the magic of jeevan Saral plan


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the magic of jeevan Saral plan

  1. 1. The Magic of Jeevan SaralAn insight into this unique plan of L.I.C. Golden Peacock Award winner in 2004 Saumitra basu lic agent
  2. 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….. Saumitra basu lic agent
  3. 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. Saumitra basu lic agent
  4. 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.) Saumitra basu lic agent
  5. 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. 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. Saumitra basu lic agent
  7. 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. Saumitra basu lic agent
  8. 8. Jeevan Saral - a plan with a difference Jeevan Saral is a unique planwhich offers the best features of a conventional plan and a unit linked plan in one product itself Saumitra basu lic agent
  9. 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 Saumitra basu lic agent
  10. 10. Eligibility ConditionsMinimum age at entry 12 years (completed)Maximum age at entry 60 yearsMaximum age at maturity 70 yearsMinimum term 10 yearsMaximum term 35 yearsMinimum premium for entry age 49 years or Rs.250/- per monthbelowMinimum premium for entry age 50 years or Rs.400/- per monthaboveAll modes of payment except Single Premium & NMS/NMG allowedMonthly mode.Males & Females of all categories are eligible All age proofs acceptable Saumitra basu lic agent
  11. 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. 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 Saumitra basu lic agent
  13. 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. Saumitra basu lic agent
  14. 14. Unique FeatureIn case of death claim, in addition to theSum Assured payable on death, AllPremiums Paid, (excluding the first yearpremium, extra premiums and premiums forrider benefits), will be refunded. This is thefirst time that such a feature has beenintroduced. The result is a continuouslyincreasing Risk Cover from the secondyear onwards. Saumitra basu lic agent
  15. 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. Saumitra basu lic agent
  16. 16. What is loyaltyaddition?How much will it be? Saumitra basu lic agent
  17. 17. Loyalty AdditionWith profit Without• Identical to profitbonus • Meager amount• 165, 174, 179 • 111, 150 Saumitra basu lic agent
  18. 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 Saumitra basu lic agent
  19. 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 Saumitra basu lic agent
  20. 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 Saumitra basu lic agent SHARE AND NO SOLVENCY MARGIN PROVISION to be made.• The result naturally is substantially higher benefit to the policy holder Saumitra basu lic agent
  21. 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. Saumitra basu lic agent
  22. 22. SURRENDER VALUE PERIOD MATURITY S.A.• 3 TO 4 YEARS 80%• 4 TO 5 YEARS 90%• AFTER 5 YEARS 100% Saumitra basu lic agent
  23. 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 Saumitra basu lic agent
  24. 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. Saumitra basu lic agent
  25. 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 Saumitra basu lic agent
  26. 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 Saumitra basu lic agent
  27. 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 Saumitra basu lic agent
  29. 29. SARAL Vs TABLE 14 Age 30 Age 30 14-17 Monthly : 1000 165-17 Monthly 10001. MATURITY : SA+BONUS 1. MATURITY : MSA+LA 200000+153000 = 353000 224750+190400 = 4151502. RISK COVER : (Ex 5 yrs) 2. RISK COVER : (Ex 5 yrs) SA+BONUS DSA + RET. OF PREMIUM 200000+45000 = 245000 250000+48000 = 2980003. SURRENDER : 3. SURRENDER : Surrender of a conventional Surrender after 5 years is policy will result into a loss treated as MATURITY ! at any point of time Saumitra basu lic agent
  30. 30. Agent’s CommissionPolicy Term First Year 2nd & 3rd Thereafter Year15 years & 25% 7.5% 5%above10 to 14 20% 7.5% 5%yearsBonus 40% of FYCommission commission Saumitra basu lic agent
  31. 31. Saumitra basu lic agent