LIC's New Term Assurance Rider is an add on benefit. It is a type of plan which can be attached with a basic policy to provide add on benefit at a nominal cost. LIC's New Term Assurance Rider works as a protection plan which provides cover in case of the unfortunate death of the assured during the cover period. This rider can only be attached to non- linked plans at the time of commencement of the base policy. This term assurance rider not only works as a protection plan but also provides the benefit of savings as it can be added to savings plans. If the policyholder dies during the term of the policy, then the term assurance rider is paid. If the assured survives till the end of the term, then no amount will be given to the nominees or assignees. Life Assurance is a form of insurance providing for the payment of a specified sum to a named beneficiary on the death of the life assured.
On the survival of insured, till the end of the term of the rider, nothing paid.
In case of unfortunate death of the life assured during the term of the Rider, an amount equal to the Term Assurance Rider Sum Assured is paid to family of the assured.
The minimum entry age to avail this policy is 16 years (completed).
The maximum entry age is 60 years (nearest birthday).
Maximum cover ceasing age for the policy is 75 years (nearest birthday).
Term of this rider is 5 to 35 years.
Minimum Term Assurance Rider Sum Assured for this policy is Rs. 1,00,000.
Maximum Term Assurance Rider Sum Assured for this policy is Rs. 25,00,000.
Under this policy the maximum Term Assurance Rider Sum Assured should be less than or equal to the basic sum assured under the basic policy to which the plan is attached. But it should not exceed the overall limit of Rs. 25 Lakhs.
Mode of Premium Payment: Same as the basic policy to which the Rider is attached.
Mode rebate: Same as the basic plan
High Sum assured rebate: Nil
Like other basic plans a grace period of one month but not less than 30 days is allowed for the payment of yearly, quarterly, half-yearly rider premium and 15 days for monthly rider premiums.
This term assurance rider does not have any paid-up value.
No surrender value is available under this rider. However, on surrender of the basic policy to which this rider is attached, provided all the due premiums in respect of this rider have been paid, additional rider premium charged in respect of cover after PPT shall be refunded as follows:
Regular premium policies:
Nothing shall be refunded.
Limited premium paying policies:
Refund is onlypayable if full premiums have been paid for atleast first two consecutive years in case of premium paying term less than 10 years, first three consecutive years in case of premium paying term of 10 years or more. The amount to be refunded should be 75% of a value calculated based on duration elapsed in completed years as on date of surrender as well as on the Sum Assured, Premium Paying Term and Term of the Rider.
Single Premium policies:
The amount to be refunded should be 90% of single premium for the Rider multiplied by ratio of outstanding term to original term of the rider.
Subject to production of satisfactory evidence of continued insurability, a lapsed Rider can be revived along with basic policy by paying arrears of premium together with interest within a period of two years from the date of first unpaid premium but before cover ceasing age under the rider. The rider can only be revived along with the basic policy and not in isolation. The rate of interest applicable will be as fixed by the Corporation from time to time.
Taxes including Service Tax, if any, should be as per the Tax laws and the rate of tax should be as applicable from time to time.The amount of tax as per the prevailing rates should be payable by the policyholder on the premium including extra premium, if any. The amount of Tax paid should not be considered for the calculation of benefits payable under the rider.
If the policyholder is not satisfied with the “Terms and Conditions” of the Rider, the Rider may be returned to the Corporation within 15 days from the date of receipt of the policy stating the reason of objections. On receipt of the same the Corporation shall cancel the Rider and return the amount of premium deposited for this rider after deducting the proportionate risk premium till the date of receipt of returned policy document, charges for medical examination, special reports, if any on account of rider inclusion and stamp duty charges.
This rider can not be issued on stand alone basis and shall be attached with basic plan. Suicide claim provision as mentioned in the Basic Policy with regard to rider would apply.
Section 45 of the Insurance Act, 1938:
No policy of life insurance shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policyholder and that the policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.
Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life assured was incorrectly stated in the proposal.
Section 41 of the Insurance Act, 1938:
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 such rebate 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 taken out by himself on his own life shall not be deemed to be acceptance of a rebate of premium within the meaning of this sub-section if at the time of such acceptance the insurance agent satisfies the prescribed conditions establishing that he is a bonafide insurance agent employed by the insurer.
Any person making default in complying with the provisions of this Section shall be punishable with a fine which may extend to Rs.500 / -
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