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. 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. 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. 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. Jeevan Saral - a plan with a
difference
Jeevan Saral is a unique plan
which offers the best features of a
conventional plan and a unit
linked plan in one product itself
Saumitra basu lic agent
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. Eligibility Conditions
Minimum age at entry 12 years (completed)
Maximum age at entry 60 years
Maximum age at maturity 70 years
Minimum term 10 years
Maximum term 35 years
Minimum premium for entry age 49 years or Rs.250/- per month
below
Minimum premium for entry age 50 years or Rs.400/- per month
above
All modes of payment except Single Premium & NMS/NMG allowed
Monthly mode.
Males & Females of all categories are eligible All age proofs
acceptable
Saumitra basu lic agent
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. 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. 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. Unique Feature
In case of death claim, in addition to the
Sum Assured payable on death, All
Premiums Paid, (excluding the first year
premium, extra premiums and premiums for
rider benefits), will be refunded. This is the
first time that such a feature has been
introduced. The result is a continuously
increasing Risk Cover from the second
year onwards.
Saumitra basu lic agent
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
17. Loyalty Addition
With profit Without
• Identical to profit
bonus • Meager amount
• 165, 174, 179 • 111, 150
Saumitra basu lic agent
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. 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. 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. 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. 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. 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. 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. 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. 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. 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
28. SARAL VS OTHER PLANS
• YARDSTICKS TO ANALYSE A PLAN?
. RISK COVER
. MATURITY VALUE
. PREMATURE WITHDRAWAL
Saumitra basu lic agent
29. SARAL Vs TABLE 14
Age 30 Age 30
14-17 Monthly : 1000 165-17 Monthly 1000
1. MATURITY : SA+BONUS 1. MATURITY : MSA+LA
200000+153000 = 353000 224750+190400 = 415150
2. RISK COVER : (Ex 5 yrs) 2. RISK COVER : (Ex 5 yrs)
SA+BONUS DSA + RET. OF PREMIUM
200000+45000 = 245000 250000+48000 = 298000
3. 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. Agent’s Commission
Policy Term First Year 2nd & 3rd Thereafter
Year
15 years & 25% 7.5% 5%
above
10 to 14 20% 7.5% 5%
years
Bonus 40% of FY
Commission commission
Saumitra basu lic agent
