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Benefits

A) Death Benefit:

On death of Life Assured, if the child is alive:

The nominee child shall get the Sum Assured.
Also, in case of regular premium policy, when the cover is in full force, payment of all future premiums due under the policy including outstanding premiums, if any, shall be waived. Units equivalent to an amount equal to all future premiums including outstanding premiums, if any, (i.e. sum total of all premiums payable under the policy – total premiums paid under the policy) shall be credited to the policyholder’s fund. The units shall be allocated at the unit price applicable for the fund type opted for under the policy on the date of notification of death. The policy shall continue.

On death of the Life Assured, after the death of the child:

Sum Assured plus Policyholder’s Fund Value together with an amount equal to all future premiums including outstanding premiums, if any, (i.e. sum total of all premiums payable under the policy – total premiums paid under the policy) shall be payable to the nominee/ legal heir, as the case may be, at that time and the policy shall terminate.

On death of child before life assured’s death:

The policy will continue till maturity or till the life assured survives, which ever is earlier.

On death of child after life assured’s death:

An amount equal to the Fund Value of units shall be payable to the legal heir of life assured and the policy shall terminate.

B) Maturity Benefit:

On the Life Assured or child surviving the maturity date of the contract, an amount equal to the Policyholder’s Fund Value is payable.


1. Investment of Funds: The premiums allocated to purchase units will be strictly invested according to the investment pattern committed in various fund types.  Various types of fund and their investment pattern will be as under:

Fund Type Investment in Government / Government Guaranteed Securities / Corporate Debt Short-term investments such as money market instruments Investment in Listed Equity Shares Details and objective of the fund for risk /return
Bond Fund Not less than 60% Not more than 40% Nil Low risk
Secured Fund
Not less than 45%
Not more than 40%
Not less than 15% &
Not more than 55%
Steady Income –Lower to Medium risk
Balanced Fund
Not less than 30%
Not more than 40%
Not less than 30% &
Not more than 70%
Balanced Income and growth – Medium risk
Growth Fund
Not less than 20%
Not more than 40%
Not less than 40% &
Not more than 80%
Long term Capital growth – High risk

The Policyholder has the option to choose any ONE of the above 4 funds.

2. Method of Calculation of Unit price: 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 (the Bid price and Offer price of units will both be equal to the NAV).  The NAV will be computed on daily basis and will be based on investment performance, Fund Management Charge and whether fund is expanding or contracting under each fund type and shall be calculated as under:
                                                                                                                                           
Appropriation price is applied (when fund is expanding):
Market value of investment held by the fund plus the expenses incurred in the purchase of the assets plus the value of any current assets plus any accrued income net of fund management charges less the value of any current liabilities less provisions, if any divided by the number of units existing at the valuation date (before any new units are allocated).

Expropriation price is applied (when fund is contracting):
Market value of investment held by the fund less the expenses incurred in the sale of assets plus the value of any current assets plus any accrued income net of fund management charges less the value of any current liabilities less provisions, if any divided by the number of units existing at the valuation date (before any units redeemed).

Applicability of Net Asset Value (NAV) :
The premiums received up to a particular time (presently 3 p.m.) by the servicing branch of the corporation through ECS or by way of a local cheque or a demand draft payable at par at the place where the premium is received, the closing NAV of the day on which premium is received shall be applicable. The premiums received after such time by the servicing branch of the corporation through ECS or by way of a local cheque or a demand draft payable at par at the place where the premium is received, the closing NAV of the next business day shall be applicable.

Similarly, in respect of the valid applications received for surrender, partial withdrawal, death claim, switches etc up to such time by the servicing branch of the Corporation closing NAV of that day shall be applicable. For the valid applications received in respect of surrender, partial withdrawal, death claim, switches etc after such time by the servicing branch of the Corporation the closing NAV of the next business day shall be applicable
In respect of maturity claim, NAV of the date of maturity shall be applicable.

The timing given is as per the existing guidelines and changes in this regard shall be as per the instructions from IRDA.

3. Charges under the Plan:

A) Premium Allocation Charge: This is the percentage of the premium deducted towards charges from the premium received. The balance constitutes that part of the premium which is utilized to purchase (Investment) units for the policy. The allocation charges are as below:

Single premium:         


      Premium Band
Allocation Charge
Up to 10,00,000 4.25%
10,00,001 and above 4.00%
Regular Premium

Premium Band
(per annum)
Allocation Charge
First year 2nd & 3rd year thereafter
10,000 to 1,00,000 29.00% 5.00% 2.50%
1,00,001 to 1,50,000 28.50% 5.00% 2.50%
1,50,001 to 2,00,000 28.00% 5.00% 2.50%
2,00,001 and above 27.50% 5.00% 2.50%



Allocation charge for Top-up:      1.25%

B) Charges for Risk Covers:

i) Mortality  Charge – This is the cost of life insurance cover and, in case of regular premium contract, also the charge to cover the cost of waiver of future premiums including outstanding premiums, if any, on the death of life assured. This charge is age specific and will be taken every month till the life assured is alive.
The charges per Rs. 1000/- cover (sum of life cover and cover for waiver of future premiums including outstanding premiums, if any) for some of the ages in respect of a healthy life are as under:

Age 25 35 45 55
Rs. 1.42 1.73 3.89 10.76



C) Other Charges: The following charges shall be deducted during the term of the policy irrespective of whether life assured is alive or not:

1. Policy Administration charge  - Rs. 60/- per month during the first policy year, Rs 20/- per month during the second year and thereafter, from the third year on wards till the end of the policy term Rs. 20/- per month escalating at 3% p.a. shall be levied.
2. Fund Management Charge –It is a charge levied as a percentage of the value of units at following rates:
0.50% p.a. of Unit Fund for “Bond” Fund
0.60% p.a. of Unit Fund for “Secured” Fund
0.70% p.a. of Unit Fund for “Balanced” Fund
0.80% p.a. of Unit Fund for “Growth” Fund

3. Switching Charge – This is a charge levied on switching of monies from one fund to another. Within a given policy year 4 switches will be allowed free of charge. Subsequent switches in that year shall be subject to a switching charge of Rs. 100 per switch.

4. Bid/Offer Spread – Nil.

5. Surrender Charge –  Nil.     

6. Miscellaneous Charge – This is a charge levied for an alteration within the contract, such as change in premium mode, etc. An alteration may be allowed subject to a charge of Rs. 50/-.


7. Service Tax Charge – A service tax charge, if any, shall be levied on the following charges

a) Policy Administration charge, Mortality charge (sum of life cover and cover for waiver of future premiums including outstanding premiums, if any,) by canceling appropriate number of units out of the Policyholder’s Fund Value on a monthly basis as and when the corresponding Policy Administration and Mortality charges are deducted.

b) Premium allocation charge- at the time of allocation of premium.
c) Fund Management charge– at the time of deduction of Fund Management Charge.

d) Switching charge - at the time of effecting switch

e) Alteration (as provided under Miscellaneous charge) -  on the date of alteration in the
    policy.
The level of this charge will be as per the rate of service tax as applicable from time to time. Presently, the rate of Service Tax is 12% with an educational cess at the rate of 3% thereon and hence effective rate is 12.36%.
     

D)  Right to revise charges: The Corporation reserves the right to revise all or any of the above charges except the Premium Allocation charge and Mortality charge. The modification in charges will be done with prospective effect with the prior approval of IRDA.
Although the charges are reviewable, they will be subject to the following maximum limit exclusive of service tax:


- Policy Administration Charge
Rs. 150/- per month during the first policy year, Rs. 50/- per month during the second year and thereafter, from the third year on wards till the end of the policy term Rs. 50/- per month escalating at 3% p.a.
- Fund Management Charge: The Maximum for each Fund will be as follows:

  1. Bond Fund:         1.00% p.a. of Unit Fund
  2. Secured Fund:     1.10% p.a. of Unit Fund
  3. Balanced Fund:    1.20% p.a. of Unit Fund
  4. Growth Fund:       1.30% p.a. of Unit Fund

 -  Switching Charge shall not exceed Rs. 200/- per switch.
 -  Miscellaneous Charge shall not exceed Rs. 100/- each time when an alteration is requested.
In case the policyholder does not agree with the revision of charges the policyholder shall have the option to terminate the contract and withdraw the Policyholder’s Fund Value.

4. Surrender:

The Surrender value, if any, is payable only after completion of the third policy anniversary both under Single and Regular Premium contracts. The surrender value will be the Policyholder’s Fund Value at the date of surrender. There will be no Surrender charge.

The policy can be surrendered by Life Assured. After the death of Life Assured during the policy term, the policy can be surrendered by the nominee (the child named under the policy) if he/she is major or by the appointee (in case the nominee is a minor) subject to an undertaking given by the appointee that the policy is surrendered solely for the benefit of minor child named in the policy.

If you apply for surrender of the policy within 3 years from the date of commencement of policy, then the Policyholder’s fund value shall be converted into monetary terms. No charges shall be made thereafter and this monetary amount shall be paid on completion of 3 years from the date of commencement of policy.

In case of death of the policyholder after the date of surrender but before the completion of 3 years from the date of commencement of policy the monetary value payable on completion of 3 years shall be payable to the nominee/ legal heir of life assured on the date of notification of death.

Compulsory Surrender:
The policy shall be surrendered compulsorily in following cases:

i)  where the policy is not revived during the period of revival or the life assured has not opted for continuing the cover after the revival period (where atleast 3 years premium have been paid), the policy shall be terminated after completion of 3 years from the date of commencement of the policy or on expiry of revival period, whichever is later. However, if the date of maturity falls before the expiry of revival period, then the policy shall be terminated on the date of maturity.

ii)  in case of single premium policy or regular premium policy where premiums have been paid for less than 3 years and the balance in policyholder’s fund value is not sufficient to recover the relevant charges;

iii) in case of regular premium policy where premiums have been paid for at least 3 years and the balance in policyholder’s fund value falls below a minimum balance of one annualized premium.

Policyholder’s Fund Value shall be converted into monetary value as under:
The NAV on the date of application for surrender or on the date when revival period is over (in case of compulsory surrender), as the case may be, multiplied by the number of units in the Policyholder’s Fund as on that date will be the monetary amount.

Life Insurance Corporation of India – Corporate Office : Yogakshema Building, Jeevan Bima Marg, P.O. Box No – 19953, Mumbai – 400 021 IRDAI Reg No- 512
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