JEEVAN PLUS PLAN (Plan No. 173)

INTRODUCTION OF LIC’S JEEVAN PLUS PLAN (Plan No. 173)

1. INTRODUCTION:
It has been decided to introduce LIC’s Jeevan Plus Plan (Plan No. 173) with effect from 18th October, 2005.

This is a unit linked Whole Life plan which offers investment-cum-insurance throughout the life time of the policyholder. The policyholder can choose the level of cover within the limits, which will depend on the mode and level of premium he agrees to pay. The allocated premium will be applied to buy units as per the chosen fund type. The Policyholder’s Unit Account will be subject to deduction of charges mentioned in section 6 of this circular. Units will be allotted based on the Net Asset Value (NAV) of the respective fund as on the date of allotment. There is no Bid-Offer spread (both the Bid price and Offer price of units will be equal to the NAV). The NAV will be declared on a daily basis and will be based on the investment performance and Fund Management Charges (FMC) under each fund type.

The details of this plan are as follows:

2. INVESTMENT FUND TYPES:
The premiums allocated to purchase units will be invested according to the investment pattern prescribed for different fund types. The types of fund and their investment pattern are as under:


Fund Type
Investment in Government / Government Guaranteed Securities / Corporate Debt

Short-term investments such as money market instruments
(Including Govt. Securities & Corporate Debt)
Investment in Listed Equity Shares
Bond Fund

Secured Fund

Balanced Fund

Growth Fund
Not less than 80%

Not less than 70%

Not less than 60%

Not less than 30%
100%

Not more than 90%

Not more than 80%

Not more than 50%
Nil

Not more than 20%

Not more than 30%

Not more than 60% but not less than 50%

The Policyholder will have the option to choose any ONE of the above 4 Funds. In case no Fund is opted for, the allocated premiums shall, by default, be invested in the SECURED FUND.

For one month from the date of launch, the NAV under all funds will be Rs.10/-.

3. BENEFITS:
a) Benefits payable on death:
In case of death of the policyholder when the cover is in full force, the nominee shall be eligible to get the Sum Assured under the Basic Plan together with the Bid Value, as at the date of settlement / booking liability, whichever is earlier, of units held in the Policyholder’s Unit Account.

In case of death of the Life Assured aged less than or equal to 12 years before the commencement of risk, only Bid Value of the units held in the Policyholder’s Unit Account is payable.

b) Benefit payable on maturity:
On the policyholder surviving the policy anniversary on which the age nearer birthday is 100 years, an amount equal to the Bid value of the units held in the Policyholder’s Unit Account is payable.

c) Options:
i. Accident Benefit Rider Option:
Accident Benefit (AB) can be availed of as an optional Rider benefit by paying an additional premium of Rs.0.50 for every Rs.1,000/- of the Accident Benefit Sum Assured per policy year by cancellation of appropriate number of units out of the Policyholder’s Unit Account every month. On Accidental death of the Policyholder during the term of the policy, a sum equal to the Accident Benefit Sum Assured will become payable, provided the Accident benefit cover is opted for and is in force. Further, it will be available up to the Sum Assured under the Basic Plan, subject to an overall limit of Rs.50 lakh taking all existing policies of the Life Assured under individual as well as group schemes including policies with in-built accident benefit taken with Life Insurance Corporation of India and other insurance companies and the Accident Benefit Rider Sum Assured under the new proposal into consideration.

If the age at entry of the Life Assured is less than 18 years, then Accident Benefit Rider can be opted for from the policy anniversary coinciding with or immediately following the completion of 18 years of age.

This benefit will be available only till the policy anniversary on which the age nearer birthday of the Policyholder is 70 years. No charges for this benefit shall be deducted from the Policy anniversary at which the benefit ceases.






ii. Critical Illness Rider Option:
An amount equal to the Critical Illness Rider Sum Assured will be payable in case of diagnosis of defined categories of Critical Illness subject to certain terms and conditions, provided the Critical Illness Benefit cover is opted for and is in force. The maximum cover for this rider will be Rs.5 lakh under all policies of the Life Assured with the Corporation taken together including the new proposal under consideration. The Critical Illness Rider Sum Assured shall also not exceed the Sum Assured under the Basic Plan.

If the age at entry of the Life Assured is less than 18 years, then Critical Illness Benefit Rider can be opted from the policy anniversary coinciding with or immediately following the completion of 18 years of age.

This benefit will be available only till the policy anniversary on which the age nearer birthday of the Policyholder is 60 years. No charges for this benefit shall be deducted from the Policy anniversary at which the benefit ceases.

Further, this benefit will be available only once during the term of the policy (i.e. till a critical illness claim, as per the conditions defined, arises under the policy). Once a claim under this Rider has been admitted, no subsequent charge towards Critical Illness Benefit Rider shall be deducted. Charges towards Life cover and Accident Benefit cover, if any, shall however continue to be deducted on a monthly basis, as usual.

d) Auto-cover:
The charges for Life Cover and Accident Benefit / Critical Illness Benefit cover, if any, shall be taken by canceling an appropriate number of units out of the Policyholder’s Unit Account every month. This will continue to provide relevant risk covers due under the policy, even if premiums have not been paid as and when due under the policy subject to the minimum balance in the Policyholder’s Unit Account.

During the period of Auto-cover any / all unpaid premiums that have fallen due may be paid at anytime without interest.

The Auto-cover facility will compulsorily be available throughout the term of the policy. However, for Regular premium policies where less than 3 years’ premiums have been paid and Single premium policies, if at any time, the Policyholder’s Unit Account falls below the monthly charges, the policy shall compulsorily be terminated and the balance amount in the Policyholder’s Unit Account, if any, will be refunded to the Policyholder.

Not withstanding what is stated above, the balance in the Policyholder’s Unit Account should be sufficient to cover the relevant charges. However, for all Regular Premium policies where at least 3 years’ premiums have been paid, the Policyholder’s Unit Account, at all times, shall be subject to a minimum balance of one annualized premium. In case the Policyholder’s Unit Account falls below this limit, the policy shall compulsorily be terminated and the balance amount in the Policyholder’s Unit Account shall be refunded to the Policyholder. Annualized premium for this purpose shall be taken as one yearly premium, 2 half-yearly premiums or 4 quarterly premiums.




4. ADDITIONAL FEATURES:
a) Switching: The policyholder can switch between any fund types during the policy term. Within a given policy year, 4 switches will be allowed free of charge. Subsequent switches shall be subject to a switching charge of Rs.100 per switch.

On receipt of the policyholder’s application for a switch from one fund type to another, the Bid Value of the Units held in the Policyholder’s Unit Account on the date of switch after deducting switching charges, if any, shall be transferred to the New Fund selected by the policyholder and shall be utilized to allocate Fund Units at the Offer price under the New Fund at the said date of the switch.

b) Top-up (Additional Premium): The policyholder can pay Top-up in multiples of Rs.1,000/- at anytime during the term of the policy subject to the overall amount of Top-up as under:
i. In case of Single Premium – equal to the Single Premium.

ii. In case of Regular Premium – Total premiums payable during the term of the policy.

The above limit is for the Top-up payable during the entire term of the policy. Once Top-up upto above limit have been paid under the policy, no further Top-up will be accepted.

No additional death benefit shall be available on Top-ups. In case of quarterly, half-yearly or yearly mode of premium payment such Top-up can be paid only if all due premiums have been paid under the policy.

c) Minimum growth rate: For the “Bond “ fund, the allocated premium, net of all charges and deductions, will have a guaranteed minimum growth rate of 3% p.a. compounding yearly, provided the policy is held till the maturity without any switching to any other fund in between and all premiums due under the policy have been duly paid in time. The guarantee will not be applicable to any Top-up premiums paid. There will be no guarantee under other funds.

d) Partial withdrawals: The Policyholder can partially surrender the units during his life time. Partial Surrender may be in the form of fixed amount or in the form of fixed number of units.

Partial Surrenders shall be subject to Surrender Charge, if any, as mentioned in Section 15 below.

Under Single Premium policies, the partial surrender will be allowed subject to a minimum balance of Rs. 10,000/- in the Policyholder’s Unit Account.

Under Regular Premium policies where less than 3 years premiums have been paid, the partial surrender will be allowed subject to a minimum balance of Rs. 10,000/- in the Policyholder’s Unit Account.

Under Regular Premium policies where atleast 3 years premiums have been paid, the partial surrender will be allowed subject to a minimum balance of two annualized premiums in the Policyholder’s Unit Account.



5. ALLOCATION RATE: The allocation rate applicable to the premium to determine the part of premium utilized to purchase units in the Policyholder’s Unit Account will depend on the mode of premium payment and on the premium size as under:

Single premium:
Premium Band
Allocation Rate
25,000 to 49,000
0.9500
50,000 to 99,000
0.9600
100,000 to 4,99,000
0.9640
5,00,000 and above
0.9670

Regular premium:
Premium Band (per annum)
Allocation rate

First Year & 2nd year
Thereafter
5,000 to 9,000
0.8200
0.9750
10,000 to 19,000
0.8400
0.9750
20,000 to 49,000
0.8500
0.9750
50,000 and above
0.8550
0.9750

Allocation rates for top-ups: 0.9875

6. CHARGES AND FREQUENCY OF CHARGES:
i. Life Cover, Critical Illness Benefit and Accident Benefit Charge: Charges for Life cover, Critical Illness Benefit and Accident Benefit riders, if any, will be taken every month by canceling appropriate number of units out of the Policyholder’s Unit Account as per the rate prevalent at the time of policy issue or as amended by LIC from time to time with the prior approval of IRDA.

Life cover and Critical Illness Benefit charges, during a policy year, will be based on the age nearer birthday of the Policyholder as at the Policy anniversary coinciding with or immediately preceding the due date of cancellation of units and hence may increase every year on each policy anniversary. Further, the charges will also depend on health, occupation and lifestyle of the Policyholder.

A level charge at the rate of Rs.0.50 per thousand Accident Benefit Sum Assured per policy year will be made for Accident Benefit cover by cancellation of appropriate number of units out of the Policyholder’s Unit Account every month along with the Life cover and Critical Illness Benefit charges. Charges for Accident Benefit and Critical Illness riders shall be deducted only if these riders have been opted for.

ii. Other Charges:
a) FLAT FEE: A flat fee of Rs.15/- per month will be charged throughout the term of the policy by canceling appropriate number of units out of the Policyholder’s Unit Account.

b) ADMINISTRATIVE CHARGE: Re.1%o Sum Assured under the Basic Plan subject to a maximum of Rs.1,000 in each of the first 2 years.

c) POLICY CHARGE: Rs.0.10%o Sum Assured under the Basic Plan in each of the first 2 years.

The charges under b) and c) above will be deducted by canceling appropriate number of units out of the Policyholder’s Unit Account and the deduction shall be made in two yearly instalments, first on the date of completion of the policy and second at the First Policy anniversary.

d) FUND MANAGEMENT CHARGE – Fund Management Charges (FMC) are dependent on type of Fund and are deductible on the date of computation of NAV at the following rates:
1.00% p.a. of Unit Fund for “Bond” Fund
1.00% p.a. of Unit Fund for “Secured” Fund
1.25% p.a. of Unit Fund for “Balanced” Fund
1.50% p.a. of Unit Fund for “Growth” Fund
The NAV, thus declared, will be net of FMC.

e) SWITCHING CHARGES – as specified under Section 4 (a) above.

f) BID/OFFER SPREAD – Nil.

g) SURRENDER CHARGES – As specified under Section 15 below.

h) SERVICE TAX CHARGE – A service tax charge shall be levied on the Life Cover Charges and Accident Benefit and Critical Illness Benefit rider charges, if any, and shall be taken by canceling appropriate number of units out of the Policyholder’s Unit Account on a monthly basis as and when the corresponding Life cover, Accident Benefit and Critical Illness Benefit rider charges are deducted. The level of this charge will be as per the rate of service tax on risk premium as applicable from time to time. Currently, the rate of service tax is 10.2%.

iii. Right to revise charges: The Corporation reserves the right to revise all or any of the above charges, including the right to change the manner in which charges are to be recovered. The Corporation may also introduce new charges, as and when such a need may arise. The modification in charges will be done with prospective effect with the prior approval of IRDA and after giving the policyholders a notice of 3 months. In case a policyholder does not agree with the modified charges, he/ she shall be allowed to withdraw the Bid Value of the units held in his/her Unit Account of the policy without any surrender charge.

7. LOANS:
No loan shall be granted under this plan.




8. CEIS REBATE:
No rebate on premium is allowed to Corporation Employees.

However, for Corporation Employees, the allocation rate will be 100% for Single Premium policies subject to a deduction of Rs. 250 at the time of completion of Single Premium policy. There shall be a further deduction of Rs.250 at the First Policy Anniversary from the Policyholder’s Unit Account by cancellation of appropriate number of units.

In case of Regular Premium policies the allocation rate will be 100% from the 3rd Policy anniversary onwards. In the first 2 policy years the premiums shall be allocated to purchase units after deduction of Rs.250 in case of Yearly premiums, Rs.125 from each premium in case of half-yearly premiums and Rs.62.50 from each premium in case of quarterly premiums respectively.

The allocation rate for any amount paid as top-up shall be 100%.

9. MODES OF PREMIUM PAYMENT:
Regular premium can be paid either in yearly, half yearly or quarterly installments. The minimum Annual Premium will be Rs. 5,000/- increasing thereafter in multiples of Rs. 1,000/-.

There will be no mode specific charges/ rebates.

Single premium can be paid subject to a minimum of Rs. 25,000 and thereafter in multiples of Rs. 1,000.

10. ELIGIBILITY CONDITIONS AND FEATURES:
For Basic Plan
a) Minimum Sum Assured:
Single Premium - 0.5 times of the single premium subject to minimum of Rs. 25,000
Regular Premium - 5 times of the annualized premium subject to minimum of Rs. 50,000
b) Maximum Sum Assured:
Single Premium - 10 times of the single premium
Regular Premium - 50 times of the annualized premium
c) Minimum Premium: Rs. 5,000 p.a. for Regular premium
Rs. 25,000 for Single premium
d) Maximum Premium: No Limit
e) Minimum Entry Age: 0 years last birthday
f) Maximum Entry Age: 65 years nearest birthday
g) Policy Term: (100 - age at entry)
h) Benefit Ceasing Age: 100 nearest birthday

Sum Assured shall be available in multiples of Rs. 5,000 and Annualized premiums shall be payable in multiples of Rs. 1,000

Note: Risk will commence either after 2 years from the date of commencement or from the policy anniversary coinciding with or immediately following the completion of 7 years of age, whichever is later, if the age at entry of the life assured is less than or equal to 12 years.

For Accident Benefit
a) Minimum Sum Assured: Rs. 25,000
b) Maximum Sum Assured: Rs. 50,00,000 taking all existing policies of the Life Assured under individual as well as group schemes including policies with in-built accident benefit taken with Life Insurance Corporation of India and other insurance companies and the Accident Benefit Rider Sum Assured under the new proposal into consideration.
Under no circumstances Accident Benefit Sum Assured shall exceed the Sum Assured under the basic Plan.
c) Minimum / Maximum Premium: No separate Limit
d) Minimum Entry Age: 18 years completed
e) Maximum Entry Age: 65 years nearest birthday
f) Policy Term: (70 - age at entry)
g) Benefit Ceasing Age: 70 years nearest birthday

For Critical Illness Rider Benefit
a) Minimum Sum Assured: Rs. 50,000
b) Maximum Sum Assured: Rs. 5,00,000 taking Critical Illness riders availed under all existing policies of the Life Assured with the Corporation and the Critical Illness Rider Sum Assured under the new proposal under consideration.
Under no circumstances Critical Illness Rider Sum Assured shall exceed the Sum Assured under the basic Plan.
c) Minimum /Maximum Premium: No separate Limit
d) Minimum Entry Age: 18 years completed
e) Maximum Entry Age: 50 years nearest birthday
f) Policy Term: (60 - age at entry) subject to
minimum of 10 years and maximum of 35
years
g) Benefit Ceasing Age: 60 years nearest birthday

11. MORTALITY AND CRITICAL ILLNESS BENEFIT CHARGES:
The Life Cover and Critical Illness cover charges per Rs.1,000/- Sum Assured for standard lives are given in Annexure I.

In case of substandard lives Life Cover charges will be inclusive of the extra charged.

The Class I extra charge for Life Cover shall be 25% of the Life Cover charge for standard lives. Charge for higher EMR shall be multiples of the Class I extra charge as applicable in other plans. This extra charge will be included in the Life cover charges.

The standard extra to be charged in case of Occupation Extra, Handicapped lives etc. shall be the rates applicable to Whole Life Plan and shall also be included in the Life cover charges.

12. COMMISSION PAYABLE TO AGENTS/ CORPORATE AGENTS/ BROKERS & DEVELOPMENT OFFICER’S CREDIT:

Commission to Agents & Corporate Agents:
· For regular premium polices –
Year Commission
First 10%
2nd & 3rd 4%
Thereafter 2%
· For single premium policies – 2% of the premium.
· 1% of the amount made as Top-up during any year.
· There will be 40% bonus commission on the first year premium under regular premium policies. No bonus commission will be payable on single premium policies.

Commission to Brokers:
· For regular premium polices –
Year Commission
First 14%
Thereafter 2%
· For single premium policies – 2% of the premium.
· 1% of the amount made as Top-up during any year.

Development Officer’s credit:
· Regular premium – 30% of FY premium.
· Single premium – 5% of single premium.

13. UNDERWRITING:
For the basic plan all the conditions of underwriting for Whole Life plan will apply.
For the purpose of determining SUC, underwriting limits and calling for Special reports, the Sum Assured under the Basic Plan and Critical Illness Rider Sum Assured taken together shall be considered. Cost of medical examination will be borne by the Corporation subject to a limit of Rs. 4%o Sum Assured under the Basic Plan. For Financial Underwriting, the Critical Illness Rider Sum Assured need not be taken into account. Current Rules regarding MHR shall be applicable to this plan.

The Critical Illness Rider Benefit will be available to standard lives only. Other terms and conditions for underwriting in case of Critical Illness Rider shall also apply.

14. PAID-UP VALUE:
If premiums are payable either yearly, half-yearly or quarterly and the same have not been paid under the Policy, the Policy will become paid-up. The Life cover and Accident Benefit and Critical Illness Benefit riders, if any, shall however continue subject to the provisions of “Auto-cover” stated under Section 3(d) above.

The paid-up value under the policy payable in different contingencies shall be as under:

A. In case of Death: Sum Assured under the Basic Plan plus Bid Value of units held in the Policyholder’s Unit Account.
B. In case of Death due to accident: Accident Benefit Sum Assured in addition to the amount under A above.
C. In case of Critical Illness Benefit claim: Critical Illness Rider Sum Assured.
D. In case of Surrender: Bid Value of units held in the Policyholder’s Unit Account less surrender charge, if any.
E. On maturity: Bid Value of units held in the Policyholder’s Unit Account.

Notwithstanding what is stated above, the balance in the Policyholder’s Unit Account should be sufficient for Auto-cover to continue.

However :
i. Where less than 3 years’ premiums have been paid, if at any time, the Policyholder’s Unit Account falls below the monthly charges, the policy shall compulsorily be terminated and the balance amount in the Policyholder’s Unit Account, if any, will be refunded to the Policyholder.

ii. Where at least 3 years’ premiums have been paid, the Policyholder’s Unit Account shall be subject to a minimum balance of one annualized premium. In case the Policyholder’s Unit Account falls below this limit, the policy shall compulsorily be terminated and the balance amount in the Policyholder’s Unit Account will be refunded to the Policyholder.

15. SURRENDER VALUE AND SURRENDER CHARGE:
The benefit available on surrender will depend on whether the policy is a Single premium or Regular premium contract, duration of the policy at surrender and the number of years for which premiums have been paid. The cash surrender value will be the Bid Value of units held in the Policyholder’s Unit Account at the date of surrender after deduction of surrender charge, which will be as under:

Single premium:
Duration since date of commencement Surrender Charge
Upto and including 1 Year: 1% of Bid Value
More than 1 year: Nil

Regular Premium:
Number of years premiums have been paid Surrender charge
If only one quarterly premium is paid: 100% of Bid Value
If less than one year’s premium are paid : 60% of Bid Value
(i.e. 2 Qly/3 Qly/1 Hly)
If 1year’s premiums are paid : 30% of Bid Value
(i.e. 4 Qly/2 Hly/1 Yly)
If 5 quarterly premiums are paid : 15% of Bid Value
Thereafter : Nil
(i.e. more than or equal to 6Qly/3Hly/2Yly)

Once a policy is surrendered it cannot be reinstated.

16. REVIVALS:
Revival is not applicable under the plan.



17. DAYS OF GRACE:
There is an Auto-cover facility under the plan. Hence no days of grace will be there under the plan. During the period of Auto-cover the policyholder can pay all / any premium/s that have fallen due under the policy till the date of payment without interest.

18. NORMAL REQUIREMENTS FOR CLAIM:
The normal documents which the claimant/s shall submit while lodging a claim in case of death of the policyholder shall be the claim forms as prescribed by the Corporation accompanied with the original policy document, proof of title, proof of death, proof of accident, medical treatment prior to death, employer’s certificate, whichever is applicable together with the proof of age, if not already admitted.

On maturity or on earlier Surrender, the Life Assured shall submit the discharge form along with the original policy document besides the proof of age, if not admitted earlier.

In case the age is found to be higher from that previously taken then the difference in the charges for the correct age shall be deducted with interest at such rate as determined by the Corporation from time to time.

19. ASSIGNMENTS / NOMINATION:
Notice of Assignment or Nomination should be submitted for registration to the office of the Corporation, where this policy is serviced. In registering an assignment or nomination the Corporation does not accept any responsibility or express any opinion as to its validity or legal effect.

20. COOLING-OFF PERIOD:
If a policyholder is not satisfied with the “Terms and Conditions” of the policy, he/she may return the policy to the Corporation within 15 days from the date of receipt of the policy. The amount to be refunded in case the policy is returned within the cooling-off period shall be determined as under:

Bid Value of units in the Policyholder’s Unit Account
Plus unallocated premium.
Plus Administrative charge deducted
Less balance Policy Charge @ Rs.0.10%o Sum Assured under the Basic Plan
Less Actual cost of medical examination and special reports

In case the policy is returned during the cooling-off period, Commission /cost of Development Officer’s credit, if paid, shall be recovered from the concerned Agent/ Development Officer.

21. BACK DATING:
Back dating of policy will not be allowed.

22. POLICY STAMPING:
Policy Stamping will be at the rate of Rs.0.20 per thousand Sum Assured under the Basic Plan.



23. REINSURANCE:
For reinsurance purposes, under the basic plan the retention limits applicable will be those applicable to Whole life Assurance Plans.

24. ACCOUNTING OF INCOME AND OUTGO
Instructions regarding the accounting procedure to be followed under the plan shall be issued separately by Finance & Accounts Department, Central office.