money back policy

Money Back Policy

About the Report The present study is titled as “A project report on Money Back Policies”. The study is made with special reference to LIC.

Objective of the study: • To study about the need for the Life Insurance. • To study about the Money Back Policies and its types. • Terms and Conditions of the study. • Advantages and Disadvantages of the study.

Index CH. 1

Topic

Pg.No

Introduction gives introduction to the topic and to the 5-11 report.

Money Back Policy

2 Gives an overview on LIC – A profile of the LIC.

12-19

3 Deals with theoretical view of the topic.

22-26

4 Deals with the different policies by LIC.

27-58

Concludes the project study.

59

5

Money Back Policy

CHAPTER-1 INTRODUCTION As a measure of providing protection against financial losses caused by the premature death of breadwinner, life insurance has no parallel or substitute. There are two primary reasons why people purchase life insurance. The better of the two reasons is to provide a death benefit (i.e., some degree of financial assistance to other persons – usually family members – when the insured dies). The other reason is to provide savings, particularly for retirement. Life insurance is often considered as the best estate planning “fuel”. It can provide liquidity, help in business planning (“key person” insurance), and provide substantial death benefits. The value for such purposes is calculated in a different way, under ‘business insurance’. The purpose of life insurance for most people is to protect their beneficiaries’ standard of living in the event of and timely death of a wage earner. Life insurance ensures that when the life assured dies, his beneficiaries will have the financial resources in place to protect the future income and pay for immediate and future financial obligations. Without life insurance to meet the deficit, families can be financially burdened or even devastated at the time of bread winners’ death.

Money Back Policy There are 4 main types of insurance policies: 1. 2. 3. 4.

Term insurance Whole life insurance Endowment Annuities

Money Back Policy TERM INSURANCE Term Insurance pays a death benefit to the legal heirs if the person insured, dies during the term of the policy. Such a policy provides cover for a specified period only and may be described as temporary insurance. Term insurance plans offer pure risk cover without any element of saving. Hence they are the most inexpensive. The sum assured is payable only if the insured dies during the selected period. In case the insured does not die during tenure of insurance, nothing is payable. Term insurance plans could be of the following different types: a) Level term insurance: - Under this plan there is a uniform

premium and benefit throughout the term of the policy. In the event of death anytime during the term the same sum assured is payable. Where the term is for over a year, the renewal premium is the same year. This policy plans is the most popular term insurance plan mainly because of its simplicity. It is an answer to neither a temporary need which neither increases nor decreases over that period. For e.g., a lump sum amount which is due at certain point time. b) Decreasing term insurance: - Under this plan the premium is

constant throughout the term but the benefit decreases over a period. Hence the amount payable on death depends on the timing of the death even though the premium being paid is constant. This plan is suited to cases where there is a temporary need which is reducing. For e.g. where a mortgage loan has to be repaid this reduces on a monthly or annual basis. c) Increasing term insurance: - Under this plan the premium as

well as the benefit increase periodically. Te increases could be

Money Back Policy at a fixed percentage or in line with an agreed index this plans is useful in keeping the benefits in line with the time value of money so that inflation does not erode the value of the benefits received. d) Renewable term insurance: - Though term insurance is for a

fixed period a renewable term policy gives the right to renew the policy without submitting fresh evidence of health. The new premium however is increased to reflect the increased age of the insured. e) Convertible term insurance: - Such a plan includes a

conversion privilege which gives Proposer the right to convert the policy to a permanent plan (endowment) without evidence of the health. If such an option is exercised the premium for the plan must be the standard rate for such a plan and the actual age of the life insured on the date of conversion of policy convertible policy are useful for people who have low income today and hence cannot afford to pay high premium in the initial years.

Money Back Policy

WHOLE LIFE INSURANCE Whole life insurance guarantees a death benefit cover throughout the course of life provided the required premiums are paid. The advantages of whole life insurance is that the policy if kept current covers you over your entire life as opposed to term insurance that covers you only for a certain term of years. Whole life insurance policies pay out on the death of the assured whenever it occurs. Premium may need to be paid throughout the life of the assured or a lesser limited period.

ENDOWMENT INSURANCE Pure endowment is a plan where the benefit is payable to the insured only on survival of the specified term. Combining the features of term assurance and pure endowment are endowment policies which out either on the death of the assured whenever it occurs or after a fixed number of years. Should the insured person survive the term of policy the policy said to mature. Hence the claim under an endowment policy may arise either by death or by maturity.

Money Back Policy ANNUITIES Annuities are a for of pension in which an insurance company makes a series of periodic payment to a person (annuitant) or his /her dependants over a number of years (term) in return for the money paid to the insurance company either in lump sum or in installment. Annuities start where life insurance ends. It is called the reverse of life insurance. Annuities stops on the death of a person where as theoretically life insurance starts on the death of the assured. Annuities are of two types•

Immediate annuity: - Immediate annuity begins at once or immediately on expiry of the designed period. Immediate annuity is purchased with a single premium called purchase price this type of typically purchased when a person reaches retirement age and has a lump sum to invest. If the person buying the annuity dies during his legal heirs or nominees get the remaining installment of the annuity.

•

Deferred annuity: - Under a deferred annuity plan the annuity payments to the annuitant commence at some specified time or specified age of the annuitant. This type of annuity can be funded either by a single payment or regular payments. The annuity payment starts after lapse of a selected period called the deferment period. Other the above the following two types of policies are also popular in India.

Money Back Policy Present Scenario The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent. Premium rates of most general insurance policies come under the purview of the government appointed Tariff Advisory Committee.

Money Back Policy

CHAPTER-2 LIC – A PROFILE The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non-Indian lives as Indian lives were considered more risky for coverage. With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It’s a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the country’s GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. Yet, nearly 80 per cent of Indian population is without life insurance cover, health insurance and non-life insurance continue to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This it self is an indicator that growth potential for the insurance sector is immense. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens the risk taking ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. The Insurance

Money Back Policy sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. With a large capital outlay and long gestation periods, infrastructure projects are fraught with a multitude of risks throughout the development, construction and operation stages. These include risks associated with project implementation, including geological risks, maintenance, commercial and political risks. Without covering these risks the financial institutions are not willing to commit funds to the sector, especially because the financing of most private projects is on a limited or non-recourse basis. Insurance companies not only provide risk cover to infrastructure projects, they also contribute long-term funds. In fact, insurance companies are an ideal source of long term debt and equity for infrastructure projects. With long term liability, they get a good assetliability match by investing their funds in such projects. IRDA regulations require insurance companies to invest not less than 15 percent of their funds in infrastructure and social sectors. International Insurance companies also invest their funds in such projects. Insurance is a federal subject in India. There are two legislations that govern the sector – The Insurance Act-1938 and the IRDA Act-1999.

Money Back Policy

INSURANCE IN INDIA The insurance sector in India has come as a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. A brief history of the Insurance sector The business of life insurance in India in its existing from started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life Insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Ltd., the first general Insurance Company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business.

Money Back Policy 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972: Nationalized the general insurance business in India with effect from 1st January. 1973: 107 insurers amalgamated and grouped into four companies’ viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

Money Back Policy

Life Insurance Market The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under-insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed. The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. The new business premiums of the 12 private players have tripled to Rs. 1000 crore in 2002-03 over last year. Meanwhile, state owned LIC’s new premium business has fallen. Innovative products, smart marketing and aggressive distribution. That’s the triple whammy combination that has enabled fledging private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers.

Money Back Policy The private insurers also seem to be scoring big in other ways – they are persuading people to take out bigger policies. For instance, the average size of a life insurance policy before privatization was around Rs. 50,000. That has risen to about Rs. 80,000. But the private insurers are ahead in this game and the average size of their policies is around Rs. 1.1 lakh to Rs.1.2 lakh-way bigger than the industry average. Objectives of LIC  Spread Life Insurance widely and in particular to the rural areas

and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost.  Maximize

mobilization

of

people’s

savings

by

making

insurance-linked savings adequately attractive.  Conduct business with utmost economy and with the full

realization that the moneys belong to the policyholders.  Act as trustees of the insured public in their individual and

collective capacities.  Meet the various life insurance needs of the community that

would arise in the changing social and economic environment.  Involve all people working in the Corporation to the best of their

capability in furthering the interests of the insured public by providing efficient service with courtesy.

Money Back Policy Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective. Members on the Board of the Corporation Shri. T.S. Vijayan (Chairman) Shri. D.K. Mehrotra (Managing Director - LIC) Shri. Thomas Mathew T (Managing Director - LIC) Shri. Vinod Rai, Secretary (Financial Sector), Department of Economic Affairs, Ministry Of Finance Shri. V.P.Shetty (Chairman, IDBI) Shri. R.K.Joshi (Chairman cum Managing Director, GIC) Shri. Amitav Kothari (Chartered Accountant ) Shri. Sunil Kant Munjal (MD & CEO, Hero Corporate Services Ltd.) Dr. Arvind Virmani (Principal Advisor, Planning Commission, Yojana Bhavan) Dr. A.Jayagovind (Director, National Law School of India ) Smt. Pushpa Girimaji (Social Activist) Dr. (Ms.) Swati Piramal ( Director, Nicholas Piramal Ltd.) Dr.Gautam Barua ( Director, IIT, Guwahati)

Money Back Policy

Money Back Policy, India Money back policy provides for periodic payments of partial survival benefits during the term of the policy, as long as the policyholder is alive. They differ from endowment policy in the sense that in endowment policy survival benefits are payable only at the end of the endowment period. An important feature of money back policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which may have already been paid as money-back components. The bonus is also calculated on the full sum assured.

Money Back Policy

CHAPTER 3 MONEY BACK POLICIES – A THEORITICAL VIEW The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era – past few centuries – yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society.

Money Back Policy Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Cooperative Assurance at Lahore were established in 1906. Inn 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912, made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on May accounts, putting the Indian companies at a disadvantage. The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-inforce as Rs.298 crore in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly.

Money Back Policy However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of and a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC has 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires as variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organization servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organization happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies.

Money Back Policy Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7 zonal offices and the corporate office. LIC’s Wide Area Network covers 100 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATTELITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. LIC continues to be dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year. From then to now, LIC has crossed many milestones and has set up unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families.

Money Back Policy The following are the objectives of the money back policy:  The primary purpose of the life insurance is to provide

replacement of income to the family and dependence on premature death of the bread winner.  Life insurance can also be used as regular saving cum

protection plan for meeting long term financial goals. While saving through other instruments as individual does not get the benefit of protection along with saving.  Through

insurance one can provide protection against

outstanding loan liability in the event of death.  Provisions for one’s own later years become increasingly

necessary,

especially

in

changing

cultural

and

social

environment. One can buy a suitable insurance policy, which will provide periodical payments in one’s old age.

Mission “Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development.”

Vision “A trans-nationally competitive financial conglomerate of significance to societies and Pride of India.”

Money Back Policy

SOME FREQUENTLY ASKED QUESTIONS BY INVESTOR What is Money Back Policy? Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, money back policies provide for periodic payments of partial survival benefits during the term of the policy, of course so long as the policy holder is alive. An important feature of this type of policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which may have already been paid as money-back components. Similarly, the bonus is also calculated on the full sum assured.

How is it beneficial to me? Under money back policies premiums can be paid as per the insurance company’s policy. These could be quarterly, half yearly or annually. The premiums for these policies are payable for the selected term of years, or till death if it occurs earlier. By buying such policies one can receive income at regular intervals other than the risk cover it provides. Also a good amount of bonus on the full sum assured is quite a good bargain. Who should buy this plan? Such plans are particular popular with individuals for whom income at regular intervals is a necessity in addition to an insurance cover. The minimum age is 12 years to be eligible for a Money-Back Policy.

Money Back Policy How does the money-back policy work? Site Ground has adopted the policy of refunding customers who decide to stop using our services within the first 30 days of having their shared Windows or Linux account with us. After the 30 days have passed (e.g. if you request service cancellation on day 31) we will only cancel your account. Please note that Virtual Private Servers are not covered by the Money Back Guarantee. Other excluded products are fees for dedicated servers (including setup fees), shared hosting account setup fees as well as ANY upgrades, extras or additional payments that have been done after the initial purchase. In case you are canceling a reseller account, we will subtract a $12 setup fee plus $8.95 for each of the registered domain names from your refund. SiteGround also reserves the right to keep a part of the domain name registration fee. The domain name itself remains your property, and you will be given access to a control panel, from which you are able to change nameservers (useful when changing hosts) and WHOIS information. Important notice: This text contains selected information regarding the 30 day money-back guarantee and only has informative character. For more details, please read carefully the Terms of Use for the respective product before purchase

Money Back Policy

CHAPTER 4 MONEY BACK POLICY WITH LIC Money back plans are a special type of endowment plans and are also called as anticipated endowment assurance plans. Under money back plans, survival benefits are spread over the term of the policy i.e., certain percentage of sum assured is paid at regular intervals. Apart from the above death benefit continues like an endowment plan i.e., full sum assured shall be payable on death within the term irrespective of earlier survival benefits.

I. Jeevan Surabhi Policy – Plan no.106 

Features:

This plan was introduced in Oct 92 by LIC and is a modified version of other money back plans offered by LIC. The difference between the other money back plans and Jeevan Surabhi plans are that: • Maturity term is more than premium paying term. • Early and higher rate of survival benefit payment. • Risk cover increases every five years. 

Special Features: Longer policy terms & limited premium paying terms as under: Plan No.

Policy Term

106

15 years

Survival benefits Survival Benefits At the end of 4 years At the end of 8 years At the end of 12 years At the end of 15 years

Premium Paying Term 12 years % of Basic Sum Assured 30 30 40 Bonus

Money Back Policy Maturity

15 years

 Death Benefits:

If death occurs at anytime during the term of a policy (provided the policy has been kept in force by payment of all premiums that had fallen due), the basic sum assured along with the vested bonus will be paid. The survival benefits already paid, if any, will not be deducted from this claim amount. An additional amount (depending on the duration of the policy) will also be paid on death under such a policy. The additional amounts payable, at various stages are shown in the table given below: Policy Parameters: Entry Age Sum Assured Term

Min 14 20000 15

Mode of Payment

Max Maturity Age

Yearly, half yearly, quarterly, monthly, salary saving scheme

70 Years

Max 55 No limit 12 Policy loan available No

 Suitable for:

This plan holds special interest to people who besides wishing to provide for their old age and family feel the need for lump sum benefits at periodical intervals.

Money Back Policy

II. Jeevan Surabhi Policy – Plan no. 107  Special Features:

Longer policy terms & limited premium paying terms as under: Plan No.

Policy Term

107

20 years

Survival benefits: Survival Benefits At the end of 4 years At the end of 8 years At the end of 12 years At the end of 15 years At the end of 18 years At the end of 20 years Maturity

Premium Paying Term 15 years

% of Basic Sum Assured 25 25 25 25 Nil Bonus 20 years

 Death Benefits:

If the death occurs at anytime during the term of a policy (provided the policy has been kept in force by payment at all premiums that had fallen due), the basic sum assured along with the vested bonus will be paid. The survival benefits already paid, if any, will not be deducted for this claim amount. An additional amount (depending on the duration of the policy) will also be paid on death under such a policy. Additional Amount to Be Paid in Case of Death for a Policy of Rs. 1000. Policy First 56th-10th 11th-15th 16th20th (Policy Years) (Policy Year) (Policy Year) (Policy Year) 107/20

Nil

500

1000

1500

Money Back Policy

Policy Parameters: Entry Age Sum Assured Term Mode of Payment

Min 14 20000 20 Max Maturity Age

Yearly, half yearly, 70 quarterly, monthly, salary saving scheme

Max. 50 No limit Policy available No

loan

 Suitable for:

This plan holds special interest to people who besides wishing to provide for their old age and family feel the need for lump sum benefits at periodical intervals.

Money Back Policy

III. 

Jeevan Surabhi Policy – Plan no. 108

Features: This plan was introduced in Oct 92 by LIC and is a modified version of other money back plans offered by LIC. The difference between the other money back plans and these plans is as follows: • Maturity term is more than premium paying term. • Early and higher rate of survival benefit payment. • Risk cover increases every five years.



Special Features: Longer policy terms & limited premium paying terms as under: Plan No. Term 108

Policy Term

Premium Paying

25 years

18 years

 Survival benefits:

Survival Benefits

% of Basic Sum Assured

At the end of 4 years

20

At the end of 8 years

20

At the end of 12 years

20

At the end of 15 years

20

At the end of 18 years

Bonus

Maturity

25 years

Money Back Policy  Death Benefits:

If death occurs at anytime during the term of a policy (provided the policy has been kept in force by payment of all premiums that had fallen due), the basic sum assured along with the vested bonus will be paid. The survival benefits already paid, if any, will not be deducted for this claim amount. An additional amount (depending on the duration of the policy) will also be paid on death under such a policy. The additional amounts payable, at various stages are shown in the table given below: Additional Amount To Be Paid In Caw Of Death For A Policy Of Rs.1000 Policy

First

56th-10th

11th-15th

16th-20th

21st-26th

(Policy Year) (Policy Year) (Policy Year) (Policy Year) 108/25

Nil

500

1000

1500

2000

Policy Parameters: Entry Age Sum Assured Term Mode of Payment

Min 14 20000 25 Max Maturity Age

Yearly, half yearly, 70 Years quarterly, monthly, salary saving scheme

Max 45 No limit 18 Policy available No

loan

 Suitable for:

This plan holds special interest to people who besides wishing to provide for their old age and family feel the need for lump sum benefits at periodical intervals.

Money Back Policy

IV.

Money back with profits – Policy – Plan no.75

 Features:

Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, this scheme provides for periodic payments of partial survival benefits as follows during the term of the policy, of course so long as the policy holder is alive.  Special Features:

In the case of a 12-year policy:  20% of the sum assured becomes payable each at the 4 th and

8th years, and the balance 60% plus the accumulated bonus at the end of the 12-year term.  Similarly, for a policy of 15 years: 25% of the sum assured is

payable each after 5 and 10 years, and the balance 50% of the sum assured together with the accumulated bonus at the end of the 15th year.  In the case of a 20-year Money-Back Policy: 20% of the sum

assured becomes payable each after 5, 10, 15 years, and the balance of 40% plus the accrued bonus become payable at the 25th year.  For a Money-back Policy of 25 years; 15% of the sum assured

becomes payable each after 5, 10, 15 and 20 years, and the balance 40% plus the accrued bonus become payable at the 25th year. An important feature of this type of policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit

Money Back Policy amounts, which may have already been paid as money-back components. The extra premium for this benefit is very reasonable and well worth it, unlike in the case of the whole life anticipated policy.  Survival benefits:

Period

Sum assured for 20 years term

5 Years 10 Years 15 Years 20 Years 25 Years

20 Percent 20 percent 20 percent 40 percent + Bonus -

Sum Assured for 25 years’ term 15 percent 15 percent 15 percent 15 percent 40 percent + Bonus

Policy Parameters: Entry Age Sum Assured Term Mode of Payment

Min 13 20,000 20 Max Maturity Age

Yearly, half yearly, 70 Years quarterly, monthly, salary saving scheme

Max 50 No limit 20 Policy available No

loan

 Suitable for:

This plan holds special interest to people who besides wishing to provide for their old age and family feel the need for lump sum benefits at periodical intervals. This plan meets with periodical needs although loans are not granted under this policy. A terminal bonus is granted though. The basic bonus under plan is slightly lower than the rate applicable to endowment assurances. During 1998-99, LIC issued 40.23 lakh policies under this scheme.

Money Back Policy

V.

New Money back – Policy – Plan no. 93

 Special Features:

Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, this scheme provides for periodic payments of partial survival benefits as follows during the term of the policy, of course so long as the policy holder is alive. For a Money-Back Policy of 25 years (Table 93), 15% of the sum assured becomes payable each after 5, 10, 15 and 20 years, and the balance 40% plus the accrued become payable at the 25th year. An important feature of this type of policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which may have already been paid as money-back components. Similarly, the bonus is also calculated on the full sum assured.  Survival benefits:

Period 92/20 Years At the end of 5 Years At the end of 10 Years At the end of 15 Years At the end of 20 Years 15 % Accrued Bonus At the end of 25 Years

 Permanent disability:

Benefit available •

Income-tax rebate

75/20 Years 20 % 20 % 20 % Balance 40 % + Nil

15 % 15 % 15 %

Balance 40 percent + Accrued Bonus

Money Back Policy •

Under section 88 on premiums paid.

•

100% Income tax free:

•

Permanent disability, maturity and death claims.

 Death Benefits:

Full sum assured + bonus irrespective of survival benefits taken Death before maturity. Natural: Payment of full Sum assured + accrued bonus. Accident: Payment of double the Sum Assured + Accrued bonus (Survival benefits already paid will not be deducted). Policy Parameters: Entry Age Sum Assured Term Mode of Payment

Min 13 20,000 25 Max Maturity Age

Yearly, half yearly, 70 Years quarterly, monthly, special saving scheme

Max 50 No limit 25 Policy available No

loan

 Suitable for:

This plan holds a special interest to people who besides wishing to provide for their old age and family feel the need for lump sum benefits at periodical intervals.

VI.

Jeevan Sanchaya Policy – Plan no. 123

 Features:

Money Back Policy This is a money back plan which is giving Guaranteed Addition as well as loyalty addition instead of participating in profits of LIC.  Guaranteed Addition:

The Guaranteed Addition @ Rs.70/- per thousand Sum Assured payable for each completed policy year (during which the policy was in force for the full Sum Assured) will be payable at the end of the term of the policy or earlier death of the life assured.  Loyalty Addition (Final Payment):

If the premiums are paid for at least 5 years, loyalty addition may become available along with claim payments. The rate of loyalty addition will be declared by the corporation depending upon the experience with regard to Mortality, Interest & Expenses and be based on integral number of years premiums paid.  Accident Benefit:

The Accident Benefit will be exclusively guaranteed under this plan, subject to a maximum of Rs.5, 00,000/- only.  Special Features: 

Accident Benefit:

Accident Benefit will be granted under this plan subject to the payment of additional premium of Rs.1/- per thousand S.A. subject to an exclusive limit of Rs.5, 00,000. The following additional benefits will accrue. On death due to accident during the term of the contract and provided the policy is in full force on the date of death an additional sum equal to the basic Sum assured will be payable. On disability due to accident, the basic sum assured will be paid in monthly installment spread over a period of 10 years starting from first of the month following disablement. Waiver of the premiums payable in future.  Survival benefits:

Money Back Policy Plan 123/12 % Of Sum Assured At the end of 4 years At the end of 8 years At the end of 12 years

20 20 60

On Maturity, the policyholder will receive the balance sum assured as given in the above table plus the guaranteed addition and loyalty addition (if any).  Death Benefits:

On death of the life assured during the term of the policy, the basic Sum assured is payable irrespective of survival benefits already paid. In addition to the basic Sum Assured, Guaranteed and Loyalty additions if any, as per provisions herein below are also payable. Policy Parameters: Min Max Entry Age 14 58 Sum Assured 25000 No Limit Term 12 Mode of Payment Max Maturity Age Policy available Yearly, half yearly, 70 years No quarterly, monthly, salary saving scheme.

loan

 Suitable for:

This plan holds special interest to people who besides wishing to provide for their old age and family feel the need for lump sum benefits at periodical intervals.

Money Back Policy VII.

Jeevan Sanchaya Policy – Plan no. 124

 Features:

This is a money back plan which is giving Guaranteed Addition as well as loyalty addition instead of participating in profits of LIC.  Guaranteed Addition:

The Guaranteed Addition @ Rs.70/- per thousand Sum Assured payable for each completed policy year (during which the policy was in force for the full Sum Assured) will be payable at the end of the term of the policy or earlier death of the life assured.  Loyalty Addition (Final Payment):

If the premiums are paid for at least 5 years, loyalty addition may become available along with claim payments. The rate of loyalty addition will be declared by the corporation depending upon the experience with regard to Mortality, Interest & Expenses and be based on integral number of years premiums paid.  Accident Benefit:

The Accident Benefit will be exclusively guaranteed under this plan, subject to a maximum of Rs.5, 00,000/- only.  Special Features: 

Accident Benefit:

Accident Benefit will be granted under this plan subject to the payment of additional premium of Rs.1/- per thousand S.A. subject to an exclusive limit of Rs.5, 00,000. The following additional benefits will accure. On death due to accident during the term of the contract and provided the policy is in full force on the date of death an additional sum equal to the basic Sum assured will be payable.

Money Back Policy On disability due to accident, the basic sum assured will be paid in monthly installment spread over a period of 10 years starting from first of the month following disablement. Waiver of the premiums payable in future.  Survival benefits:

Plan 123/12 % Of Sum Assured At the end of 5 years At the end of 10 years At the end of 15 years

25 25 60

On Maturity, the policyholder will receive the balance sum assured as given in the above table plus the guaranteed addition and loyalty addition (if any). Policy Parameters: Min Max Entry Age 14 55 Sum Assured 25000 No Limit Term 15 Mode of Payment Max Maturity Age Policy available Yearly, half yearly, 70 years No quarterly, monthly, salary saving scheme.

loan

 Suitable for:

This plan holds special interest to people who besides wishing to provide for their old age and family feel the need for lump sum benefits at periodical intervals.

Money Back Policy

VIII. Jeevan Sanchaya Policy – Plan no.124  Features:

Jeevan Sanchaya is a money back plan which is giving Guaranteed Addition as well as loyalty addition instead of participating in profits of LIC.  Guaranteed Addition:

The Guaranteed Addition @ Rs.70/- per thousand Sum Assured payable for each completed policy year (during which the policy was in force for the full Sum Assured) will be payable at the end of the term of the policy or earlier death of the life assured.  Loyalty Addition (Final Payment):

If the premiums are paid for at least 5 years, loyalty addition may become available along with claim payments. The rate of loyalty addition will be declared by the corporation depending upon the corporation’s experience with regards to mortality, interest & expenses and is based on integral number of years’ premiums paid.  Accident Benefit:

The Accident Benefit will be exclusively guaranteed under this plan, subject to a maximum of Rs.5, 00,000/- only. 

Special Features: Accident Benefit: Accident Benefit will be granted under the plan subject to the payment of additional premium of Re.1/- per thousand S.A. subject to an exclusive limit of Rs.5, 00,000. The following additional benefits will accure. On death due to accident during the term of the contract and provided the policy is in full force on the date of death an additional sum equal to the basic Sum assured will be payable. On disability due

Money Back Policy to accident, the basic sum assured will be paid, in monthly installment spread over a period of 10 years starting from first of the month following disablement.  Survival benefits:

Plan 125/12 % Of Sum Assured At the end of 5 years At the end of 10 years At the end of 15 years At the end of 20 years

20 20 20 40

On Maturity, the policyholder will receive the balance sum assured as given in the above table plus the guaranteed addition and loyalty addition (if any).  Death Benefits:

On death of the life assured during the term of the policy, the basic Sum assured is payable irrespective of survival benefits already paid. In addition to the basic Sum Assured, Guaranteed and Loyalty additions if any, as per provisions herein below are also payable. Policy Parameters: Min Max Entry Age 14 50 Sum Assured 25000 No Limit Term 20 Mode of Payment Max Maturity Age Policy available Yearly, half yearly, 70 years No quarterly, monthly, salary saving scheme.

loan

 Suitable for:

This plan holds special interest to people who besides wishing to provide for their old age and family feel the need for lump sum benefits at periodical intervals.

Money Back Policy

IX.

Jeevan Bharathi

 Features

Product summary This is a with-profits plan offered to women. It provides life insurance cover throughout the term of the plan along with the periodic payments on survival at specified durations during the policy term. The plan also provides the cover against affliction of certain Female Critical Illness and occurrence of certain Congenital Disabilities in newly born children. Premium: Premiums at yearly intervals are payable throughout the term of the policy or till earlier death. After at least two full years’ premiums have been paid, full insurance cover is available even when premiums are not paid for up to three years. Premium for congenital disability benefit ceases at policy anniversary after the life assured completes the age of 40 years. Guaranteed Additions during the first 5 years: During the first 5 years, Guaranteed Additions of Rs.50/- per Rs.1000/- Sum Assured will be added to the policy at the end of each completed year for which premium is paid. Bonuses after the first 5 years: This is a with-profit plan and participates in the profits of the Corporation’s life insurance business after 5 years. 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.

Money Back Policy Benefits  Death Benefit: The Sum assured plus all vested guaranteed

additions and bonuses is payable in a lump sum upon the death of the life assured during the policy term irrespective of the Survival Benefit paid earlier.  Survival/Maturity Benefit: The percentage of Sum Assured as

mentioned below will be paid on survival to the end of specified durations: % of SA paid on survival to the end of specifies duration Duration Policy Term 15 years 20 years 5 20% 20% 10 20% 20% 15 60% 20% 20 40%  Female Critical Illness Benefit: An amount equal to the Basic

Sum Assured (with a limit of Rs.2 lakhs) is paid on diagnosis of any of the specified critical illnesses.  Congenital Disability Benefit: An amount equal to 50% of the

Sum Assured (subject to a maximum of Rs.1 Lakh) will be paid on the birth, during the policy term, of a child with any of the specified congenital disabilities. This benefit will be available for two children. The cover will be provided where age at entry of life assured is 35 years or below, and will be available till the life assured attains 40 years of age.  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 benefits.

Money Back Policy  Surrender Value: Buying a life insurance contract is a long-term

commitment. However, surrender value are available under the plan on earlier termination of the contract.  Guaranteed Surrender Value: The policy may be surrendered

after is 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, any extra premiums and premiums towards Accident Benefit, Female Critical Illness Benefit and Congenital Disability Benefit.  Company’s policy on surrenders: In practice, the company will

pay a Special Surrender Value – which is equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender reflects 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 termination of the policy, the surrender value payable may be less than the total premium paid. The Corporation’s surrender value will be reviewed from time to time and may change depending on the economic environment, our experience and other factors. Note: The above is the product summary giving the key features of the plan. This is for illustrative purposes only. This does not represent a contract and for details please refer to your policy document.

Money Back Policy X.

Jeevan Rekha (Now Closed for Sale)

Product summary: This is a Money Back Whole Life plan. It provides financial protection against death throughout the lifetime with regular flow of survival benefits at five yearly intervals. Features  Premium:

Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deduction, as opted by you. The premium paying terms available are 5, 10, 15, 20, 25 years or for life. Alternatively, the premium may be paid in one lump sum.  Bonuses:

This is a with-profit plan and participates 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. A Final (Additional) Bonus may also be payable provided the policy has run for certain minimum period. Benefits 

Survival Benefits: 10% of the Basic

Sum Assured will be paid throughout your lifetime after every 5 years. First such payment will be paid after five years from the date of commencement.

Money Back Policy 

Death Benefit: The Sum Assured

along with all vested bonuses is payable in a lump sum upon the death of the life assured, whenever it occurs. 

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. 

Surrender

Value:

Buying

a

life

insurance contract is long-term commitment. However, surrender values are available on 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. In case of a single premium policy the guaranteed surrender value is 90% of the single premium paid. 

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 reflects the discounted value of the reduced claim amount that would be payable on death. 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 values payable may be less than the total premium paid. The Corporation reviews the surrender value payable under its

Money Back Policy 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. 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 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: Age at entry: 0 years, Premium Paying Term: 18 years, Policy term: 26 years, Sum Assured: Rs. 1, 00,000/-, Annual Premium: Rs. 7,281/-.

Money Back Policy End Total of premiums year paid till end of year 1 8,488 2 16,976 3 25,464 4 33,952 5 42,440 6 50,928 7 59,416 8 67,904 9 76,392 10 84,880 15 1,27,320 20 1,69,760 25 2,12,200 30 2,12,200 i)

The

Benefit on Death during the year (Rs.) Variable Total Guaranteed Scenario Scenario Scenario Scenario 1 2 1 2 0 2,00,000 0 2,00,000 0 2,00,000 0 2,00,000 20000 2,00,000 0 2,00,000 0 2,00,000 0 2,00,000 0 2,00,000 20000 2,00,000 20000 2,00,000 20000 2,00,000 20000 2,00,000 20000 2,00,000 above

2,800 5,600 8,400 11,200 14,000 16,800 19,600 22,400 25,200 28,000 42,000 72,000 90,000 1,08,000

illustration

is

15,800 31,600 47,400 63,200 79,000 94,800 1,10,600 1,26,400 1,42,200 1,58,000 2,37,000 4,20,000 5,25,000 6,30,000

applicable

73980 73980 73980 73980 73980 73980 145000 152500 160000 167500 205000 242500 287500 3,08,000 to

a

73980 73980 73980 73980 73980 73980 157000 168500 181000 193500 272000 370500 564500 8,30,000

non-smoker

male/female standard (from medical, life style and occupation point of view) file. 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 LIC 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.

Money Back Policy 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.

v)

The flow of benefits, in above illustrations, have been shown for first 30 years. In practice, the benefits will continue so long the policyholder survives.

Money Back Policy

XI.

Money Back with Profit

Features Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, this scheme provides for periodic payments of partial survival benefits as follows during the term of the policy, of course so long as the policy holder is alive. In the case of a 20-year Money-Back Policy, 20% of the sum assured becomes payable each after 5, 10, 15 and 20 years, and the balance of 40% plus the accrued bonus become payable at the 20th year. For a Money-Back Policy of 25 years 15% of the sum assured becomes payable each after 5,10,15 and 20 years, and the balance 40% plus the accrued bonus become payable at the 25th year. An important feature of this type of policies is that in the event of death at any time within the policy term, he death claim comprises full sum assured without deducting any of the survival benefit amounts, which have already been paid. Similarly, the bonus is also calculated on the full sum assured.

Money Back Policy XII.

Bima Bachat

Benefits What is Bima Bachat? LIC’s Bima Bachat is a money-back policy which offers financial security and assurance to the policy holder and his family. Bima Bachat requires the policy holder to pay only one premium. The amount paid for the premium depends on the duration of the policy taken and life insurance is available till the date of maturity. What other benefits do I receive during the specified duration of the policy?

For a term of 9 years: The policy holder will receive 15% of the sum assured at the end of every 3rd and 6th policy year.

For a term 12 years: The policy holder will receive 15% of the sum assured at the end of every 3rd, 6th and 9th policy year.

Money Back Policy

For a term 15 years: The policy holder will receive15% of the sum assured at the end of every 3rd, 6th, 9th and 12th policy year. What additional benefits do I get upon maturity? If the policy holder outlives the duration of the policy, at the time of maturity, a single premium payment (excluding extra premium) is made along with loyalty additions, if any. How much insurance do I get? The policy holder is insured for an amount equal to the sum assured.

What about the installment received already? The insurance cover is irrespective of the installments received. When am I eligible for the guaranteed surrender value? The guaranteed surrender value is available only after completion of at least one policy year. This value is equal to 90 % of the single premium paid (excluding extra premium).

Money Back Policy What other benefits does this insurance cover offer? Bima Bachat is the only money-back policy that offers a loan facility. The rate of interest for this will be determined from time to time by the corporation. Presently the rate of interest is 9% p.a. payable half-yearly. It also offers other benefits like the 15 day cooling off period, grace period and revival. Who is eligible for the policy? Are there other conditions or restrictions? The following are the requirements that one needs to be aware of before applying for this policy: The person applying for the policy should have completed 15 years and should not be older than 66 years. · The policy will mature when the person is 75 years old. · There is a choice of three terms to choose from (9, 12 and 15 years) for the policy depending on the age and requirement of the applicant. · The minimum sum that needs to be assured is Rs 20,000/- and there is no limit on the amount that can be assured. · It is important to note that the sum assured should be in multiples of Rs 5000/- only. · The policy requires the holder to pay a single premium.

Money Back Policy Premium Payment Single Premium The sample premium rates are as under: Age 15 20 25 30 35 40 45 50 55 60 65

Annual Premium per 1000 SA 9 12 716.40 771.35 717.20 771.85 717.55 772.25 718.45 773.35 721.05 775.75 725.80 780.25 734.10 787.60 746.60 797.90 762.65 811.95 784.80 831.30 816.25 -

15 804.00 804.40 804.95 806.10 808.55 812.95 819.60 828.95 841.75 859.35 -

Money Back Policy

What incentives do I get for a higher sum assured? Let’s take an example of a 30 year old with a Bima Bachat policy for 12 years. If the sum assured is Rs 45,000 then he has to pay a premium of Rs 34800.75. But for a sum assured amount of Rs 50,000 he will have to pay a premium of Rs 36734.13 only, thus getting a 5% rebate in premium. Refer to the table below for other rebate percentages: Less than Rs. 50,000 NIL Rs. 50,000 and Less than 5% Rs.1 lakh Rs. 1 lakh and Less than 7% Rs.2 lakh Rs. 2 lakh and above 8% Notes: i) The above examples are applicable to a *standard non-smoker male/female (*medical condition, lifestyle and occupation) 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.

Money Back Policy (Scenario 2) respectively. In other words, in preparing this benefit illustration, it is assumed that the Projected Investment Rate of Return that LIC 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 example 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.

The maturity benefit is the amount shown at the end of the policy term. 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 Extract

from

performance.” section

41

of

the

insurance

act:

(1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy nor shall any person taking out or renewing or continuing a policy accept any rebate except

Money Back Policy such rebates as may be allowed in accordance with the published prospectuses or tables of the insurer : provided that acceptance by an insurance agent of commission in connection with a policy of life insurance taking out by himself on his own life shall not be deemed to be acceptance the insurance agent satisfies the prescribed conditions establishing that he is a bona fide insurance agent employed by the insurer. (2) Any person making default in complying with the provisions of this Section shall be punishable with a fine which may extend to Rs.500 / Note: “Conditions apply” for which please refer to the policy document or contact our nearest branch office.

Money Back Policy

CHAPTER 5 CONCLUSION Life Insurance Company’s are expected to be meticulous with the risk classification as they deal with public monies. The underwriting tools play a pivotal role in placing the risks appropriate. The main risks that are premature death, disability and are excessive longevity. These risks may ruin an individual as well as hi/her dependents economically by causing the stoppage of regular income. Such a state is referred to as “Economic Death” of an individual. Protection through insurance may save an individual and his family from such an economic death. The concept of insurance is based on three

principles

economic,

legal

and

actuarial/mathematical.

According to the economic principle, the loss suffered by an individual is shared by a larger group who are facing the similar type of risk. The legal principle restricts the members of the risk pool to enjoy the benefit of having insurance coverage without violating the laws of the land. The actuarial/mathematical principle enables a life insurer to estimate the premium to be paid by each member in order to get the required level of protection on the basis of the risk class to which an individual belongs.

Money Back Policy

BIBLIOGRAPHY Books and Magazine 1. INSURANCE WATCH MAGAZINE 2. INDIAN FINANCIAL SYSTEM - BHARTI.V.PATHAK - Dr. G. RAMESH BABU 3. Mr. Kailash Bindal

4.

(Insurance Agent LIC)

WEBSITE:

1. www.licindia.com 2. www.google.com