LIC’s Saral Jeevan Bima

LIC’s Saral Jeevan Bima Plan is a Non-Linked, Non-Participating,
Individual, Pure Risk Life Insurance plan which provides financial
protection to the insured’s family in case of his/her unfortunate death
during the policy term.
1. BENEFITS:
A. Death Benefit:
(i) During the Waiting Period of 45 days from the date of
commencement of Risk:
This Policy will cover death due to accident only during
the waiting period of 45 days from the date of commencement
of risk.
In case of death of the Life Assured other than due to
accident during the waiting period, an amount equal to
100% of all premiums received excluding taxes, if any, shall
be paid and the Basic Sum Assured shall not be paid.
In case of death of the Life Assured due to accident during
the Waiting Period and provided the Policy is in force, the
Death Benefit amount payable as a lump sum is:
(1) For regular premium or limited premium payment policy,
equal to Sum Assured on Death which is the highest of:
(a)10 times the Annualized Premium, or
(b)105% of all premiums paid as on the date of death, or
(c) Absolute amount assured to be paid on death.
(2) For Single premium policy, equal to Sum Assured on Death
which is the higher of:
(a) 125% of Single premium or
(b) Absolute amount assured to be paid on death.
(ii) After the expiry of Waiting Period of 45 days from the
date of commencement of Risk: On death of the Life Assured
after the expiry of Waiting Period but before the stipulated
Date of Maturity and provided the Policy is in force, the
Death Benefit amount payable as a lump sum is:
(1) For Regular premium or Limited premium payment policy,
“Sum Assured on Death” which is the highest of:
(a)10 times of annualized premium; or
(b)105% of all the premiums paid as on the date of death; or
(c) Absolute amount assured to be paid on death.
(2) For Single premium policy, “Sum Assured on Death” which is
the higher of:
(a) 125% of Single Premium or
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(b) Absolute amount assured to be paid on death.
Premiums referred above shall not include any extra amount chargeable
under the policy due to underwriting decision if any.
Absolute amount assured to be paid on death shall be an amount equal
to Basic Sum Assured.
B. Maturity Benefit:
No Maturity Benefit shall be payable on the Life Assured surviving the
stipulated Date of Maturity.
2. ELIGIBILITY CONDITIONS AND OTHER RESTRICTIONS
a) Minimum Basic Sum
Assured
: Rs. 5,00,000
b) Maximum Basic Sum
(The Basic Sum Assured
shall be in multiples of
Rs. 50,000/-)
: Rs. 25,00,000 per life basis
c) Minimum Age at entry : 18 years (Last Birthday)
d) Maximum Age at entry : 65 years (Last Birthday)
e) Maximum Maturity Age : 70 years (Last Birthday)
f) Policy Term
Single/Regular/Limited
Premium
:
:
No limit
[5 to 40] years
g) Premium Paying Term
Regular Premium
Limited Premium
Single Premium
:
:
:
:
Same as policy term
5 and 10 years
Premium is payable in lumpsum
3. PAYMENT OF PREMIUMS:
Regular Premium, Limited Premium and Single Premium payment
options are allowed under this plan. In case of Regular Premium
and Limited Premium payment option, the premium can be paid
regularly during the premium paying term with modes of premium
payment Yearly, Half-yearly or Monthly (through ECS/NACH only).
The premium payable will depend on the age at entry of the life
to be assured, policy term, premium paying term and sum assured
chosen.
4. GRACE PERIOD:
A grace period of 30 days shall be allowed for payment of yearly or
half-yearly premiums and 15 days for monthly premiums from the
date of First Unpaid Premium. During this period, the policy shall
be considered in-force with the risk cover without any interruption
as per the terms of the policy. If the premium is not paid before the
expiry of the days of grace, the Policy lapses.
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5. SAMPLE ILLUSTRATIVE PREMIUM:
The sample illustrative annual/single premiums for Basic Sum
Assured of Rs 5 lakh for Standard lives under Offline sales are as
under
(Amount in Rs)
Premium Payment Option Age=30 years, Policy Term=20
Regular 2095
Limited (PPT=10 years) 3010
Limited (PPT=5 years) 4955
Single 20310
The sample illustrative for Basic Sum Assured of Rs 10 lakh and
Policy Term 25 years for Standard lives under Offline/ Online sales
for different combinations are as under
Distribution Channel: Offline
Age$
Mode” Single Premium
Regular Premium Payment Option
Annual Half Yearly Monthly
25 41,610 3,850 1,965 331
30 52,260 4,670 2,383 401
35 70,840 6,110 3,117 525
40 98,630 8,340 4,254 716
45 1,38,230 11,660 5,948 1001
Distribution Channel: Online
Age$
Mode” Single Premium
Regular Premium Payment Option
Annual Half Yearly Monthly
25 40,776 3,574 1,826 308
30 51,213 4,336 2,216 373
35 69,421 5,675 2,900 488
40 96,655 7,749 3,959 667
45 1,35,463 10,837 5,536 932
The above premium is exclusive of taxes.
6. Rebates/Loadings:
The following rebates/loadings shall be applicable:
i. Mode Loadings (applicable for Regular and Limited Premium
payment):
Yearly mode – NIL
Half-yearly mode – 2% of Tabular annual premium
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Monthly (ECS/NACH) – 3% of Tabular annual premium
ii. High Sum Assured Rebate:
Basic Sum Assured (B.S.A) Rebate (Rs.)
5, 00,000 to 9, 50,000 Nil
10, 00,000 to 14, 50,000 0.10%o B.S.A.
15, 00,000 to 19, 50,000 0.20%o B.S.A
20, 00,000 and above 0.25%o B.S.A.
iii. Rebate under Online Sale:
Proposal to be completed under online sales without any assistance
of Agent / intermediary shall be eligible for rebate on tabular
premium at the following rates:
Premium Paying Term Online Sale (Rate of rebate)
Single Premium 2.00%
5 to 9 years 5.00%
10 to 14 years 6.00%
15 years and above 7.00%
7. Revival of lapsed Policies (Applicable for Regular and Limited
Premium policies):
If premiums are not paid within the grace period then the policy will
lapse. A lapsed policy can be revived within a period of 5 consecutive
years from the date of first unpaid premium and before the date of
maturity, as the case may be. The revival shall be effected on payment of
all the arrears of premium(s) together with interest at a rate which shall
be determined as follows:
The rate of interest applicable for revival of policies during the 12
months’ period from 1st May to 30th April, shall be compounding halfyearly rate not exceeding 10 year G-Sec Base/Par yield p.a. compounding
half-yearly plus 300 basis points. The 10 year G-Sec Base/Par yield shall
be as at last trading date of previous financial year.
Accordingly, for 12 months’ period commencing from 1st May, 2020 to
30th April, 2021, the applicable interest rate for revival shall be 9.50%
p.a. compounding half-yearly.
In addition to the arrears of premium with interest, proof of continued
insurability of the Life assured may be required for revival of the
discontinued policy. Proof of continued insurability is the information that
may be sought from the policyholder to decide revival of the policy. This
includes Form of declaration of Good Health, Medical Reports, Special
Reports and any such document as may be called for by the Corporation,
in accordance with the Underwriting Policy of the Corporation.
The Corporation reserves the right to accept at original terms, accept
with modified terms or decline the revival of a discontinued policy. The
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revival of a discontinued policy shall take effect only after the same is
approved by the Corporation and is specifically communicated to the
policyholder.
If a lapsed policy is not revived within the revival period (i.e. 5
consecutive years from the date of first unpaid premium) but before
the Date of Maturity, the policy will automatically terminate. In case of
Regular Premium policies, nothing shall be payable. However, in case of
Limited Premium Payment policies, the Policy Cancellation Value shall be
refunded and the policy will terminate.
8. Surrender Value:
Surrender value is not applicable under this Plan.
9. Policy Cancellation Value:
Policy Cancellation Value shall be payable:
a) upon the Policyholder applying for the same before the
stipulated date of maturity in case of Single premium Policy; or
b) upon the Policyholder applying for the same before the
stipulated date of maturity or at the end of revival period if the
policy is not revived, in case of Limited Premium Payment Policies.
c) The amount payable shall be as follows:
i) Single Premium Policies:
The Policy Cancellation Value acquires immediately after receipt of
Single Premium and is calculated as follows:
=70% ×Single Premium paid x Unexpired Policy Term
Original Policy Term
Single Premium shall be inclusive of any extra amount if charged
under the policy due to underwriting decisions.
ii) Limited Premium Payment Term: 5 years or 10 years:
The Policy Cancellation Value acquires if at least two (2) consecutive
full years’ premiums are paid and is calculated as follows:
=70% × Total Premiums Paid x Unexpired Policy Term
Original Policy Term
Total Premiums Paid shall be inclusive of any extra amount if charged
under the policy due to underwriting decisions.
d) No Policy Cancellation Value shall be payable in respect of
regular premium policies.
10. Policy Loan:
No loan will be available under this policy.
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11. Taxes:
Statutory Taxes, if any, imposed on such insurance plans by the
Govt. of India or any other constitutional Tax Authority of India shall
be as per the Tax laws and the rate of tax as applicable from time to
time.
The amount of applicable taxes as per the prevailing rates, shall
be payable by the policyholder on premiums including any extra
amount if charged under the policy due to underwriting decisions,
which shall be collected separately over and above in addition to the
premiums payable by the policyholder. The amount of tax paid shall
not be considered for the calculation of benefits payable under the
plan.
Regarding Income tax benefits/implications on premium(s) paid and
benefits payable under this plan, please consult your tax advisor for
details.
12. Free Look Period:
If the Policyholder is not satisfied with the “Terms and Conditions”
of the policy, the policy may be returned to Corporation within 15
days (30 days in case of online purchase) from the date of receipt
of the policy bond stating the reasons of objections. On receipt of
the same the Corporation shall cancel the policy and return the
amount of premium deposited after deducting the proportionate
risk premium for the period of cover and expenses incurred on
medical examination and stamp duty charges, within 15 days of
receipt of the request.
13. Suicide Exclusion:
a) Under Regular/Limited Premium Policy:
This policy shall be void if the Life Assured commits suicide at any
time within 12 months from the date of commencement of risk,
provided the policy is inforce or within 12 months from the date of
revival and the Corporation will not entertain any claim except for
80% of the premiums paid (excluding any extra amount if charged
under the policy due to underwriting decisions and taxes, if any) till
the date of death.
This clause shall not be applicable for a lapsed policy as nothing is
payable under such policies.
b) Under single Premium Policy:
This policy shall be void if the Life assured commits suicide at any
time within 12 months from the date of commencement of risk and
the Corporation will not entertain any claim except 90 % of the
Single Premium paid excluding any extra amount if charged under
the policy due to underwriting decisions and taxes, if any.
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SECTION 45 OF INSURANCE ACT, 1938:
The provision of Section 45 of the Insurance Act, 1938 shall be as
amended from time to time. The simplified version of this provision is
as under:
Provisions regarding policy not being called into question in terms of
Section 45 of the Insurance Act, 1938 are as follows:
1. No Policy of Life Insurance shall be called in question on any ground
whatsoever after expiry of 3 yrs from
a. the date of issuance of policy or
b. the date of commencement of risk or
c. the date of revival of policy or
d. the date of rider to the policy
whichever is later.
2. On the ground of fraud, a policy of Life Insurance may be called in
question within 3 years from
a. the date of issuance of policy or
b. the date of commencement of risk or
c. the date of revival of policy or
d. the date of rider to the policy
whichever is later.
For this, the insurer should communicate in writing to the insured
or legal representative or nominee or assignees of insured, as applicable,
mentioning the ground and materials on which such decision is based.
3. Fraud means any of the following acts committed by insured or by his
agent, with the intent to deceive the insurer or to induce the insurer to
issue a life insurance policy:
a. The suggestion, as a fact of that which is not true and which the
insured does not believe to be true;
b. The active concealment of a fact by the insured having knowledge
or belief of the fact;
c. Any other act fitted to deceive; and
d. Any such act or omission as the law specifically declares to be
fraudulent.
4. Mere silence is not fraud unless, depending on circumstances of the
case, it is the duty of the insured or his agent keeping silence to speak or
silence is in itself equivalent to speak.
5. No Insurer shall repudiate a life insurance Policy on the ground of
Fraud, if the Insured / beneficiary can prove that the misstatement was
true to the best of his knowledge and there was no deliberate intention
to suppress the fact or that such mis-statement of or suppression of
material fact are within the knowledge of the insurer. Onus of disproving
is upon the policyholder, if alive, or beneficiaries.
6. Life insurance Policy can be called in question within 3 years on the
ground that any statement of or suppression of a fact material to
expectancy of life of the insured was incorrectly made in the proposal or
other document basis which policy was issued or revived or rider issued.
For this, the insurer should communicate in writing to the insured
or legal representative or nominee or assignees of insured, as applicable,
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mentioning the ground and materials on which decision to repudiate the
policy of life insurance is based.
7. In case repudiation is on ground of mis-statement and not on fraud,
the premium collected on policy till the date of repudiation shall be paid
to the insured or legal representative or nominee or assignees of insured,
within a period of 90 days from the date of repudiation.
8. Fact shall not be considered material unless it has a direct bearing on
the risk undertaken by the insurer. The onus is on insurer to show that if
the insurer had been aware of the said fact, no life insurance policy
would have been issued to the insured.
9. The insurer can call 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 of age of life
insured. So, this Section will not be applicable for questioning age or
adjustment based on proof of age submitted subsequently.
[Disclaimer: This is not a comprehensive list of Section 45 of the Insurance
Act, 1938, and only a simplified version prepared for general information
Policyholders are advised to refer to Section 45 of the Insurance Act, 1938,
for complete and accurate details.]
Prohibition of Rebates (Section 41 of the Insurance Act,
1938 )
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 such rebate as may be allowed in accordance with
the published prospectuses or tables of the insurer.
2) Any person making default in complying with the provisions of this
section shall be liable for a penalty which may extend to ten lakh
rupees.