The Magic of Jeevan Saral

An insight into this unique plan of L.I.C. of India

Life insurance companies offer two types of plans

Conventional plans
Unit Linked plans

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

Unit Linked Plans

Positive features

Flexibility Liquidity More/less insurance cover can be chosen 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

Negative features

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

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

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

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

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 Sum Assured, plus the Loyalty Additions, if any.

Maturity Benefit

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.

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

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.

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.

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

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

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

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

Eligibility Conditions
Minimum age at entry Maximum age at entry Maximum age at maturity Minimum term Maximum term Minimum premium for entry age 49 years or below
12 years (completed) 60 years

70 years 10 years 35 years Rs.250/- per month

Minimum premium for entry age 50 years or above

The monthly premium multiples of Rs.50/Maximum Premium should be in

Rs.400/- pm

No Limit

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

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/-

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

Agents Commission
Policy Term First Year 2nd & 3rd Yr 7.5% Thereafter

15 years & above 10 to 14 years

25%

5%

20%

7.5%

5%

Bonus Commission

40% of FY commission

Thank you