Re: Clarifications in respect of Revival, SB claim and Death claim settlement under
LIC’s Bima Gold plan No-174 and LIC’s New Bima Gold plan No-179
With reference to LIC’s Bima Gold plan No-174 and LIC’s New Bima Gold plan No-179,
we have received references from offices in respect of 1) Revival of policy under SBcum-
revival method 2) Requirements for revival of policy under auto cover period 3)
Recovery of outstanding premiums in settlement of survival benefit claims 4) Recovery
of premiums to complete policy anniversary in respect of death claims.
We have referred the matter to Actuarial Dept and we have received following
clarifications:-
A) Payment of survival benefit claim with deduction of o/s premiums
1. If premiums falling due
during 6 months immediately preceding the due date
of survival benefit remained unpaid, claim is payable after deduction of such
unpaid premiums with interest thereon provided survival benefit amount is
more than the unpaid premiums with interest.
2. If survival benefit claim falls during auto cover period and premiums under the
policy are outstanding for
more than 6 months as on due date of survival
benefit, then SB claim should be paid after deduction of unpaid premiums with
interest thereon till the due date of the survival benefit, provided survival
benefit amount is more than unpaid premiums with interest. No need to call
for any revival/ health requirements or SB discharge form/ policy requirements
as per rule.
Example:- DOC- 7/5/2008, plan and term- 179-20, sum assured- 5,00,000,
Mode- ECS/ Monthly, FUP- 12/2010, due date of 1
st SB claim instalment-
7/5/2012, Amount of SB instalment- Rs. 50,000 ( SB within Auto cover)
•
Under above policy, auto cover is available for the period from
7/12/2010 to 6/12/2012.
•
1st SB instalment is due on 7/5/2012 which is in auto cover period.
•
Hence SB claim due 5/2012 should be settled after deducting the
outstanding premiums from 7/12/2010 to 7/4/2012 with interest.
Example:- DOC- 7/5/2008, plan and term- 179-20, sum assured- 5,00,000,
Mode- Quarterly, FUP- 5/2010, due date of 1
st SB claim instalment-7/5/2012, Amount of SB instalment- Rs. 50,000( SB after auto cover)
Example:- DOC- 7/5/2012, plan and term- 179-20, sum assured- 5,00,000,
Mode- Quarterly, Instalment premium Rs. 4475/-,Accident Benefit premium
Rs. 125/-, FUP-7/8/2013,Date of death- 15/8/2013
•
As on date of death, policy has not completed 2 years from date of
commencement.
•
Death has taken place within days of grace.
•
Hence, recovery of 3 quarterly instalment premiums from 7/8/2013 to
7/2/2014 amounting Rs. 13425/- should be done from claim amount
payable.
•
Claim is payable for Basic sum assured and Accident benefit , if any.
2. For death claims arising on and after 2 years from the date of
commencement and during the grace period:-
Recovery of all the premiums
for Accident benefit only from the date of first unpaid premium ( FUP) till the
next policy anniversary following the date of death. The recovery of accident
benefit premium should be done irrespective of cause of death.
Example:- DOC- 7/5/2010, plan and term- 179-20, sum assured- 5,00,000,
Mode- Quarterly, Instalment premium Rs. 4475/-, FUP-7/8/2013,
accident benefit premium in instalment Rs. 125/-, Date of death- 15/8/2013
•
As on date of death, policy has completed 2 years from date of
commencement.
•
Death has taken place within days of grace.
•
Hence, recovery of accident benefit premium only for 3 quarterly
instalment premium from 7/8/2013 to 7/2/2014 equal to Rs. 375/-
should be done from claim amount payable.
•
Claim is payable for Basic sum assured and Accident benefit, if any.
3.
For death claims arising during the auto cover period but after expiry of
days of grace
:- No recovery of the premiums from first unpaid premium ( FUP)
till the next policy anniversary following the date of death. Accident benefit is
not payable.
4.
For death claims arising under In force policy( i.e. before FUP) irrespective
of date of death is within or after 2 years from date of commencement
: - No
recovery of the premiums from first unpaid premium ( FUP) till the next policy
anniversary following the date of death. Basic claim and Accident benefit is
payable.
5. If death claim is being considered under SSS mode of policies after applying
“Ex-gratia claims under SSS policies”, (where there is zero or one terminal
default and the total number of defaults/ gaps do not exceed six) then basic
sum assured along with accident benefit, if any, is payable subject to recovery
of gaps/ defaults prior to date of death.
Example:- DOC- 7/5/2010, plan and term- 179-20, Sum assured- 5,00,000,
Mode- SSS , Instalment premium Rs. 1492/-, FUP- 7/2013, Date of death-
15/8/2013, gap premium- 7/2010, 8/2010
•
Under SSS mode policies due date of premium will be treated as 20th of
the day irrespective of actual due date, till the premiums are being
received through salary.
•
In this case, there is 1 terminal default (7/2013) and 2 intermittent
gaps. Hence claim can be considered under ‘Ex-gratia claims under SSS
policies.
•
From death claim amount, 3 SSS premiums with interest will be
recovered which are due prior to date of death.
•
Claim can be considered for basic sum assured and accident benefit , if
any.
6. If death claims is being considered under SSS mode of polices which cannot be
considered under “Ex-gratia claims under SSS policies”, then for ascertaining
the auto cover period, premium position should be shifted back to the extent
of gaps / defaults. From death claim amount, gap/default premiums occurred
before date of death should be recovered with interest as applicable.
Example:- DOC- 7/5/2010, plan and term- 179-20, Sum assured- 5,00,000,
Mode- SSS , Instalment premium Rs. 1492/-, FUP- 8/2013, Date of death-
15/8/2013, Gap premium- 7/2010 to 2/2011. Calculated FUP- 12/2012.
•
In this case, there are 8 intermittent gaps.
•
After shifting back gaps, calculated FUP will be 12/2012. With this
premium position, policy is having auto cover period.
•
Hence, death claim is admissible for full sum assured subject to
recovery of 8 gap premium with interest.
•
Claim can be considered for basic sum assured only.
7. Above provisions are applicable with immediate effect. Past cases need not be
reopened.
All offices are requested to take proper note of the above changes and issue proper
instructions to all offices under their control.
