ENDOWMENT PLUS (TABLE 802 )

TABLE 802 ENDOWMENT PLUS

Details:

This is a unit linked Endowment Plan, which offers Investment cum Insurance during the term of the policy. Plan is available under Single premium as well as regular mode of premium.

Features & Conditions:

• Minimum age at entry : 7 years lbd
• Maximum age at entry : 60 years nbd
• Minimum Term : 10 years
• Maximum Term : 20 years.
• Minimum Maturity age : 18 years lbd Maximum Maturity age : 70 years nbd

Minimum Premium:

• Single Premium: 30,000
• Regular Premium: 20,000/- p.a. (other then monthly ECS)
• and in multiples of 1000/- thereafter.
• For monthly ECS: 1,750/- and in multiples
• of 250/- thereafter.

Maximum Premium:

Single Premium : No limit Regular Premium: ` 1,00,000


Minimum S.A.:

Single Premium:

Age at entry upto 44 yrs :1.25 times of SP.

Age at entry 45 to 60 yrs :1.10 times of SP.

Regular Premium:

(Policy Term +1) times of AP for all ages.


Maximum S.A. :

Single Premium, without CIR:

Age at maturity upto 65 yrs : 5 times of SP.

Age at maturity 66 to 70 yrs : 3 times of SP.

Single Premium, with CIR:

Age at maturity upto 55 yrs : 5 times of SP.

Age at maturity 56 to 60 yrs : 3 times of SP.

Regular Premium with or without CIR:

Age at entry upto 45 yrs : 30 times of AP.

Age at entry 46 to 60 yrs : 25 times of AP.

S.A should be in multiples of ` 5000 only.


Riders:

Accident Benefit : Available

Permanent Disability : Not Available Term Assurance Rider : Not Available Critical Illness Rider : Available Max 10 lacs


Loan Facility: Available after 3 years, Maximum 30% of Fund Value.

Housing Loan Collateral: Allowed

Mode of y:

Yly, Hly, Qly & Mly ECS.

Tax Benefits u/s 80C : u/s 10(10D)

On Premiums Maturity/Death claim

Underwriting Rules:

Non medical Schemes:

Without CIR : All Allowed including separate limits for Single Premium.

Non-Standard Age proof : Max .S.A.
	SP	AP
NSAP 1	5/3 times	30/25 times
NSAP 2	4/3 times	30/22 times
NSAP 3	4/3 times	Not Allowed

Female Lives : All Allowed

Minor lives : Max rated up S.A. inclusive of all plans Rs. 50 lacs for standard lives only. Sub standard lives at CUS with MM’s recommendation.

Sub Standard Lives: Regular Premium:

Restriction on Max S.A. in multiples of AP and Policy Term as per age at entry and EMR class.

Single Premium:

Restriction on Max S.A. in multiples of SP as per age at Maturity and EMR class.

Actual Sum Assured (ASA):

For Medicals , & Financial Underwriting:

Regular Premium : Basic S.A.

Single Premium : Basic S.A. less SP.

Occupation & Residence Extra:

1. For DAB while engaged in police duty: ` 0.25 per 1000 S.A. extra will be charged.


2. If standard extra is less then or equal to `5.00 per 1000, then sub standard lives upto EMR class II allowed.


3. If standard extra is above `5.00 per 1000, then only standard lives allowed.

NRI’s:

Group I & II: only under single premium. Group III to VIII: Allowed as per Rules.

Dating Back : Not Allowed

Proposal Form : Endowment Plus

For CIR: Only under Regular Mode

Non medical not allowed,

Only NSAP 1 allowed.

Not allowed to minors, female cat III & NRIs

Sub standard lives not allowed.

Other rules of CIR will be applicable.

Read More

Insurance and the Direct Tax Code

Insurance and the Direct Tax Code

The DTC, which will become effective from April 1, 2012, has a number of implications for the insurance sector – both life and non-life. Here’s a look at the proposals that will affect policy holders and companies…

IMPLICATIONS FOR POLICYHOLDERS

Deductions under Section 80C - Presently, deductions under Section 80C are available, up to 1 lakh, for various investment instruments including premium paid for life insurance, provident fund, etc. Under the DTC, only sums paid to towards a contract for an annuity plan of any insurer (subject to it being an approved plan) is eligible for a deduction of up to an aggregate limit of 1 lakh (along with other approved funds).

Deduction of LIC premiums:

It is also proposed that premiums paid to LIC should be included in the additional deduction of 50,000, which is currently available to other payments such as health insurance and education of children. An important condition, however, is that only those insurance policies where the premium does not exceed 5 per cent of the capital sum assured in any year during the term of the policy would be eligible for this deduction.

Tax free investments: As the EEE (Exempt-Exempt-Exempt) system of taxation (i.e. contributions are tax free, accretions are tax free and withdrawals are also tax free) will continue, long-term savings instruments such as contributions to provident funds, approved superannuation funds, life insurance, gratuity funds, etc. will continue to be tax free.

Tax on maturity proceeds - DTC provides that proceeds on maturity of life insurance policies (in cases other than the death of the policyholder) will be taxable in the policyholder’s hands. The exception, however, is in the case of polices where the premium paid does not exceed 5 per cent of the sum assured or the insurer has paid distribution tax. In such cases, the life insurance company would have to withhold tax at specified rates from these proceeds being paid to policy holders. In the case the policy holder is an individual or has HUF status the tax withheld will be at the rate of 10 per cent, in the case of any other deductee, the withholding would be at the rate of 20 per cent, where payment exceeds 10,000.

IMPLICATIONS FOR COMPANIES

Life Insurance Companies

Higher corporate tax - Presently, life insurance companies are subject to a concessional tax rate of 12.5 per cent (plus surcharge and education cess) on the surplus disclosed by the actuarial valuation, as per the Insurance Act, 1938, less the opening surplus disclosed by that valuation. Now, DTC proposes to do away with this taxation scheme and proposes to tax the profits in the shareholders’ account at the normal corporate tax rate of 30 per cent, leaving policyholders’ funds to be taxed in the hands of shareholders.

Distribution tax - In addition to corporate tax, insurers will have to pay a 5 per cent distribution tax on the income distributed or paid to policyholders, in case of ‘approved equityoriented life insurance schemes’. These are life insurance schemes where more than 65 per cent of the total premiums received are invested in equity shares of domestic companies.

General Insurance Company

No significant change - The taxation scheme remains more or less the same as existing presently. The profits, as per the profit and loss account submitted to the insurance regulator IRDA, continue to be the basis of computing the taxable income.

Other provisions which impact the insurance sector

Any insurance premium, including re-insurance premiums accrued from or payable by any resident or non-resident, in respect of insurance covering any risk in India, is deemed to accrue or arise in India and is subject to tax in India. Such payments are subject to withholding tax at the rate of 20 per cent on a gross basis, without any deduction for expenses.
Apart from the above change, the definition of ‘Permanent establishment’ has been expanded to include the person acting in India on behalf of a non­resident engaged in the business of insurance, through whom the non-resident collects premiums in India/ insures risk situated in India. However, if a tax treaty provides a definition narrower than what has been prescribed under the DTC, then that definition would apply.

Under the DTC, an important departure from the present position is that a provision for loss in the diminution of the value of investments held should be allowed and unrealised gains on revaluation, if any, on revaluation could become taxable, if routed through the Profit and Loss Account statement.

Read More

Direct Tax Code IMPLICATIONS FOR POLICYHOLDERS

Insurance and the Direct Tax Code

The DTC, which will become effective from April 1, 2012, has a number of implications for the insurance sector – both life and non-life. Here’s a look at the proposals that will affect policy holders and companies…

IMPLICATIONS FOR POLICYHOLDERS

Deductions under Section 80C - Presently, deductions under Section 80C are available, up to 1 lakh, for various investment instruments including premium paid for life insurance, provident fund, etc. Under the DTC, only sums paid to towards a contract for an annuity plan of any insurer (subject to it being an approved plan) is eligible for a deduction of up to an aggregate limit of 1 lakh (along with other approved funds).

Deduction of LIC premiums:

It is also proposed that premiums paid to LIC should be included in the additional deduction of 50,000, which is currently available to other payments such as health insurance and education of children. An important condition, however, is that only those insurance policies where the premium does not exceed 5 per cent of the capital sum assured in any year during the term of the policy would be eligible for this deduction.

Tax free investments: As the EEE (Exempt-Exempt-Exempt) system of taxation (i.e. contributions are tax free, accretions are tax free and withdrawals are also tax free) will continue, long-term savings instruments such as contributions to provident funds, approved superannuation funds, life insurance, gratuity funds, etc. will continue to be tax free.

Tax on maturity proceeds - DTC provides that proceeds on maturity of life insurance policies (in cases other than the death of the policyholder) will be taxable in the policyholder’s hands. The exception, however, is in the case of polices where the premium paid does not exceed 5 per cent of the sum assured or the insurer has paid distribution tax. In such cases, the life insurance company would have to withhold tax at specified rates from these proceeds being paid to policy holders. In the case the policy holder is an individual or has HUF status the tax withheld will be at the rate of 10 per cent, in the case of any other deductee, the withholding would be at the rate of 20 per cent, where payment exceeds 10,000.

IMPLICATIONS FOR COMPANIES

Life Insurance Companies

Higher corporate tax - Presently, life insurance companies are subject to a concessional tax rate of 12.5 per cent (plus surcharge and education cess) on the surplus disclosed by the actuarial valuation, as per the Insurance Act, 1938, less the opening surplus disclosed by that valuation. Now, DTC proposes to do away with this taxation scheme and proposes to tax the profits in the shareholders’ account at the normal corporate tax rate of 30 per cent, leaving policyholders’ funds to be taxed in the hands of shareholders.

Distribution tax - In addition to corporate tax, insurers will have to pay a 5 per cent distribution tax on the income distributed or paid to policyholders, in case of ‘approved equityoriented life insurance schemes’. These are life insurance schemes where more than 65 per cent of the total premiums received are invested in equity shares of domestic companies.

General Insurance Company

No significant change - The taxation scheme remains more or less the same as existing presently. The profits, as per the profit and loss account submitted to the insurance regulator IRDA, continue to be the basis of computing the taxable income.

Other provisions which impact the insurance sector

Any insurance premium, including re-insurance premiums accrued from or payable by any resident or non-resident, in respect of insurance covering any risk in India, is deemed to accrue or arise in India and is subject to tax in India. Such payments are subject to withholding tax at the rate of 20 per cent on a gross basis, without any deduction for expenses.
Apart from the above change, the definition of ‘Permanent establishment’ has been expanded to include the person acting in India on behalf of a non­resident engaged in the business of insurance, through whom the non-resident collects premiums in India/ insures risk situated in India. However, if a tax treaty provides a definition narrower than what has been prescribed under the DTC, then that definition would apply.

Under the DTC, an important departure from the present position is that a provision for loss in the diminution of the value of investments held should be allowed and unrealised gains on revaluation, if any, on revaluation could become taxable, if routed through the Profit and Loss Account statement.

Read More