly because there is a pay-back component build to it. You can choose to receive parts of your sum assured as pay backs at certain points in time in your insurance plan tenure. Insurers are bound to pay these sums no matter what happens; they need to make sure that

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the money is available to do that, so they invest a portion of your premium in instruments that earns them a return. Since such

investments come with risk attached, that risk is passed to you in terms of higher premiums. Money back policies can be used to provide yourself with ready cash at certain points in your life, be it college tuition or a holiday. Money back policies are part of every insurers product portfolio. Salient Features A policy where lumpsum amounts are paid to the life assured at periodic intervals on survival In case of death of the life assured within the term, the total sum insured is paid to the nominee, irrespective of earlier survival benefits Bonus is payable under this scheme Premiums are to be paid regularly to get survival benefits Premiums cease at death or on expiry of term whichever is earlier This plan can be availed of for terms 20 or 25 years. Restriction Minimum sum assured : Rs.40,000/ Minimum premium must be Rs.800/-p.a. Minimum age at entry : 13 years Maximum age at entry: o 20 years of policy : 50 years o 25 years of policy : 45 years Maximum maturity age : 70 years Bonus additions to the policy are calculated for full sum

BENEFITS
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Money back life insurance policies offer the dual benefits of insurance and redemption of money t regular intervals. These policies fit perfectly in the scheme of things of traditional savings, for people who seek financial instruments that provide insurance and savings elements, coupled with low risk element and guaranteed returns. It creates a long-term savings opportunity with a reasonable rate of return, especially since the payout is considered exempt from tax except under specified situations: On Death: Full sum assured is payable at death of the life assured within the term, without any deduction of earlier survival benefits. (E.g. suppose a person takes a Rs.1,00,000/- policy for 20 years. At the end of the 5th and the 10th year he receives Rs.20,000/each as survival benefit. If he happens to die in the 12th year, the nominee of the life assured will receive full Rs.1,00,000/-, irrespective of the earlier benefits of Rs.40,000/)

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 On Survival:
Term At the end of 5th year 10th year 15th year 20th year 5th year 10th year 15th year 20th year 25th year Amount of money back E.g., on a Rs.1,00,000 policy 20 years 20 years 20 years 20 years 25 years 25 years 25 years 25 years 25 years 20% of sum assured 20% of sum assured 20% of sum assured 40% of sum assured 15% of sum assured 15% of sum assured 15% of sum assured 15% of sum assured 40% of sum assured Rs.20,000/Rs.20,000/Rs.20,000/Rs.40,000/Rs.15,000/Rs.15,000/Rs.15,000/Rs.15,000/Rs.40,000/-

During the term of the policy, you receive a tax-free, fixed portion of the sum assured at regular intervals. On maturity, you receive the balance portion of the sum assured, if any, plus the bonus/profit/guaranteed addition for the term of the policy, if any, or the value of the investments accrued over the course of the policy term. Optional benefits are available with money-back policy You can add the following optional benefits to customize your policy to suit your needs: Critical illness (CI) Benefit provides an amount, equal to the sum assured chosen under this optional benefit, on diagnosis of any one of the 6 common critical illnesses. The sum assured is payable if you survive for 30 days after the date of the claim. Once such a claim has been met, no further Critical Illness Benefit is payable. However, your basic policy continues even after we pay a claim on this benefit. Additional Term Benefit (ATB) provides an additional
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amount, equal to the sum assured chosen under this optional benefit, in case of your unfortunate death. Accidental Death Benefit (ADB) provides an additional amount equal to the basic sum assured in case you die: o Due to an accident o Within 90 days of the accident o Waiver Of Premium (WOP) Benefit waives the premium for you in case you become totally disabled. The waiver is applicable during the period of total disability. o Grace Period: A grace period of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 5 days for monthly premiums. o 15 days Cooling-off period: If you are not satisfied with the Terms and Conditions of the policy you may return the policy to us within 15 days. o Revival: Subject to production of satisfactory evidence of continued insurability, a lapsed policy can be revived by paying arrears of premium together with interest within a period of 5 years from the due date of first unpaid premium. The rate of interest applicable will be as fixed by the Corporation from time to time.

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PREMIUMS Money back policies are the costliest traditional plans offered by insurance companies. This is because these plans return parts of the sum assured periodically, within the policy term. Another reason for the high premiums is that, if the insured dies even after getting 60% of the sum assured in the form of survival benefits, the family of the insured gets the full sum assured (despite the 60% of the sum assured already paid). The money-back plan provides life insurance cover for a specific period. During the term of the policy, the insured receives tax-free, fixed proportions of the sum assured at regular intervals. On maturity i.e. on surviving the entire term of the policy, the insured receives the balance portion of the sum assured, if any, plus the bonus/ participating profit/guaranteed addition for the term of the policy, if any, or the value of the investments. In the event of death of the insured during the term of the policy, the nominee sill receives the entire sum assured (even if the insured had received fixed portions of the sum assured), plus the bonus/participating profit/guaranteed addition, if any. The premium for money back policies is higher in comparison to endowment and term plans. If one purchases money back plans with guaranteed addition, the premium is even higher. Some companies offer an option in choosing the premium paying term. Money back policies are advisable if the insured wants a product that provide both insurance cover and savings. Many people prefer to buy such policies to utilize the tax-free sum of money receivables to go on a holiday, re-furnish their homes or even re-invest the same amount.
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However, there are other ways to utilize this income. A substantial part of the premium paid for money back plans is used by the insurance company to generate the bonus or profit paid to the insured or the nominee. If one chooses to impose self-discipline and invest regularly, other saving/investment avenues, such as mutual funds, offer higher returns.

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MONEY BACK RIDERS The term rider acts in the same manner as a term life insurance policy - if the insured were to die, the sum assured under the term rider is payable to the nominee. In the event of death of the insured, this rider provides for a payment equal to the sum assured or a pre determined term rider sum defined in the life insurance polic y. The term rider is a pure insurance product and is therefore a low-cost benefit. Insurance companies thus have a limit to the maximum sum assured under this rider Riders available for money back insurance: Critical illness Waiver of premium Accidental death and dismemberment Accelerated sum assured Partial and permanent disability Hospital cash

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Critical illness benefit rider takes care of unforeseen medical expenses

The Critical illness benefit rider will take care of your medical expenses in the event of a critical disease. The Critical Illness Benefit rider is a very useful rider to add to your life insurance plan. As per this rider, in the event of diagnosis of a critical illness during the term of the policy, an amount equal/less to the sum assured in the critical illness rider is payable to the insured. The diagnosed illness must be within the purview of the insurance company's defined categories of critical illnesses. Companies often have a maximum limit for this rider and a clause that states that benefits will be paid only if the disease has occurred after six or 12 months of commencement of the policy. If a claim is made under the rider, usually the benefit terminates and hence, no subsequent premiums are charged for this rider. Some policies specify that if the insured dies within two or three months of claiming the sum under critical illness benefit rider, the sum paid under the rider will be deducted from the death benefit.

Secure your child's future with the waiver of premium rider

Don't let an unfortunate event mar your child future. Protect it with this shield. This rider ensures that in the event the in sured is totally disabled due to an injury or sickness or critical illness, premiums are waived until the insured is able again.
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The biggest advantage of this rider is that if the insured is to die during the term of the life insurance policy, the policy remains in force, even during the Auto Cover Period. Premiums that have fallen due and not paid during the Auto Cover Period will also be waived. The Auto Cover Period is a term of two years during which full death cover continues even if the insured has not paid premiums subject to at least two full years' premiums having been paid. Let's look at an example - a person takes the Waiver of Premium rider on his life insurance policy. He pays all his premiums for the first three years. Subsequently, he defaults on his premium payments for the next year and a half. He then dies the next month. Under the Waiver of Premium rider, his life insurance policy remains in force. During this period, one or more premium installments with interest can be paid without submission of evidence of health. Usually, the premium paying term for the rider is throughout the benefit period but a few companies restrict the time frame to the policy owner attaining a particular age or for a maximum duration of 25 to 30 years. Accidental Death Benefit Rider Get an accidental bonus, here's how. If the insured is to die within the term of the life insurance policy, the nominee receives an additional sum equal to the sum assured, plus the sum assured amount. While insuring one's life, the insured can opt for the Accidental Death Benefit rider. In the event of death arising as a result of an accident during the term of the life insurance policy, an additional amount equal to the sum assured is payable to the nominee.
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Accidental Disability/Dismemberment Benefit Rider Safeguard yourself against disabilities, arising as a result of accidents, during the term of the insured's life insurance policy with Accidental Disability/Dismemberment Benefit rider. Insurance companies offer the Accidental Disability/Dismemberment Benefit rider in addition to the life insurance cover to provide against disabilities arising from accidents. In the event of total and permanent disability during the term of the policy due to an accident (within a specified period from the date of accident), an amount equal to or less than the rider sum assured is be paid to the insured. Payout terms and conditions vary from company to company: For example, some companies offer a disability benefit only in case of permanent disability. There are riders that offer permanent and partial disability benefit in the event of an accident. As per the latter rider, the insured receives 50 per cent of the sum assured in case of permanent partial disability and 100 per cent of the sum assured in case of permanent total disability. There are other riders too, that provide 25 per cent to 100 per cent of the sum assured, depending on the extent of dismemberment/disability. Sudden hospitalization? Solution: Hospital Cash Benefit Rider This benefit rider coupled with your life insurance will ensure that monetary issues do not bother you in event of unfortunate hospitalization for an ailment. The Hospital Cash Benefit rider comes in handy when the insured has a sudden hospitalization on his/her hands. In the event of hospitalization during the term of the life insurance policy, a daily hospital cash amount is payable to the insured if she/he is hospitalized for more than
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two/three days due to any injury, sickness or disease. The amount of reimbursement could be a proportion of the room charge in hospital or the eligible daily hospital cash amount, whichever is lower. Like the critical illness rider, insurance companies often have a maximum limit for the hospital cash benefit rider and a clause that states that benefits will be paid only if hospitalization occurs after two/three months of commencement of the policy. If this benefit is claimed along with the critical illness rider, the insurance company may no longer offer the hospital cash benefit rider to the insured and further premiums for this rider then would not be applicable. Exclusions If the insured person commits suicide, whether sane or insane, within one year from the date of commencement of a money back life insurance policy, the cover will become void, i.e. the nominee cannot claim the sum assured. Only the premiums paid up to the date of death will be refunded; after deducting the expenses incurred by the insurer for issuing the cover. Insurance is null and void if suicide is committed within a year Death claims are not payable under certain circumstances in case of life insurance. Although life insurance policies are taken in order to ensure that the nominee receives the sum assured (and other benefits, such as riders, bonuses etc.) on the death of the insured, there are quite a number of typical circumstances in which death claims are not payable. Some of these are: If the insured, whether sane or insane, commits suicide within 12 months from the date of issue of the policy or the date of any reinstatement of the policy.
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Let's assume that an individual's policy had lapsed due to premium nonpayment. He makes up the payment backlog to bring the policy back in force. Two months later, he commits suicide. The insurer will not be liable to pay the death claim to the nominee. If the insured has misrepresented facts, usually pertaining to health conditions, at the time of entering the insurance contract. However, an incontestable period (usually two years after the policy has been in force) is imposed. That is, once the policy has been in force for this period, the insurance company cannot nullify or void a policy on the basis that the policy holder had ma de any misrepresentation or omission, usually pertaining to health

conditions, at the time of entering into the insurance contract. The incontestable period clause does not affect the rights of the company in case there is any fraud involved. The onus of p roving fraud lies on the insurance company. In such cases, the only one to lose out would be the nominee/family of the insured who would be dragged through unnecess ary c omplic at ions at a t ime when t hey need all t he c alm and peace they can get. A misstatement of age clause is inserted by the company to protect itself against the insured wrongly stating her/his age. This doesn't void the policy, however. It still remains valid. In the event of the insured's death during the term of the policy, the death benef it is adjusted as per the actual age of the insured.

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MONEY BACK: CLAIMS The death of the insured needs to be informed to the insurance company either directly or through the insurance agent who sold the policy to the insured. Contact details are usually given on the insurer's official website. The insurance companies have death claim forms that need to be filled up and submitted to them along with a list of documents. If the insurer is satisfied with a claim, it pays the settlement; if there is doubt, the insurer may ask the claimant to submit more documents.

How to make a death claim ? In the event of death of the insured during the term of the life insurance policy, the nominee has to intimate the insurance branch. Thereafter, a claim form has to be filled and submitted to the office with the original policy documents and the death certificate. This entire process could take up time; ranging from a few weeks to three to four months, if all the paperwork is in place. In case of complications, it could take much longer

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Does a policy holder needs to claim maturity benefit or is it automatically payable? The claim amount is not automatically payable to you. You need to sign and send back a discharge form/voucher/claim form that is sent to you by the insurance company (usually, sent more than a month before the maturity date). Other formalities may vary from company to company. Once approved by the insurance company, the proceeds of the policy are sent by mail or electronically cleared by the company, depending on the choice you make.

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MOST POPULAR MONEY BACK POLICIES IN INDIA Life Insurance Corporation of India Jeevan Surahhi-15 Years Jeevan S urabhi-25 Years Jeevan Surabhi-20 Years The Money Back Policy-20 Years The Money Back Policy-25 Years Bima Bachat

Sahara India Life Insurance Co, Ltd. Sahara Sampann Shriram Life Insurance Co. Ltd. ShriNidhi Max New York Life Insurance Co. Ltd Life Paya Money Back Kotak Mahindra Old Mutual Life Insurance Limited Kotak Money Back Plan Reliance Life Insurance Company Limited. Reliance Cash Flow Plan

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Bajaj Allianz Life Insurance Company Limited Cash Gain SBI Life Insurance Co. Ltd SBI Life - Sanjeevan Supreme SBI - Money Back Tata AIG Life Insurance Company Limited Tata AIG Life Assure 21 years Money Saver Met Life India Insurance Company Ltd. Met Bhavishya Met Sukh

ING Vysya Life Insurance Company Ltd. Creating Life Money Back Plan Safal Jeevan Money Back Plan ICICI Prudential Life Insurance Co. Ltd Cash Back

Bharti AXA Life Insurance Company Ltd. Secure Confident

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MONEY BACK COMPARATIVE ANALYSIS : For the comparative analysis I have taken Money Back plans of 3 insurance companies. They are LIC, KOTAK MAHINDRA LIFE INSURANCE and SAHARA INDIA LIFE INSURANCE. I have compared KOTAK MAHINDRA'S MONEY BACK PLAN, SAHARA INDIA'S SAMPANN MONEY BACK PLAN and L1C'S 20 YEAR MONEY BACK PLAN.

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KOTAK MONEY BACK PLAN Overview The Kotak Money Back Plan offers the key benefit of cash lump sums at periodic intervals of five years, ensuring that you are able to meet any of your financial obligations. Such plan not only provide life cover but also entitle you to a guaranteed additio n and bonus on maturity. Money back plans like these not only let you enjoy regular cash flows during the policy term, they also get you a substantial life cover, which increases every year. The Kotak Money back Plan is ideal for you if...
You would like to receive cash lump sums at regular intervals to

plan for expenses like children's education, purchase of an asset or to meet any other unforeseen contingency.
You are looking for guaranteed additions to your money along

with a lump sum on maturity. You want a plan that offers you not just regular cash back and bonuses, but also a life cover that automatically increases each year. Advantages of the Kotak Money Back Plan
Cash lump sums at intervals of 5 years Guaranteed additions on maturity Death benefit increasing at 7% of sum assured at the end of

each year
Earn bonuses on the plan

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Key Features
Bonus

The premiums paid by you, net of charges are deposited in the Accumulation Account and the bonus declared is credited to this account at the end of each financial year. During the term of the plan, returns are earned on a compounding basis accumulating to create a substantial corpus for you. This bonus will be over and above the Guaranteed Addition you receive on maturity. Maturity Benefit This is a participating money back plan that has been designed to offer you cash at regular intervals of 5 year The table illustrates the Survival Benefits as a percentage of the sum assured.

Duration of the policy 5 yrs 10 yrs 15 yrs 20 yrs

Benefit in 20% 20% 20% 40%

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1. Increasing Death Benefit: We

realize that with increasing

inflation, you are concerned about the falling value of money and therefore the eroding value of your life cover. The Kotak Money Back Plan has been designed to take care of this concern of yours. The insurance - cover that you enjoy on the policy will automatically increase by 7% of sum assured at the end of each year so that your life cover can keep pace with the rate of inflation. What makes this future attractive is that while we increase your cover by 7% of sum assured each year, you are neither required to undergo any further medical tests nor does your premium commitment change. 2. Automatic Cover Maintenance: In case you miss some premium payment, the Automatic Cover Maintenance facility ensures the policy remains in force. This facility is available after the first three years. 3. Tax Benefits of Money Back Plans: Section 80C, 10(10D) of Income Tax Act, 1961 would apply. Premiums paid for Critical Illness Benefit qualify for a deduction under Section 80D. Tax benefits are subject to change in tax laws. You are advised to consult your tax advisor for details.

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SAHARA SAMPANN MONEY BACK PLAN This po lic y ret u rns you r m one y at regu lar i nt e r vals f or your rec urring financial requirements and also provides enhanced risk cover after of yo u r every 5 ye a r s t o take care

i nc r e as i n g r es p ons i bi l it ies . T h is p o li c y i s

available for terms 15 and 20 years only. This plan is suitable for "Safe" investors who get safety, returns & tax benefits in one package here. It is also suitable for those who want to accumulate funds for future investment opportunities. The details of Sahara Sampann are as follows: The minimum age of issue of the policy is 14 years. The maximum issue age for the policy is 55 years for 15 year term & 50 nearer birthday) years for 20 year term. The minimum sum assured for the policy is Rs 50,000/ There is no maximum limit for the sum assured. The polic y t erm of this plan is 15 and 20 years. The premium paying term is same as the policy term. The maximum maturity age of the policy is 70 years.
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What are the benefits of the policy ? On Survival - Following percentage of the Basic Sum Assured is payable. Duration of the policy 4 yrs 8 yrs 12 yrs 16 yrs 20 yrs Benefit in ok 20% 20% 20% .20% 20%

On maturity of the policy the bonus will be paid to the policy holder. On unfortunate death- the following percentage of the Basic Sum Assured along with attached bonus and terminal bonus (Terminal bonus is payable if death of the policyholder occurs after 15 years of the commencement of the policy) and policy is in full force.

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Duration of the policy (yrs) after commencement Up to 5 Years Above 5 and up to 10 years Above 10and up to 15 Years Above 15 and up to 20 years 100% 150% 200% 250%

Tax Benefit Premiums Paid under the policy are eligible for Income Tax Benefits under section 800 of the Income Tax Act 1961. The Maturity Proceeds of the policy are not taxed as income of the policy holder or his dependents under section 10(10d) on the incomeTax Act 1961.

If payment of premiums is discontinued If the premiums have been paid for at least 3 years the policy acquires paid-up value which is reduced Sum Assured in proportion to the premiums paid to premiums payable less survival benefits already paid.The attached bonuses remain with the policy but the policy does not participate in future profits. Exclusions The Company shall not be liable to pay any benefit under this Rider as stated above if the disability or the death of the life assured is caused either directly or indirectly, voluntarily or involuntarily by:
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1. attempted suicide or self inflicted injuries, while sane or insane, or whilst the life assured is under the influence of any narcotics substances or drug or intoxicating liquor ; or 2. engaging in aerial flights (including parachuting and skydiving ) other than as a fare paying passenger on a licensed passenger carrying commercial air craft (being a multi- engined air craft ) operating on a regular scheduled route; or 3. The life assured committing any breach of law; or 4. Engaging in hazardous sports /pastimes e.g. taking part in( or practicing for) boxing, caving, climbing , horse racing, jet skiing, martial arts, mountaineeringor 5. War whether declared or not or civil commotion ; or 6. Any pre-existing condition.

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LIC's MONEY BACK POLICY Table No. 75 (Money Back Policy with Profits - 20 Year Fixed Term)

This is a fixed term policy. The premium has to be paid till the end of the term or till the death of the policy holder whichever is earlier. A part of sum assured is paid to the policy holder once in 5 years. This benefit is called survival benefit. It is very important to note that the life risk cover continues for full sum assured even after payment of survival benefits to the policy holder . Also , the bonus is given on full sum assured. On the death of the policy holder before the term of the policy, the full sum assured along with accumulated bonus is paid to the nominee. On the other hand, if the policy holder survives till the end of the term, the amount of survival benefits already paid to him will be deducted from maturity value .

(S.A + Bonus - Survival Benefit). U n d e r t h is po l ic y, a pa rt f r om t he l if e r is k c ove r , t h e m on e y b ec o m es avail ab le at regular int e r vals . The a mou nt m y be us ed f or s hort t erm financial needs like, purchase of household durables or for children's education. Or the amount received as survival benefit can be re invested in any secured investment so that the policy holder will have a substantial lump sum amount at the end of the term of the policy.

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Benefits

Survival Benefits:

The following table explains the returns of survival of the policy holder till the ends of the term.

Period 5 years 10 years 15 years 20 years

S.B Amount 20% of Sum Assured 20% of Sum Assured 20% of Sum Assured 40% of Sum Assured + Bonus

Death Benefit: Sum Assured + Bonus, without any deduction or adjustment for the amount that may have been paid earlier by way of survival benefit.

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 Mode Benefit: The following table shows the rebate available on the mode of premium payment. Mode Yearly Half-Yearly Quarterly Rebate 3% of tabular premium 1.5% of tabular premium Nil

S u m As s u r e d B e n e f i t : The following table shows the rebate available on the sum assured. Sum Assured Up to Rs.50,000 Rs.50,001 to Rs.1,00,000 Rs.1,00,001 and Above Rebate Nil Rs. 1 Per Thousand Rs. 2 Per Thousand

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Features A money back policy with 20 years fixed term Minimum Sum Assured - Rs. 40,0001 No Maximum Limit Minimum age at entry - 13 years Maximum age at entry - 50 years Maximum age at maturity -70 years No medical examination is required if the conditions applicable under Non Medical Schemes are satisfied. Housing Loan available Age Proof Compulsory Life assured should be major at the time when first survival benefit will become due, in case he is a minor at the time taking insurance.

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COMPARISON

The following table shows the comparison between the three policies:

Particulars/ Features

Kotak Mahindra Sahara Sampann LIC Cash Back Plan

20

Yars

Money Back Plan

Features

It is a savings plan This with the

plan

is These are Moneytype plans provide

added suitable for Safe back investors who get assurance

advantage oflife

cover and regular safety, returns and that

cash inflow. This tax benefits in one financial protection plan is ideal for package here. It is against planning moments wedding, special also suitable for throughout death the

like a those who want to term of plan along your accumulate funds with the periodic future payments survival on at

childs education for or purchase of an investment

asset, etc. This is opportunities. a participating

specified durations during the term.

plan (with profits).

Premium paying term

Min 15, Max 25

Min 15, Max 20

Min 15, Max 20

Min.

4000

3486

6564

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premium (per 1 lakh)

Min. age

entry 18

14

13

Max. age

entry 60

55

50

Min. term

policy 15

15

20

Max. policy 25 term

20

20

Sum assured

Min, Max

Min50000, Max No Min 50000, Max no limit limit

Survival benefits years

100%

payout

+ After 4, 8, 12, 16 100% + bonuses and 20 years declared with the along final

in guaranteed addition

survival benefit

Survival Benefits

1st 20%, 2nd Duration 20%, 3rd 20%,

of

the % of sum assured after paid 5 20%, 10

policy (yrs)

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Percent

4th 40%

commencement 20%, 12 20%, 16 20%, 20 20%

20%, 15 20%, 20

Years 4 20%, 8 40% (maturity)

Max. age of 75 policy holder at maturity

70

70

Premium paying mode

Annually, annually,

Semi- Annually, annually,

Semi- Annually, annually,

Semi-

Quarterly, Monthly Quarterly, Monthly

Quarterly, Monthly

Death Benefits

In the unfortunate The event of

basic

sum The sum assured

death assured along with plus all bonuses to bonus date is payable in

during the term of attached the plan,

the and terminal bonus a lump sum upon

beneficiary would )terminal bonus is the death of the life receive the death payable if death of assured during the benefit. The death the benefit increases occurs policyholder policy after of term

15 irrespective of the the survival

by 7% of the sum years assured year.

each commencement of benefit/benefits This the policy) is in and paid earlier. full

increasing amount policy has been force.

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designed keeping in mind the rising inflation.

Guaranteed Bonus

On maturity, you All vested bonus Simple would receive the along with terminal reversionary sum survival bonus and of the bonus, benefit, applicable, addition payable. guaranteed if bonuses is declared thousand assured are per sum annually

addition.

at the end of each financial year.

Surrender value

On completion of After the policy has three year policy run and premiums years the policy have been paid for The policy may be acquires guaranteed surrender a at least 3 years. surrendered after it Higher of special has been in force value surrender value is for have guaranteed 3 years or The where more. guaranteed

provided all due payable, premiums

been paid on time. surrender value is surrender value is The guarantee equal to 30% of 30% of the basic value premiums years paid premiums paid (excluding the first excluding the first premiums years premium
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surrender

will be 30% of all premiums.

and

rider and

all

survival paid

premiums, if any). benefits In case any earlier. benefit

survival

has been paid or has payable premiums become the paid

prior to the due date survival paid or of last benefit payable

shall be excluded while calculating value. of

surrender Cash existing

value

attached

bonus will also be paid.

Accidental Death

This provides

benefit Accidental an benefit

death Accidental

death

available benefit available as

additional amount as an optional rider an optional rider (over and above the sum assured) to the beneficiary

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in the event of accidental death

of the life insured. The cover maximum available

under this benefit is equal to the basic assured to sum (subject of

maximum

Rs. 10 lakhs).

Maturity

The payout

maturity 100% of the sum 40% of the sum changes assured is paid. assured would be paid.

as per the tenure they are as

follows : 50% for 5 years, 40% for 20 years, 40% for 25 years.

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CONCLUSION Going by the above table it is clear that the insurance companies offering policies are almost providing all those types of features which like to consider while buying a policy. Unlike other policies, money back provides you benefits whenever you require. What makes these products even more attractive is that in the event of death of the policyholder at any time during the policy term, the death benefit is the full sum assured without deducting any of the survival benefit amounts, which may have already been paid as components. The following were the few differences from the above analysis: The above table shows that LIC's premium rate at Rs. 6564 is higher as compared to the premium charged by the other 2 companies Kotak Mahindra has a max entry age to buy a policy is 60 yrs which is useful for senior citizens planning to buy money back whereas LIC has the max age limit at 50 and Sahara has 55 The death benefits of Kotak Mahindra is better as compared to other 2 as death benefit automatically increases by 7 % of sum assured every year. money back

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Overall there isn't much difference between the policies except for the premium rates and few additional benefits.

India's money back plan is a superb long term plan through which you can fulfill all your needs and desires. This policy is also suitable for those investors who want to get those financial instruments on which they can easily get these policy as well as they can invest them anywhere without any worry. Before buying this policy one should keep in mind certain things, in which premium is on top of the list, it is recommended that the buyer should carefully check out the actual amount allocated towards the premium, how much of it is going to be accumulated and how much is the insurance company's charges. The most crucial aspect, they believe, is reading the terms and conditions thoroughly and understanding each clause well. You have to pay higher premiums in order to gain higher benefits in future but if you want to provide yourself and your family a better life then higher premiums shouldn't bother you in any way.

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WEBLIOGRAPHY: www.kotaklifeinsurance.com www.licindia.com www.saharalife.com www.apnainsurance.com

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