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The company has introduced a new insurance-based plan, and that is the LIC New Money Back Plan-25 years. This plan provides death benefit as well as other benefits and is a participating non-linked plan.
Under this new plan, policyholder needs to pay premiums for 20 years for policy tenure of 25 years.
Unlike the pure life cover policy, the LIC new money back plan includes death benefits as well as other benefits namely the survival and maturity benefits and profit participation.
If the policyholder happens to meet with death at any time during the tenure of the policy when the policy is in force, then the company pays the beneficiaries of the policyholder the sum assured on death amount as well as the applicable bonuses which can be simple reversionary or additional type of bonuses.
The sum assured on death amount is 125 % of the basic sum assured or 10 times the annualized premium, whichever is more and is not lesser than 105% of the total premiums paid by the policyholder until the time of his/her demise (this is not inclusive of taxes on premium amounts and extra, and rider premium amounts if any)
The company pays to the survivor, survival benefits after completion of every five years of completion of policy till the 20 th policy year, i.e. the company pays survival benefits on the 5th, 10th, 15th and 20th policy years. The survival benefit amount is 15 % of basic sum assured for each completed five years of the policy.
This is the benefit amount the company pays to the policyholder at the culmination of the policy tenure, which is 40 % of the sum assured amount. Besides this, the company also pays the applicable bonuses which can be simple reversionary or additional type of bonuses.
Participation Profit Benefits
The new money back policy is a participative policy that is the policy participates in the profits of the company. Under participation benefits, the company pays the simple reversionary benefits whenever such benefits are declared by the corporation and the final additional bonuses when the policy culminates due to of death claim or upon its maturity.
Optional benefits are the benefits applicable to the rider options of the new money back policy. Policyholders may or may not choose to opt for these riders, and these are not included in the basic features of the plan. If policyholder feels that he/she needs cover for additional risks, then he/she may opt for these rider features, and these include the accidental death and accidental disability riders and can be opted along with the basic plan during any policy anniversary of the premium paying term of the policy by payment of the additional premium amount. In the case of the new money back policy, this means that policyholder can opt for rider benefits on any policy anniversary within 20 years of subscribing the policy as the premium paying term for this policy is 20 years though the policy tenure is 25 years.Death due to accident
If a policyholder who has opted for the accident benefit rider option happens to die during the tenure of the policy due to accident then his/her beneficiary will be paid the accident benefit sum assured amount as well as sum assured on death amount.Permanent disability due to accident
Accident risks also involve permanent disability risk besides the risk of death. If a policyholder having a policy with accident benefit rider option happens to meet with an accident due to which he/she becomes permanently disabled within 180 days of occurrence of the accident then the company shall pay the policyholder equal monthly installment amounts for ten years and the value of all these installment amounts will be equivalent to the accident benefit sum assured amount. Besides this, the policyholder will not have to pay further premiums for accident assistance sum assured along with a premium for a certain part of the basic sum assured, the amount of which is equivalent to accident benefit sum assured amount mentioned in the policy of the policyholder.
If a policy with accident benefit rider option is surrendered after attaining surrender value, then a part of the additional premium charged for providing cover after the premium payment term that is after 20 years of policy will also be refunded by us in case of permanent disability due to accident.
Eligibility criteria for the basic new money back policy include:
|Sum Assured||Minimum INR 1 lakh, no maximum limit|
|Entry Age||Minimum 13 years and maximum 45 years|
|Cover stoppage||70 years|
|Policy term||25 years|
|Premium term||20 years|
|Premium frequency||Monthly, quarterly, half yearly, yearly|
Specific Eligibility criteria for the Accidental death and disability rider in new money back policy include:
|Accident benefit sum assured||Minimum INR 1 lakh, maximum accident cover can be equal to basic sum assured amount but cannot exceed INR 100 lakhs including accident covers which might be included in the other existing policies of the policyholder.|
|Entry Age||Minimum 18 years, rider can be opted on any policy anniversary during the premium tenure of the policy|
|Cover stoppage||70 years|
Accidental Death and Disability Benefit Rider
The salient features of the new money back policy include
1. Participative non-linked policy
2. Death benefit
3. Survival and maturity benefits
4. Accidental death and disability benefit riders
5. Simple reversionary and additional bonuses
6. Tax savings under section 80 C of The Income Tax Act
7. Rebates on yearly and half yearly premium payment modes
8. Rebates on high basic sum assured
9. Policy acquires paid up value (not rider policies)
10. Policy acquires surrender value
11. Loans can be taken against policy
12. 15 days cooling period
13. 30 days grace period is provided (as per rules)
14. Policy can be revived if lapsed (as per rules)
New money back policy will be considered to being paid up when policyholder has paid premiums for three complete years, features of such a paid up value include:
1. Remains in force even if future premiums are not paid
2. Basic sum assured value is reduced in proportion and becomes paid up sum assured (if future premiums are not paid)
3. Reduced paid-up policies are not considered participative in future
4. Reduced paid-up policies have no survival benefits
5. Vested simple reversionary bonus continues to apply for reduced policies
6. Reversionary bonus and paid up sum assured is paid at maturity or death for reduced policies
A policyholder can surrender new money back policy for fulfilling cash requirements which might arise due to emergency situations. Only policies which have become paid up can be surrendered.
he company pays the following amounts upon policy being surrendered:
1. Guaranteed surrender value (GSV)
2. Applicable vested simple reversionary bonus (VSRB)
3. Special surrender value if so deemed by Corporation
GSV is a percentage of total premiums paid excluding premium amounts paid for rider options and extra covers. The percentage depends on the year of surrender, and the minimum percentage is 30 % (surrender upon completion of 3 years), the percentage increases as the year's increase.
VSRB is paid only if applicable, and its value is equal to the product of accrued bonuses and surrender value factor, the latter depends on the year of surrender and minimum (surrender upon completion of 3 years) is 15.28 %, the factor goes on increasing as years increase.
This includes cases for which the corporation refuses to pay the claimed amount and such cases includes suicide by policyholder within one year of subscribing policy. No benefits are payable; the corporation may decide to pay back a certain percentage of premium or surrender value as per rules and regulations. Likewise, there are several exclusions applicable for Rider policies as well.
Under the new money back policy, the company provides a cooling period of 15 days. This is the time given to subscribers to read the policy document thoroughly and clarify any doubts with us. If the subscriber is not in agreement with any of the terms and conditions of the policy document, then the policy may be returned during this cooling period upon which the policy will be cancelled. A returned policy cannot be subscribed again as per the rules and regulations.
The new money back policy can be subscribed by adult citizens and for minors as well. In the case of minors, the policy can be subscribed under the guardianship of an adult who can be parents or a legal guardian.
Documents for proof include age, identity, address and income proof, photograph and bank statement.