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Home » Products » Withdrawn Plans » LIC's Jeevan Nidhi (Plan No. 169, UIN: 512N224V01) » Benefit Illustration
Benefit Illustration

Benefit Illustration

Insurance Regulatory & Development Authority (IRDA) requires all life insurance companies operating in India to provide official illustrations to their customers.  The illustrations are based on the investment rates of return set by the Life Insurance Council (constituted under Section 64C(a) of the Insurance Act 1938) and is not intended to reflect the actual investment returns achieved or may be achieved in future by Life Insurance Corporation of India (LICI).

For the year 2004-05 the two rates of investment return declared by the Life Insurance Council are 6% and 10% per annum.

Product summary:

This is a with-profits pension plan which provides for death cover during the deferment period and on survival to the date of vesting, the maturity proceeds are compulsorily to be used for purchase of annuity.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary deduction, as opted by you, throughout the term of the policy or till earlier death. Alternatively, the premium may be paid in one lump sum (single premium).

Tax Benefits:
Tax relief under Section 80CCC(1) is available on premiums paid under this policy.Guaranteed Additions during the first five years:
The policy provides for the Guaranteed Additions at the rate of Rs.50/- per thousand Sum Assured during first five years of the policy. The Guaranteed Additions are payable along with the basic Sum Assured on vesting or on earlier death.
Bonuses after the first 5 years:
This is a with-profit plan and participates in the profits of the Corporation’s life insurance business after 5 years. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year.  Once declared, they form part of the guaranteed benefits of the plan. A Final (Additional) Bonus may also be payable provided a policy has run for certain minimum period.
Death Benefit:
The Sum Assured along with accrued guaranteed additions and vested simple reversionary bonuses and Final (Additional) Bonus, if any, is payable in a lump sum on death of the life assured during the deferment period of the policy. 
Benefit  on vesting:
On the date of vesting you can encash  up to a maximum of 1/3rd of the amount consisting of the Sum Assured along with accrued guaranteed additions, vested simple reversionary bonuses and Final (Additional) Bonus, if any as a tax-free lump sum. The balance amount shall be compulsorily converted into an annuity at the option and the rates applicable at the time of vesting of the annuity.
Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra protection/option.  An additional premium is required to be paid for these benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender value is available on the plan on earlier termination of the contract.
Guaranteed Surrender Value:
The policy may be surrendered for cash after the policy is kept in force by payment of premiums for at least three years. The guaranteed surrender value available under this plan for all modes, except the single premium mode, will be equal to 30% of the total amount of premiums paid excluding the first year’s premium and the extra premiums. In case of single premium mode, The guaranteed surrender value will be 90% of the premium paid excluding all extra premiums.
Corporation’s policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value – which is either equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender reflects the discounted value of the reduced claim amount that would be payable on death or at maturity. This value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender. In some circumstances, especially in case of early termination of the policy, the surrender value payable may be less than the total premium paid.
The Corporation reviews the surrender value payable under its plans from time to time  depending on the economic environment, experience and other factors.
Note: The above is the product summary giving the key features of the plan.  This is for illustrative purpose only.  This does not represent a contract and for details please refer to your policy document. Further, the tax benefits are as per present Tax Laws.

Benefit Illustration:

Statutory Warning
“Some benefits are guaranteed and some benefits are variable with returns based on the future performance of your insurer carrying on life insurance business.  If your policy offers guaranteed returns then these will be clearly marked “guaranteed” in the illustration table on this page.  If your policy offers variable returns then the illustrations on this page will show two different rates of assumed future  investment returns.  These assumed rates of return are not guaranteed and they are not upper or lower limits of what you might get back as the value of your policy is dependent on a number of factors including future investment performance.”

Illustration 1:
Age at entry: 35 years
Policy Term: 25 years
Premium paying term: 25 years
Sum Assured (Rs.): 100000
Yearly Premium (Rs.): 4121
 

End of year Total premiums paid till end of year Benefit payable on death / Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 4,121 1,00,000 0 0 100000 100000
2 8,242 1,05,000 0 0 105000 105000
3 12,363 1,10,000 0 0 110000 110000
4 16,484 1,15,000 0 0 115000 115000
5 20,605 1,20,000 0 0 120000 120000
6 24,726 1,25,000 2300 7300 127300 132300
7 28,847 1,25,000 4600 14600 129600 139600
8 32,968 1,25,000 6900 21900 131900 146900
9 37,089 1,25,000 9200 29200 134200 154200
10 41,210 1,25,000 11500 36500 136500 136500
15 61,815 1,25,000 23000 73000 148000 198000
20 82,420 1,25,000 48500 157500 173500 282500
25 1,03,025 1,25,000 63500 206000 188500 331000

 
Illustration 2:
Age at entry: 35 years
Policy Term: 25 years Sum Assured (Rs.):
100000 Single Premium (Rs.): 53750



 

End of year Total premiums paid till end of year Benefit payable on death / Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 53,750 1,00,000 0 0 100000 100000
2 53,750 1,05,000 0 0 105000 105000
3 53,750 1,10,000 0 0 110000 110000
4 53,750 1,15,000 0 0 115000 115000
5 53,750 1,20,000 0 0 120000 120000
6 53,750 1,25,000 2500 12400 127500 137400
7 53,750 1,25,000 5000 24800 130000 149800
8 53,750 1,25,000 7500 37200 132500 162200
9 53,750 1,25,000 10000 49600 135000 174600
10 53,750 1,25,000 12500 62000 137500 187000
15 53,750 1,25,000 25000 124000 150000 249000
20 53,750 1,25,000 53500 268000 178500 393000
25 53,750 1,25,000 70000 350500 195000 475500


i) This illustration is applicable to a non-smoker male/female standard (from medical, life style and occupation point of view) life.

ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated so that they are consistent with the Projected Investment Rate of Return assumption of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively.  In other words, in preparing this benefit illustration, it is assumed that the Projected Investment Rate of Return that LICI will be able to earn throughout the term of the policy will be 6% p.a. or 10% p.a., as the case may be.  The Projected Investment Rate of Return is not guaranteed.

iii) The main objective of the illustration is that the client is able to appreciate the features of the product and the flow of benefits in different circumstances with some level of quantification.

iv) Future bonus will depend on future profits and as such is not guaranteed. However, once bonus is declared in any year and added to the policy, the bonus so added is guaranteed.

v
) The Maturity benefit is the amount shown at the end of the Policy term.

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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