What are the benefits of paying your LIC premiums through net-banking/phone-banking? ECS Form Download

You as our policyholder:-

Can decide and authorize payments 24hrs a day * 7days a week because of anywhere & anytime access to internet.

Can issue payment instruction within the comforts of your home or office, and avoid personal visit to LIC branch

Will save time by not waiting in queues for making the payment.

Can avail the free service from LIC, as you don’t have to pay any charges to LIC or its authorized agencies for this additional benefit.

Can choose the bank account you want to pay from, any or all of your bank accounts can be registered with the service provider.

Can decide in advance the date on which you want your account to be debited.

Can choose to modify your instructions during the intervening time.

Will get reminders and alerts by email from the banks and service providers about the premium dues.

Can avoid expenses of postage/courier in sending the remittance to LIC.

Can avoid demand draft/pay order charges for outstation policy premiums.

Can also view your premium dues and other policy details

Which policies are eligible for payment of premiums thru this facility?

Policies which are being serviced in networked branches, or those policies which can be accessed through our MAN (Metro Area Network) or WAN (Wide Area Network).

Policies which are of ordinary mode of payment ie. Yearly (Yly), Half-yearly (Yly) or Quarterly (Qly).

Policies with mode of payments such as single premium, ordinary monthly (Mly) and Salary savings scheme (SSS) are not available for this facility.

Policies should reflect in-force policy status. Lapsed policies or policies due for revival are not valid.

What are the charges to be paid for availing this facility?

This facility is absolutely free for the policyholders of LIC.

LIC has agreements with the authorized banks/service providers wherein LIC will pay a mutually agreed charge per transaction on monthly basis. Customer will not be charged for availing this payment facility.

Which organisations are authorised to collect LIC premiums thru their net-banking/phone-banking facility?

Authorised Banks:- HDFC Bank, ICICI Bank, Bank of Punjab, UTI Bank, Global Trust Bank, Federal Bank, Corporation Bank, and Citibank

Authorised Service Providers (available only in select cities) :- BillJunction.com, Timesofmoney.com, and BillDesk.com.

Who can register with the authorised banks?

You as our policyholder having a bank account with any of the above-mentioned authorized banks in any of its branches in India.

You should have opted for the net-banking facility with the respective bank. Details of the same can be obtained from the respective bank thru its web-site. Downloadable forms are also available for new customers.

You should be able to access the net-banking account with the login & password provided by the bank.

For more details about net-banking, you may log on to the respective bank’s website.

Who can register with the authorised service providers ?

You as our policyholder having a bank account in any bank in the select cities where the above-mentioned service providers have their operations.

On being approached, the service provider obtains a written mandate from you, authorising him to realise the billed amount directly from your bank account. You may have to give the bank account details and other requisite details as required by the service provider.

In which cities do the authorised service providers operate from ?

BillJunction.com has its operations in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad & Pune.

TimesofMoney.com has its operations in Mumbai, Delhi, & Bangalore.

BillDesk.com has its operations in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Ahmedabad, Pune, Baroda & Surat. They also have tie-ups with their partner banks viz. Bank of Baroda, IDBI Bank, ABN-AMRO Bank.

How to add the policy details at the authorised bank/service provider’s web-site?

Using the login & password provided by the bank/service provider, you can log on to your account page at the bank/service provider’s website

You have to add LIC as biller with the policy details and other requisite information. In general, you would have to enter the policy number, the instalment premium, email-id and any other information. This is a one-time process for each policy.

Some of the service providers/banks’ web-sites have a demo page showing the process of adding the billers.

How does LIC acknowledge the registered policy details?

The bank/service provider sends these details to LIC for validation & confirmation of the registration data at pre-determined intervals.

LIC validates the registration data and informs the bank/service provider about the registration status. Since LIC’s database is de-centralized, generally it takes a week’s time for confirmation of registration data.

A consolidated database of registered policies is maintained by LIC. This database is updated at regular intervals on the basis of changes received from the original servicing branches.

LIC also sends auto-mailers to the registered policyholders informing the registration status.

When can I pay the insurance premiums?

On confirmation of the registration, LIC will regularly send the bills/invoices mentioning the due dates, premium amount, late fees, validity date, etc to the service provider/bank.

As and when premium becomes payable under the registered policy, LIC sends the bills to the bank/service provider, and the information will be displayed by the bank/service provider in your net-banking account page.

How to pay the insurance premiums through the banks/service providers?

You have to log on to the bank/service provider’s website.

On the web page, you have to signify the date on which you want your account to be debited and click the consent for the payment. You may even specify a particular account in case of multiple bank accounts.

The authorized Bank will debit your bank account, consolidate the payments and send the consolidated amount to LIC in form of bankers’ cheque / payorder.

The authorized service provider will send the instructions to the bank branch (as mentioned in your mandate form) through the RBI’s Electronic Clearance System and the bank will debit your account and credit the same to the service provider’s bank account, who’ll then remit the amount to LIC.

Some service providers have autopay facility (where you can issue standing instructions to the service provider to debit your account as when the bill becomes payable), or phone-banking facility (where the you can issue telephonic payment instructions)

How will the payment get accounted under the policy?

All consolidated payments from the Banks/Service providers are received at LIC, Branch 883 (under Mumbai Divisional Office – I), Yogakshema (West Wing), Ground Floor, Nariman Point, Mumbai-400 021.

Through batch processing in Internet module, premium transactions & renewal premium receipts are generated for each policy number.

Renewal premium receipts for the same are printed and dispatched by ordinary post.

Premium transactions pertaining to branches other than Branch 883 are sent to the respective servicing branch through the present network programs.

All unadjusted premium collections are refunded to the Service provider/bank.
Emails will be sent to the registered policyholders’ email-ids informing the status of the registrations/payments.

What are the important points to be noted for availing this payment facility?

Once registered for Premiums payments thru Net-Banking/Phone-Banking, you should avoid paying at cash counters, because there are many instances where payment for the same due-month is received twice.

Since renewal premium receipts are dispatched to the postal address as per your policy records, please ensure that your policy records are updated with your current address.

In case you have not received the renewal premium receipt, you may collect the premium paid certificate from the servicing branch of your policy. Duplicate receipts cannot be printed in any case.

Since we have de-centralized database structure, the collections are not adjusted online, the transaction has to reach the destination servicing branch of your policy for updation of the policy status. Hence there is short time-lag between the date of debit in your bank account and the date when the policy reflects the updated status. Unit Linked Insurance Polices (ULIPS)

Frequently Asked Questions (FAQs)
Unit linked guidelines were notified by IRDA on 21st December 2005. The main intent of the guidelines was to ensure that they lead to greater transparency and understanding of these products among the insured, especially since the investment risk is borne by the policyholder. It is the endeavor of IRDA to enable the buyer to make the most informed decision possible when planning for financial security. We hope the following FAQs will enable a better insight to all buyers about the character and features of Unit linked Products.
1. What is a ULIP?
ULIP is an abbreviation for Unit Linked Insurance Policy. A ULIP is a life insurance policy which provides a combination of risk cover and investment. The dynamics of the capital market have a direct bearing on the performance of the ULIPs. REMEMBER THAT IN A UNIT LINKED POLICY, THE INVESTMENT RISK IS GENERALLY BORNE BY THE INVESTOR.

2. What is a Unit Fund?
The allocated (invested) portions of the premiums after deducting for all the charges and premium for risk cover under all policies in a particular fund as chosen by the policy holders are pooled together to form a Unit fund.

3. What is a Unit?
It is a component of the Fund in a Unit Linked Policy. 4. What Types of Funds do ULIP Offer?
Most insurers offer a wide range of funds to suit one’s investment objectives, risk profile and time horizons. Different funds have different risk profiles. The potential for returns also varies from fund to fund. The following are some of the common types of funds available along with an indication of their risk characteristics.

Primarily invested in company stocks with the general aim of capital appreciation

Invested in corporate bonds, government securities and other fixed income instruments Sometimes known as Money Market Funds — invested in cash, bank deposits and money market instruments

5. Are Investment Returns Guaranteed in a ULIP?
Investment returns from ULIP may not be guaranteed.” In unit linked products/policies, the investment risk in investment portfolio is borne by the policy holder”. Depending upon the performance of the unit linked fund(s) chosen; the policy holder may achieve gains or losses on his/her investments. It should also be noted that the past returns of a fund are not necessarily indicative of the future performance of the fund.
6. What are the Charges, fees and deductions in a ULIP?
ULIPs offered by different insurers have varying charge structures. Broadly, the different types of fees and charges are given below. However it may be noted that insurers have the right to revise fees and charges over a period of time.
6.1 Premium Allocation Charge
This is a percentage of the premium appropriated towards charges before allocating the units under the policy. This charge normally includes initial and renewal expenses apart from commission expenses.
6.2 Mortality Charges
These are charges to provide for the cost of insurance coverage under the plan. Mortality charges depend on number of factors such as age, amount of coverage, state of health etc
6.3 Fund Management Fees
These are fees levied for management of the fund(s) and are deducted before arriving at the Net Asset Value (NAV) .
6.4 Policy/ Administration Charges
These are the fees for administration of the plan and levied by cancellation of units. This could be flat throughout the policy term or vary at a pre-determined rate.
6.5 Surrender Charges
A surrender charge may be deducted for premature partial or full encashment of units wherever applicable, as mentioned in the policy conditions.
6.6 Fund Switching Charge
Generally a limited number of fund switches may be allowed each year without charge, with subsequent switches, subject to a charge.
6.7 Service Tax Deductions
Before allotment of the units the applicable service tax is deducted from the risk portion of the premium.
Investors may note, that the portion of the premium after deducting for all charges and premium for risk cover is utilized for purchasing units

7. What should one verify before signing the proposal?

One has to verify the approved sales brochure for

• all the charges deductible under the policy

• payment on premature surrender

• features and benefits

• limitations and exclusions

• lapsation and its consequences

• other disclosures

• Illustration projecting benefits payable in two scenarios of 6% and 10% returns as prescribed by the life insurance council.

8. How much of the premium is used to purchase units?
The full amount of premium paid is not allocated to purchase units. Insurers allot units on the portion of the premium remaining after providing for various charges, fees and deductions. However the quantum of premium used to purchase units varies from product to product.
The total monetary value of the units allocated is invariably less than the amount of premium paid because the charges are first deducted from the premium collected and the remaining amount is used for allocating units.

9. Can one seek refund of premiums if not satisfied with the policy, after purchasing it?
The policyholder can seek refund of premiums if he disagrees with the terms and conditions of the policy, within 15 days of receipt of the policy document (Free Look period). The policyholder shall be refunded the fund value including charges levied through cancellation of units subject to deduction of expenses towards medical examination, stamp duty and proportionate risk premium for the period of cover.

10. What is Net Asset Value (NAV)?
NAV is the value of each unit of the fund on a given day. The NAV of each fund is displayed on the website of the respective insurers.

11. What is the benefit payable in the event of risk occurring during the term of the policy?
The Sum Assured and/or value of the fund units is normally payable to the beneficiaries in the event of risk to the life assured during the term as per the policy conditions.

12. What is the benefit payable on the maturity of the policy?
The value of the fund units with bonuses, if any is payable on maturity of the policy.

13. Is it possible to invest additional contribution above the regular premium?
Yes, one can invest additional contribution over and above the regular premiums as per their choice subject to the feature being available in the product. This facility is known as “TOP UP” facility.

14. Whether one can switch the investment fund after taking a ULIP policy?
Yes. “SWITCH” option provides for shifting the investments in a policy from one fund to another provided the feature is available in the product. While a specified number of switches are generally effected free of cost, a fee is charged for switches made beyond the specified number.

15. Can a partial encashment/withdrawal be made?
Yes, Products may have the “Partial Withdrawal” option which facilitates withdrawal of a portion of the investment in the policy. This is done through cancellation of a part of units.

16. What happens if payment of premiums is discontinued?

a) Discontinuance within three years of commencement – If all the premiums have not been paid for at least three consecutive years from inception, the insurance cover shall cease immediately. Insurers may give an opportunity for revival within the period allowed; if the policy is not revived within that period, surrender value shall be paid at the end of third policy anniversary or at the end of the period allowed for revival, whichever is later.

b) Discontinuance after three years of commencement — At the end of the period allowed for revival, the contract shall be terminated by paying the surrender value. The insurer may offer to continue the insurance cover, if so opted for by the policy holder, levying appropriate charges until the fund value is not less than one full year’s premium. When the fund value reaches an amount equivalent to one full year’s premium, the contract shall be terminated by paying the fund value.

17. What information related to investments is provided by the Insurer to the policyholder?
The Insurers are obliged to send an annual report, covering the fund performance during previous financial year in relation to the economic scenario, market developments etc. which should include fund performance analysis, investment portfolio of the fund, investment strategies and risk control measures adopted.
Disclaimer:
The above material is provided for general information only and do not constitute legal or other professional advice. This information is current at the date of publication but may be subject to change without notice and accordingly, may not be up to date at the time of viewing. Information specific to a product may be obtained from the concerned Insurer.

What is a term assurance?
Term assurances are the purest and cheapest form of insurance. Term assurances are plans where benefits are payable only on the death of the policy holder within the term.
What is whole life plan?
Whole life plans are a special type of term assurance wherein the term of the policy is whole of the life. So it follows that benfits under the policy are payable only on death of the policy holder.

What is an endowment assurance plan?
Endowment plans are among the most popular forms of insurance as they provide both insurance coverage and also act as a savings instrument. These are the plans wherein benfits are payable on death within the term or survival to maturity which ever is earlier.
What is money back plan?
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 benfits.

What is an assignment?
Assignment is a means whereby the beneficial interest,right and title under a policy gets transferred from the assignor to the assignee. ‘Assignor’ is the policy holder who transfers the title and ‘Assignee’ is the person who derives the title from the assignor.

When to assign a policy
Assignment can be made only after acquiring the policy. Assignment can be done only for consideration- for money or money’s worth or good, moral and meritorious consideration like, love and affection.

Procedure to assign a policy
Assignment can be done by mere endorsement on the policy or by a separate duly stamped deed. Assignment can be done by the proposer, policy holder, or the absolute assignee.

Pre-requisites for a valid assignment
Assignor must be a major. Assignor must have an absolute right over the policy. Assignment must be in writing. Assignor’s signature along with a witness is a must. Notice of assignment is to be submitted to the insurer.
Types of assignments
There are two kinds of assignments.
» Conditional Assignment
» Absolute Assignment

Conditional assignment is usually effected for consideration of natural love and affection. Absolute assignment is usually affected for valuable consideration.

The rights of an assignor and assignee
On assigning the policy, the assignor (life assured/policy holder) loses his right over the policy and the assignee gets the right and becomes the owner of the policy. The assignee can further re-assign the policy and he also has a right to sue under the policy.

A valid Assignment once made cannot be cancelled. It is only an another valid assignment the earlier assignment gets cancelled. In all the cases, Assignment automatically cancels the nomination. However, when the policy is assigned to the insurer, nomination gets affected and it does not get cancelled.

Under conditional assignment, if the conditional assignee dies,the benefit under the policy goes back to the life assured if surviving. otherwise, the benefit goes to policyholders nominee.Under absolute assignment, if the absolute assignee dies, the benefits under the policy goes to the legal heirs of the assignee.

What is nomination?
Nomination is the process of identifying a person to receive the policy money in the event of the death of the Policyholder.

When to nominate
Nomination can be done at the inception of the Policy by providing details of nominee in the proposal form. However, if the nomination is not done at the inception of the policy, the policyholder can nominate at a later date. This nomination has to be effected by giving notice in a prescribed form to the insurer and getting it endorsed on Policy Bond.

Change of Nomination
Change of Nomination can be done by the Policyholder any time during the term of the Policy and any number of times. For this, the policy holder has to give a notice in a prescribed form to the insurer and getting it endorsed at the back of the Policy. Further, Nomination can be removed any time by the Policyholder without giving prior notice to the Nominee.

Procedure for Nomination
Nomination can be done only by a policyholder who is a major holding Policy Bond in his own name. In the case of Children’s Policies, Nomination is not done until the Child becomes major.

Rights of a nominee
Under Nomination, the Nominee gets only the right to receive the policy money in the event of the death of the Policyholder. Nomination does not pass on the property in the Policy. If Nominee dies when the Policyholder is still surviving then the nomination would be ineffective. Nomination has no effect if the Policyholder is surviving. If Nominee dies after the death of the policyholder but before receiving policy money, then also Nomination becomes ineffective and money can be claimed only by the Legal Heirs of the Policyholder.

Can I take a loan on my policy ?
Policy holders are eligible to take loans on their policies subject to certain rules. The policyholder has to apply for a loan in a prescribed form and submit the Policy Bond with the form duly completed. The loan amount is calculated depending on the Surrender Value (SV) that the policy would have acquired, and approximately 85% of the Surrender Value is given as loan.
Rate of interest charged varies from company to company and time to time. A policy holder can repay the loan amount either in part or in full any time during the term of the Policy. If the loan amount is not repaid during the term of the Policy or early claim, the amount of loan plus interest, if any, will be deducted from the claim money and the balance amount will be paid to the claimant.

LIC is currently charging 10.5% interest payable half-yearly on Policy Loans. For LIC, the minimum repayment should be Rs. 50 and thereafter in multiples of Rs. 10. If the interest is not paid regularly every half year, then the interest is calculated on compound interest basis.

If the interest is not paid regularly every half year, then the interest is calculated on compound interest basis.

How can I revive a policy?
A policy gets lapsed if the premiums are not paid within the due date or the period of grace permitted by the insurance company. However, a lapsed policy can be revived and procedure varies from company to company.

In case of LIC a lapsed policy can be revived within 5 years from the date of first unpaid premium. There are five different schemes under which a policy can be revived.

Ordinary Revival Scheme : Under this scheme, all the arrears of unpaid premiums with interest have to be paid. Along with this, ‘Declaration of Good Health’ in Form No. 680 and medical certificate, if necessary, are required.

Special Revival Scheme : If a person is not in a position to pay all the arrears, then, he can choose this scheme. Under this scheme, the date of commencement will be shifted so that the policy is not lapsed just prior to the date of revival, i.e, the date of commencement is advanced approximately by the period of lapse. Other requirements like ‘Declaration of Good Health’ and Medical certificate wherever necessary are required as in Ordinary Revival.
Special Revival is allowed under the following conditions :
The policy should not have acquired any surrender value.

Revival should be within 3 years of lapse.
Special Revival is allowed only once during policy term.

Revival by Instalment method: If a policy holder cannot pay arrears in one lumpsum and if the policy cannot be revived under Special Revival Scheme, he can make use of Instalment Revival Scheme. In this scheme, on the date of revival he has to pay immediately:

» 6 months premiums, if mode is Monthly
» 2 quarterly premiums, if mode is Quarterly
» 1 Half year premium, if mode is Halfyearly
» Half of the yearly premium, if mode is Yearly
The balance of revival amount is paid in instalments spread over two years along with normal premium instalments. Other requirements regarding health are, as required in Ordinary Revival Scheme.
Loan-cum-Revival Scheme : If a policy acquires surrender value on the date of revival, the policy can be revived taking a policy loan. Loan amount will be calculated treating the premiums as paid upto the date of revival. Short fall, if any, in revival amount is called for. If loan amount is more than required for revival, the excess will be paid to the policy holder.

Survival Benefit-cum-Revival Scheme : The Survival Benefit which falls due in a money-back type of policy can be used for revival of the policy, if date of revival is later than the Survival Benefit due date. Here, if the SB amount is less than the revival amount, the short fall will be called for. If the SB is more than the revival amount, the excess is paid back to the policy holder. The other requirements for normal SB settlement and revival requirement are to be fulfilled.

What is the procedure in case of a lost policy?
The policy issued by the insurer is a valuable document and should be stored in a safe place till its maturity. In case the policy gets lost, destroyed or mutilated, then the policy holder must immediately procure a duplicate policy

The need to possess a duplicate policy arises on the following occasions:
» At the time of receiving Maturity Amount or Death claim.
»To obtain Surrender Value/Loan.
» To obtain a Duplicate Policy in other cases.

In case of LIC, the procedure involved to obtain the duplicate Policy under the above circumstances is as follows:

At the time of receiving Maturity Amount or Death claim :
Loss of Policy questionnaire must be duly filled by the policyholder.
» Indemnity Letter in Form No. 3815 A (unstamped) if the claim amount does not exceed Rs. 5,000 and no surety is required.
» Discharge Form is to be submitted.
» Form of Declaration of ‘No Assignment’ is to be submitted.
» A declaration by Surety having sound financial status, acceptable to LIC in appropriate Form is required, if the claim amount exceeds Rs. 5,000. To Obtain Surrender Value: Indemnity Bond in
» Form No. 3815 duly stamped and executed by the Policyholder along with Surety is to be submitted.
» Stamp Duty charges – which depends on the Surrender Value of the Policy are to be paid.
A declaration by the Surety having sound financial status acceptable to LIC is required.
Discharge form is to be submitted.

» Form of Declaration of ‘No Assignment’ is to be submitted.
To Obtain a Duplicate Policy in other cases :
» The Policy Document should have been really lost.
» If Assigned or Mortgaged the duplicate policy shall bear the latest Assignment that is in force as on the date of issue.
» Where the Policy is due for maturity or survival benefit within 3 years and if the sum assured is more than Rs. 25,000, on advertisement in a Local Daily /newspaper having wide calculation is to be given.
» Indemnity Bond in Form No. 3756 duly stamped and executed by the policy holder on a stamp paper of appropriate value is to be submitted.
» If sum assured exceeds Rs. 50,000, declaration by Surety having sound financial status acceptable to LIC in Form No. 3807 is required.
» Duplicate Policy charges of Rs. 5 are to be paid.
» Stamp Duty charges at prevailing rates are to be paid.

What are the Tax benefits available?
Important Income Tax provisions applicable to Policyholders are :
An individual can claim rebate on premium paid on his/her life, his/her spouse, his/her children including adult children and married daughter.

Under section 88 of the Income Tax Act, certain percentage of rebate is allowed on investment in the form of insurance premium with any of the insurance company approved by IRDA. Percentage of rebate can be up to a maximum of 20% and varies depending upon the tax bracket one falls. This rebate is deductible from the tax payable by the individual. The total amount of investment in the form of insurance premium and other specified investments like PPF, NSC, etc. is restricted to Rs. 60,000 per annum.

Under Section 80 DDA a deduction upto Rs. 40,000 p.a is allowed from gross total income, when a contribution or deposit is made with the LIC for the maintenance of a handicapped dependent.

Under Section 80 CCC a deduction up to a maximum of Rs. 10,000 per annum is allowed from gross total income.

Any sum received under insurance policy including maturity bonus etc., is non-taxable. The exceptions to this are Keyman Insurance, Jeevan Aadhar, Jeevan Dhara, Jeevan Akshay policies,
ICICI Pru Forever and Dhanaraksha scheme of LIC Mutual Fund.

What is surrender value?
The cash value payable by the insurance company on termination of the policy contract at the desire of Policyholder but before the expiry term is known as Surrender Value. A policy can be surrendered, provided the policy is kept in force atleast three years. The bonus will be added, provided the policy was in force for atleast 5 years, i.e., premiums should have been paid for 5 years and five years should have been completed from the date of commencement of the Policy (this condition is not applicable in respect to claims by death.)

How much life insurance should an individual own?
It is very difficult to place a monetary value on human life. Theoretically therefore an individual can have life policies for any amount. However, in practice, it is determined based on the needs for insurance and the capacity to pay premiums regularly. Though there is no thumb rule to arrive at the exact amount of insurance, it is determined by taking 6 times of the annual income of the person, if such income is not fluctuating. If the income is fluctuating it is desirable to work his average annual income and then determine the amount of insurance.From an individuals stand point one should be able to save atleast 10% of his annual income.

When does a policy acquire paid up value?
After payment of three years of premiums if subsequent premiums have not been paid under a policy, such a policy is said to have acquired a paid up value, though literally it is a lapsed policy. The paid up value is calculated by multiplying the sum assured by the ratio of number of premiums paid under the policy and the number of premiums payable under the policy. The value so arrived at, should not be less than Rs.250 excluding the accumulated bonus under such a policy. Such a reduced paid up policy will not be entitled to participate in future bonuses.
What is meant by “mortgage redemption policy”?
This life policy is designed to meet the requirements of individual borrowers to ensure that the outstanding loan is extinguished automatically in the event of the borrowers death. The annual premiums depend on the schedule of outstanding loan amounts at the beginning of each year. On death of the borrower the loan is liquidated straightaway by admittance of claim under the policy. Benefits are fixed and death benefit decreases with every year. Premium under the plan can also be paid in a lumpsum as single premium.
What is the benefit of opting riders/add ons??
Riders/add ons are the additional benefits which can be added to the basic policy by paying marginal additional premium. Each company has got their own set of rider and most common riders offers by insurers are:
» Term rider.
» Critical illness rider.
» Accidental death and dismemberment rider.
» Waiver of premium rider.

What is permanent total disablement?
Permanent total disablement means that the life assured is incapacitated to work or follow an occupation and obtain wages, compensation or profit.The following are considered to constitute such disability:
irrecoverable loss of entire sight of both of the eyes
» amputation of both hands
» amputation of both feet
» amputation of one hand and one foot
Is there any maximum limit in sum assured for grant of accident benefits? Maximum accident benefit one can avail under all the policies which he holds is fixed and varies from company to company In case of LIC it is Rs. 5 lakhs sum assured. Can an individual have accident benefit alone?
No, The benefit is available only along with a plan of assurance wherein it is permissible.

What is meant by a ‘with profit plan’?
A policy issued under a with profit scheme is eligible to participate for bonus addition arising out of surplus revealed on conducting an actuarial valuation. Premium under a with profit plan is always greater than the rate for a with out profit plan. that is while computing the structure of a premium table a bonus loading is made to the rate determined by the other three factors viz., Mortality, Interest and expenses.

At what intervals are actuarial valuations conducted?
Every year the policies that are in force are valued and the present value is arrived at. The assets are also valued as on that date and a comparison is made to ascertain the valuation surplus. 95% of the valuation surplus is distributed among with profit policy holders.

What is the system of bonus calculation?
LIC follows a system of reversionary addition to the sum assured at the rate per thousand of sum assured declared every year. Bonus vests with the policy if it is in force. Paid up policies are not eligible for bonus.