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Pension plans

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  • 1. Pension Plans Jeevan Akshay VIt is an Immediate Annuity plan, which can be purchased by paying a lump sumamount. The plan provides for annuity payments of a stated amount throughoutthe life time of the annuitant. Various options are available for the type and modeof payment of annuities.following options are available under planType of Annuity:* Annuity payable for life at a uniform rate.* Annuity payable for 5, 10, 15 or 20 years certain and thereafter as long asannuitant is alive.* Annuity for life with return of purchase price on death of annuitant.* Annuity payable for life increasing at a simple rate of 3% p.a.* Annuity for life with a provision of 50% of annuity payable to spouse duringhis/her lifetime on death of annuitant.* Annuity for life with a provision of 100% of annuity payable to spouse duringhis/her lifetime on death of annuitant.You may choose any one. Once chosen, option cannot be altered.Mode:* Annuity may be paid either at monthly, quarterly, half yearly or yearly intervals.You may opt any mode of payment of Annuity.Salient features:* Premium is to be paid in a lump sum.* Minimum purchase price : Rs.50,000/= or such amt which may secure aminimum annuity as under:
  • 2. Mode Minimum AnnuityMonthly Rs. 500 per monthQuarterly Rs. 1000 per quarterHalf-yearly Rs. 2000 per half yearYearly Rs. 3000 per year* No medical examination is required under plan.* No maximum limits for purchase price, annuity etc.* Minimum age at entry 40 years last birthday and Maximum age at entry 79years last birthday.* Age proof necessary.Annuity Rate:amt of annuity payable at yearly intervals which can be purchased for Rs. 1 lakhunder different options is as under:Incentives for high purchase price:If your purchase price is Rs. 1.50 lakh or more, you will receive higher amt ofannuity due to available incentives.Cooling-off periodIf you are not satisfied with “Terms and Conditions” of policy, you may returnpolicy to us within 15 days from date of receipt of Policy Bond. On receipt ofpolicy we shall cancel same and amt of premium deposited by you shall berefunded to you after deducting charges for stamp duty.Paid-up value:policy does not acquire any paid-up value.Surrender Value :No surrender value will be available under policy.Loan :No loan will be available under policy
  • 3. Section 41 of Insurance Act 1938 :* No person shall allow or offer to allow, either directly or indirectly, as aninducement to any person to take out or renew or continue an insurance inrespect of any kind of risk relating to lives or property in India, any rebate ofwhole or part of commission payable or any rebate of premium shown onpolicy, nor shall any person taking out or renewing or continuing a policy acceptany rebate, except such rebate as may be allowed in accordance with publishedprospectuses or tables of insurer: provided that acceptance by an insuranceagent of commission in connection with a policy of life insurance taken out byhimself on his own life shall not be deemed to be acceptance of a rebate ofpremium within meaning of this sub-section if at time of such acceptanceinsurance agent satisfies prescribed conditions establishing that he is a bona fideinsurance agent employed by insurer.* Any person making default in complying with provisions of this section shall bepunishable with fine which may extend to five hundred rupees. New Jeevan Suraksha-1These are Deferred Annuity plans that allow the policyholder to make provisionfor regular income after the selected term.PremiumsPremiums are payable yearly, half-yearly, quarterly, monthly or through Salarydeduction, as opted by you, throughout term of policy or till earlier death.Alternatively, premium may be paid in one lump sum (single premium).Tax Benefits:Tax relief under Section 80ccc is available on premiums paid under New JeevanSuraksha I (Table No.147). premiums paid under New Jeevan Dhara I (TableNo.148) qualify for tax relief under Section 88.
  • 4. Bonuses:These are with-profit plans and participate in profits of Corporation’s annuity /pension business. Policies get share of profits in form of bonuses. SimpleReversionary Bonuses are declared per thousand Sum Assured annually at end ofeach financial year. Once declared, they form part of guaranteed benefits ofplan. Final (Additional) Bonuses may also be payable provided policy has run forcertain minimum period.Death Benefit:On death of Life Assured during term of policy basic premiums paid, excludingany rider premiums or extra premiums, up to date of death accumulated withinterest at such rates as decided by Corporation will be payable to nominee.Currently, interest rate is 3%, 4% or 5 % if death occurs within first 10 years, 20years or thereafter respectively.Maturity Benefit:At maturity policyholder can encash up to maximum 25% of maturity proceedsas tax-free lump sum. balance should be compulsorily converted to an annuityat rates applicable at time of maturity of policy. policyholder has choice ofopting for any one of 5 annuity options. annuity options available are(i) annuity payable for remainder of life(ii) annuity payable for life with guaranteed period of 5, 10, 15 or 20 years(iii) Joint life and last survivor annuity to annuitant and his/ her spouse underwhich annuity payable to spouse on death of purchaser will be 50% of thatpayable to annuitant(iv) Life annuity with return of purchase price on death of annuitant(v) Life annuity increasing at simple rate of 3% per annum
  • 5. Supplementary/Extra Benefits:These are optional benefits that can be added to your basic plan for extraprotection/option. An additional premium is required to be paid for thesebenefits.Surrender Value:Buying life insurance contract is long-term commitment. However, surrendervalue is available on plan on earlier termination of contract.Guaranteed Surrender Value:policy may be surrendered after it has been in force for 2 years or more butbefore vesting date. guaranteed surrender value is 90% of basic premiums paidexcluding first year’s premium. In case of single premium policy guaranteedsurrender value is allowed after 2 years from date of commencement of policy.Corporation’s policy on surrenders:In practice, company will pay Special Surrender Value – which is equal to orhigher than Guaranteed Surrender Value. benefit payable on surrender reflectsdiscounted value of reduced claim amt that would be payable on death or atmaturity. This value will depend on duration for which premiums have been paidand policy duration at date of surrender. In some circumstances, in case of earlytermination of policy, surrender value payable may be less than total premiumpaid.Corporation reviews surrender value payable under its plans from time to timedepending on economic environment, experience and other factors.Note: above is product summary giving key features of plan. This is forillustrative purpose only. This does not represent contract and for details pleaserefer to your policy document.
  • 6. New Jeevan Dhara-IThese are Deferred Annuity plans that allow the policyholder to make provisionfor regular income after the selected termPremiums are payable yearly, half-yearly, quarterly, monthly or through Salarydeduction, as opted by you, throughout the term of the policy or till earlier death.Alternatively, the premium may be paid in one lump sum (single premium).Tax Benefits:Tax relief under Section 80ccc is available on premiums paid under New JeevanSuraksha I (Table No.147). The premiums paid under New Jeevan Dhara I (TableNo.148) qualify for tax relief under Section 88.Bonuses:These are with-profit plans and participate in the profits of the Corporation’sannuity / pension business. Policies get a share of the profits in the form ofbonuses. Simple Reversionary Bonuses are declared per thousand Sum Assuredannually at the end of each financial year. Once declared, they form part of theguaranteed benefits of the plan. Final (Additional) Bonuses may also be payableprovided policy has run for a certain minimum period.Death Benefit:On death of the Life Assured during the term of the policy the basic premiumspaid, excluding any rider premiums or extra premiums, up to the date of deathaccumulated with interest at such rates as decided by the Corporation will bepayable to the nominee. Currently, the interest rate is 3%, 4% or 5 % if the deathoccurs within the first 10 years, 20 years or thereafter respectively.Maturity Benefit:At maturity the policyholder can encash up to a maximum 25% of the maturityproceeds as a tax-free lump sum. The balance should be compulsorily convertedto an annuity at the rates applicable at the time of maturity of the policy. Thepolicyholder has the choice of opting for any one of 5 annuity options. The
  • 7. annuity options available are(i) annuity payable for remainder of life(ii) annuity payable for life with guaranteed period of 5, 10, 15 or 20 years(iii) Joint life and last survivor annuity to the annuitant and his/ her spouse underwhich annuity payable to the spouse on death of the purchaser will be 50% ofthat payable to the annuitant(iv) Life annuity with a return of purchase price on death of the annuitant(v) Life annuity increasing at a simple rate of 3% per annumSupplementary/Extra Benefits:These are the optional benefits that can be added to your basic plan for extraprotection/option. An additional premium is required to be paid for thesebenefits.Surrender Value:Buying a life insurance contract is a long-term commitment. However, surrendervalue is 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 2 years or more butbefore the vesting date. The guaranteed surrender value is 90% of the basicpremiums paid excluding the first year’s premium. In case of a single premiumpolicy the guaranteed surrender value is allowed after 2 years from the date ofcommencement of the policy.Corporation’s policy on surrenders:In practice, the company will pay a Special Surrender Value – which is equal to orhigher than the Guaranteed Surrender Value. The benefit payable on surrender
  • 8. reflects the discounted value of the reduced claim amount that would be payableon death or at maturity. This value will depend on the duration for whichpremiums have been paid and the policy duration at the date of surrender. Insome circumstances, in case of early termination of the policy, the surrendervalue payable may be less than the total premium paid.The Corporation reviews the surrender value payable under its plans from time totime depending on the economic environment, experience and other factors.Note: The above is the product summary giving the key features of the plan. Thisis for illustrative purpose only. This does not represent a contract and for detailsplease refer to your policy document. Jeevan NidhiLICs JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan. On survivalof teh policyholder beyond term of teh policy teh accumulated amt (i.e. SumAssured + Guaranteed Additions + Bonuses) is used to generate a pension(annuity) 4 teh policyholder. teh plan also provides a risk cover during tehdeferment period. teh USP of teh plan being teh pension can commence at 40years. teh premiums paid are exempt under Section 80CCC of Income Tax Act.a . Guaranteed Additions: Guaranteed Additions @ Rs.50/- per thousand Sumassured 4 each completed year, 4 teh first five years.b. Participation in profits: teh policy shall participate in profits of teh Corporationfrrom teh 6th year onwards and shall be entitled to receive bonuses declared asper teh experience of teh Corporation.c. Benefit On Vesting:1. Option to commute up to 1/3rd of teh amt available on vesting, which shallinclude teh Sum Assured under teh Basic Plan together with accrued GuaranteedAdditions, simple Reversionary Bonuses and Terminal Bonus, if any.
  • 9. 2 . Annuity as per teh option selected: Annuity on teh balance amt ifcommutation is exercised, otherwise annuity on teh full amt.d. Annuity Options:On vesting, teh annuity instalment, mode of annuity payment and type of annuitywhich shall be made available to teh Life Assured (Annuitant) / Nominee willdepend upon teh then prevailing Immediate Annuity plan of teh Life InsuranceCorporation of India and its terms and conditions.Currently teh following options are available under LIC’s immediate annuities:1. Annuity 4 life: teh annuity is paid to teh life assured as long as he/she is alive.2. Annuity Guaranteed 4 certain periods: teh annuity is paid to teh life assured 4periods of 5 or 10 or 15 or 20 years as chosen by him/her, whether or not he/shesurvives taht period. After teh chosen period, teh annuity is paid to teh lifeassured as long as he/she is alive.3. Annuity with return of purchase price on death: teh annuity is paid to teh lifeassured as long as he/she is alive. On teh death of teh life assured, teh purchaseprice of teh annuity is paid as death benefit. teh purchase price includes teh SumAssured under teh Basic Plan, teh accrued Guaranteed Additions and any accruedbonuses, excluding teh commuted value, if any.4. Increasing annuity: teh annuity is paid to teh life assured as long as he/she isalive. teh amt of annuity increases every year at a simple rate of 3% per annum.5. Joint Life Last Survivor Annuity: teh annuity is paid to teh life assured as longas he/she is alive. On death of teh life assured, 50% of teh annuity is payable toteh nominated spouse as long as teh spouse is alive.e. Death Benefit on death before annuity vests: On teh death of teh Life Assured
  • 10. during teh deferment period of teh policy, i.e. before teh annuity vests, an amtequal to teh Sum Assured under teh Basic plan along with teh accruedGuaranteed Additions, simple Reversionary Bonuses and Terminal Bonus, if any,will be paid in a lump sum to teh appointed nominee, provided teh policy is inforce 4 full Sum Assured. Nominee will also have teh option to purchase anannuity with this amt. LIC Market PlusThis is a unit linked pension plan wherein the pension is payable after a specifiedperiod. Four types of investment Funds namely Bond, Secured, Balanced andGrowth Fund are offered. Though primarily a Pension product, the plan has manyattractive features and options which make it an ideal Retirement solution for thefutureA)- On Vesting:On vesting of policy, Fund Value will be utilized to provide a pension based onthen prevailing Annuity rates. An option to commute upto one third of payablebenefit in a lump sum is available.B) On Death:In event of unfortunate death of policy holder Fund Value along with Riders, ifany, will be payable in a lump sum or as a pension.OPTIONSThree attractive benefits, viz. - Life Cover, Accident Benefit and Critical IllnessBenefit are available as options or riders. Life option is available within certainlimits depending on age at entry of life assured. other options are available to allproposers who have opted for Life Cover. quantum of risk covers can also bereduced; subject to minimum limits, once a year. A policy can be taken withoutany of riders also.REVIVALAn attractive feature of plan is that provided premiums have been paid for a
  • 11. minimum period of three years, all riders under policy will continue for a periodof two years from due date of first unpaid premium by deduction of relevantcharges from policy fund. This period of two years is called “Revival Period”.Further, if premiums have been paid for a minimum period of three years, revivalcan be effected merely by paying arrears of premium, within Revival Period.PAYMENT OF PREMIUMSPremiums can be paid in a lump sum (single premium) and also by monthly(ECS),quarterly, half-yearly and yearly modes.CHANGE IN FUND TYPE (SWITCH)plan also allows a policy holder to switch from one type of fund to another uptofour times a year, free of charge.OTHER FEAUTRESThere will be no spread between Bid and Offer price. Net Asset Value (NAV) willbe declared on a daily basis. Additional premium in multiples of Rs.1,000 can bepaid without any limit at anytime during term of policy.above information is only a gist of benefits/features of plan. For further detailsplease refer to sales brochure available with our agents/offices.