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Jeevan Saral

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  • 1. The Magic of Jeevan Saral An insight into this unique plan of L.I.C. Golden Peacock Award winner in 2004 T.S.Rajan,Development Officer
  • 2. Popular L.I.C. Plans
    • Endowment (with & without profits)
    • Money back plans
    • Whole Life Plans (with & without profits)
    • Pension Plans (Immediate & Deferred Annuity)
    • Joint Life Plan
    • Term Assurance Plans…..
    T.S.Rajan,Development Officer
  • 3. Variants & Hybrids
    • Jeevan Mitra - double/triple cover end.plan
    • Jeevan Surabhi - variant of Moneyback
    • Jeevan Anand - Hybrid of End. & W.Life
    • Jeevan Rekha - Hybrid of W.Life & M-back
    • Jeevan Shree - Variant of Lim.Pay.End.
    T.S.Rajan,Development Officer
  • 4. Typical Pattern of these plans
    • Premium Rates are defined per 1000 sum assured
    • One has to decide on sum and term / Premium term. Accordingly the premium for his age is calculated.
    • The contract is for a predetermined period with survival benefits (if any) defined on specified dates. (e.g. 75/20, 14/25, etc.)
    T.S.Rajan,Development Officer
  • 5. Typical Pattern of these plans (cont.)
    • In most typical plans, reversionary bonuses / G.A. and FAB/LA are added to the policy and provided alongwith sum assured on maturity.
    • Surrendering early means losing money. But then that is the only way to liquidate cash. Otherwise raise loan against your policy.
    T.S.Rajan,Development Officer
  • 6. Unit Linked Policies
    • New trend in insurance selling
    • Premium is used for providing risk cover and investment in mutual fund units.
    • Growth comes through appreciation of NAVs. Hence quite dynamic in nature
    • If markets are down NAVs can also have negative growth. Hence risk of losing money too.
    T.S.Rajan,Development Officer
  • 7. Unit Linked Policies (cont.)
    • To effectively grow the money, policyholder must closely watch the trends of the market and keep switching between funds
    • Not many people have the expertise or the inclination to monitor their investments at frequent intervals.
    T.S.Rajan,Development Officer
  • 8. Jeevan Saral - a plan with a difference
    • Jeevan Saral is a unique plan which offers the best features of a conventional plan and a unit linked plan in one product itself
    T.S.Rajan,Development Officer
  • 9. How is it different?
    • Instead of starting with Sum Assured you start by deciding how much premium you want to invest
    • Riskcover is same for all ages for a specific modal premium. i.e. For Rs.5000 p.a. the riskcovered for age 20 as well as age 45 is the same
    T.S.Rajan,Development Officer
  • 10. Eligibility Conditions T.S.Rajan,Development Officer All age proofs acceptable Males & Females of all categories are eligible Rs.400/- per month Minimum premium for entry age 50 years or above NMS/NMG allowed All modes of payment except Single Premium & Monthly mode. Rs.250/- per month Minimum premium for entry age 49 years or below 10 years 35 years Minimum term Maximum term 70 years Maximum age at maturity 12 years (completed) 60 years Minimum age at entry Maximum age at entry
  • 11. Salient Features of Jeevan Saral
      • A lot of guarantee
      • A smooth return over the term
      • Flexibility of term
      • A lot of liquidity
      • A higher cover, particularly for lower terms and higher entry ages
      • Group premium
    T.S.Rajan,Development Officer
  • 12. Salient Features of Jeevan Saral
    • Client has to decide
      • premium to be paid, and
      • Mode only
    • He/she can choose any term
    • No surrender penalty after 5 years
    • With profits – loyalty additions after 10 or more years
    T.S.Rajan,Development Officer
  • 13. Salient Features of Jeevan Saral
    • Death Benefit
      • 250 times the monthly premium, plus
      • return of premiums excluding extra/rider premium and first year premium, plus
      • the Loyalty Additions, if any.
    • Maturity Benefit
      • Maturity Sum Assured, plus
      • the Loyalty Additions, if any.
    T.S.Rajan,Development Officer
  • 14. Unique Feature In case of death claim, in addition to the Sum Assured payable on death, All Premiums Paid, (excluding the first year premium, extra premiums and premiums for rider benefits), will be refunded. This is the first time that such a feature has been introduced. The result is a continuously increasing Risk Cover from the second year onwards. T.S.Rajan,Development Officer
  • 15. Is Jeevan Saral a With Profit Plan ?
    • YES. But bonus will not be declared each year as under other plans.
    • “ Loyalty Addition” will be given after atleast 10 years of premium payments and duration.
    • This Loyalty Addition is payable even when a policy is Surrendered or results into a death claim after 10 years.
    T.S.Rajan,Development Officer
  • 16. T.S.Rajan,Development Officer What is loyalty addition? How much will it be?
  • 17. T.S.Rajan,Development Officer Loyalty Addition
    • With profit
    • Identical to bonus
    • 165, 174, 179
    • Without profit
    • Meager amount
    • 111, 150
  • 18. Another Mega Benefit
    • There is a misconception that Loyalty addition is just a little sweetener and the main growth comes from bonus / G.A.
    • But it will not be so in the case of Jeevan Saral. Actuarial analysis will show that the actual L.A. that can be paid will not be less than the total regular bonus payable on death claim, surrender or maturity.
    • In fact the policy holder will stand to gain more due to this concept
    T.S.Rajan,Development Officer
  • 19. Another Mega Benefit (cont.)
    • Reversionary bonus is declared after assessment of surplus.
    • On this surplus first a tax of 12.5% + 10% surcharge on tax and 3% educational cess, i.e. a total of 14.1% has to be paid.
    • Thereafter 5% is the government share
    • Then there is also a Solvency Margin provision to be made
    • The remainder is then distributed as bonus to the policy holders
    T.S.Rajan,Development Officer
  • 20. Another Mega Benefit (cont.)
    • Loyalty Additions and Final Addition Bonuses are not based on assessment of surplus.
    • Hence there is NO TAX, NO GOVERNMENT SHARE AND NO SOLVENCY MARGIN PROVISION to be made.
    • The result naturally is substantially higher benefit to the policy holder
    T.S.Rajan,Development Officer
  • 21. Paid-up and Surrenders
    • Available after 3 years
    • No Surrender penalty after 5 years.
    • For e.g. if a 20 year is being surrendered after 12 years, it will be treated as if the policy was originally taken for a term of 12 years, and the maturity value corresponding to term 12 will be paid.
    • In this sense, Jeevan Saral can be called a Flexible Term plan.
    T.S.Rajan,Development Officer
  • 22. SURRENDER VALUE
    • PERIOD MATURITY S.A .
    • 3 TO 4 YEARS 80%
    • 4 TO 5 YEARS 90%
    • AFTER 5 YEARS 100%
    T.S.Rajan,Development Officer
  • 23. WHAT IS B.M.S.A.?
    • Basic Maturity Sum Assured is the amount that the customer will get on the date of maturity for a contribution of Rs.100/- per month.
    • Once B.M.S.A. is known, we can calculate the Maturity S.A. for any premium
    • After arriving at M.S.A., Loyalty Additions are to be added in the same manner as Reversionary Bonus
    T.S.Rajan,Development Officer
  • 24. Another Unique Feature
    • Yes. Jeevan Saral boasts of another fantastic unique feature - Partial Surrender
    • If you need money, you can partially surrender the policy
    • The premium will correspondingly reduce and thereby the associated benefits too.
    • This means that you can virtually break one policy into multiple policies
    • This also means that you can use this policy as a flexible Money back Plan .
    T.S.Rajan,Development Officer
  • 25. Standard Terms of this Plan
    • For a chosen premium, the level of benefits payable at maturity (The Maturity Sum Assured) will be quoted excluding L.A.
    • The Maturity Sum Assured has got the same Guarantee like Sum Assured under other policies of Govt. of India as per section 37 of the L.I.C. Act, 1956
    T.S.Rajan,Development Officer
  • 26. Rider Benefits
    • Accident benefit (optional)
    • Term Assurance Rider (optional)
    • Standard Term Assurance and AB rider Sums Assured limits apply
    • The Term Assurance and AB rider Sums Assured will not exceed the Death Beneift Sum Assured
    T.S.Rajan,Development Officer
  • 27. Conditions for Partial Surrender
    • Atleast 3 years premiums are paid
    • Minimum basic annual premium after withdrawal - 3000/- where age at entry was 49 years or below and 4800/- where age at entry was 50 years or above
    • Minimum basic annual premium for withdrawal - 1200/-
    • Withdrawal in multiples of - 600/- annual premium
    • Minimum waiting period between successive withdrawals - 1year
    • No loan should be o/s on the policy at the time of withdrawal
    • All future benefits and premiums under the policy will get reduced proportionately
    T.S.Rajan,Development Officer
  • 28. SARAL VS OTHER PLANS
    • YARDSTICKS TO ANALYSE A PLAN?
    • . RISK COVER
    • . MATURITY VALUE
    • . PREMATURE WITHDRAWAL
    T.S.Rajan,Development Officer
  • 29. SARAL Vs TABLE 14 T.S.Rajan,Development Officer Age 30 14-17 Monthly : 1000 Age 30 165-17 Monthly 1000
    • MATURITY : SA+BONUS
      • 200000+153000 = 353000
    • RISK COVER : (Ex 5 yrs)
      • SA+BONUS
      • 200000+45000 = 245000
    • 3. SURRENDER :
      • Surrender of a conventional policy will result into a loss at any point of time
    • MATURITY : MSA+LA
      • 224750+190400 = 415150
    • RISK COVER : (Ex 5 yrs)
      • DSA + RET. OF PREMIUM
      • 250000+48000 = 298000
    • 3. SURRENDER :
      • Surrender after 5 years is treated as MATURITY !
  • 30. Agent’s Commission T.S.Rajan,Development Officer 40% of FY commission Bonus Commission 5% 7.5% 20% 10 to 14 years 5% 7.5% 25% 15 years & above Thereafter 2 nd & 3 rd Year First Year Policy Term
  • 31. T.S.Rajan,Development Officer Thank you. T.S.Rajan, Dev. Officer 9443156829 [email_address]

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