LIFE INSURANCE CORPORATION OF INDIA
Dept: Product Development “Yogakshema”
Jeevan Bima Marg
Mumbai – 400 021
Ref: CO/PD/54 _______________
All HODs of Central Office
All Zonal Offices
All Divisional Offices
All Branch Offices (through DOs)
MDCs, ZTCs, STCs, NIA and
Audit & Inspection Depts. of Zonal Offices.
Re: INTRODUCTION OF LIC-AADHAAR (Plan No.824)
It has been decided to introduce LIC - AADHAAR (Plan No. 824) with effect from _____________.
The Unique Identification Number (UIN) for LIC-Aadhaar Plan is 512N289V01. This number has to be quoted in all relevant documents furnished to the Policyholders and other users (public, distribution channels).
This is a regular premium paying conventional With-Profits Endowment Assurance plan for individuals possessing Aadhaar card issued by Unique Identification Authority of India (UIDAI). This plan shall be available to standard lives only under applicable non-medical limit. The benefits and other details of the plan are given below.
The benefits payable under an inforce policy are as under:
a) Benefits payable on death:
On death of the Life Assured during the policy term “Sum Assured on Death” shall be payable, which is the highest of
· Basic Sum Assured; or
· 10 times of annualized premium; or
· 105% of all the premiums paid as on date of death.
The premium mentioned above excludes taxes, extra premium and rider premiums, if any.
In addition to the above, Loyalty Addition, if any, shall also be payable if death occurs after completion of 5th policy year.
b) Benefits payable on maturity:
On survival to the end of the policy term Basic Sum Assured along with Loyalty Addition, if any, shall be payable.
c) Participation in Profits:
Provided the policy is in full force, then depending upon the Corporation’s experience the policies under this plan will be eligible for Loyalty Addition. The Loyalty Addition, if any, is payable on death after completion of 5th policy year or on Policyholder surviving to the maturity, at such rate and on such terms as may be declared by the Corporation.
3. OPTIONAL BENEFIT:
This plan provides the following optional rider by payment of additional premium:
LIC’s Accident Benefit Rider UIN (512B203V02): LIC’s Accident Benefit Rider is available as an optional rider by payment of additional premium during the term of the policy. If there be more than one policy with which this or any other Rider covering Accidental Deaths is attached and if the total Accident Benefit Sum Assured under all such policies exceeds Rs.50 lakhs, the benefits shall apply to the first Rs. 50 lakhs Accident Benefit Sum Assured in order of date of policies issued.
If this benefit is opted for, and if Life Assured is involved in an accident, leading to death and such incident shall occur within 180 days from the date of accident then an additional amount equal to the Accident Benefit Sum Assured is payable. However, the policy shall have to be in force at the time of accident irrespective of whether or not it is in force at the time of death.
The premium rate for this rider is as under;
i. Rs. 0.50 per thousand Accident Benefit Sum Assured irrespective of age.
ii. Rs. 1.00 per thousand Accident Benefit Sum Assured, if the Life Assured is engaged in police duty either in any military, naval or police organization and opts for this cover while engaged in police duty.
Accident Benefit Rider shall not acquire any paid-up value and the rider benefit will cease to apply, if policy is in lapsed condition.
4. ELIGIBILITY CONDITIONS AND RESTRICTIONS:
For Basic Plan:
1) Minimum Age at entry : 8 years (completed)
2) Maximum Age at entry : 55 years (nearest birthday)
3) Minimum Policy Term : 10 years
4) Maximum Policy Term : 20 years
5) Maximum Maturity Age for Life Assured : 70 years (nearest birthday)
6) Minimum Basic Sum Assured per life : Rs. 75,000/-
7) Maximum Basic Sum Assured per life : Rs. 200,000/-
The Basic Sum Assured shall be in multiples of Rs. 5000/-.
Age at entry for the Policyholder is to be taken as age nearest birthday except for the minimum age at entry i.e. 8 years, where it is in completed years.
For Accident Benefit Rider:
1) Minimum Entry Age : 18 years (completed)
2) Maximum Entry Age : The cover can be opted for at New Business stage or at any policy anniversary during the policy term.
3) Maximum cover ceasing Age : Same as under the basic plan.
4) Minimum Accident Benefit Sum Assured : Rs. 75,000/-
5) Maximum Accident Benefit Sum Assured: An amount equal to the Basic Sum Assured under the Basic Plan subject to the maximum of Rs.50 lakh overall limit taking all existing policies of the Life Assured under individual as well as group schemes including policies with inbuilt accident benefit taken with Life Insurance Corporation of India and the Accident Benefit Sum Assured under the new proposal into consideration.
The Accident Benefit Sum Assured shall be in multiples of Rs. 5,000/-.
5. MODE OF PREMIUM PAYMENT:
The modes of premium payment allowable are Yearly, Half Yearly, Quarterly, and Monthly (ECS only or through salary deductions).
6. PREMIUM RATES:
The tabular premium rates per thousand Basic Sum Assured are enclosed as Annexure 1.
The Class – I extra premium rates per thousand Basic Sum Assured, which may be applicable at revival stage (as only standard lives shall be eligible at NB stage), are enclosed as Annexure 2.
The above premium rates are exclusive of taxes.
7. GRACE PERIOD FOR PAYMENT OF PREMIUM:
A grace period of one calendar month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 15 days for monthly mode of premium payment.
If the death of the Life Assured occurs within the grace period but before the payment of premium then due, the policy will be treated as inforce and the benefits will be paid after deduction of the said unpaid premium and also the unpaid premium/s falling due before the next policy anniversary.
If premium is not paid before the expiry of the days of grace, the Policy lapses.
If the Policy has not lapsed and the claim is admitted in case of death under the policy where the mode of payment of premium is other than yearly, unpaid premium(s), if any, falling due before the next policy anniversary shall be deducted from the claim amount.
The above grace period will also apply to rider premiums as the rider premiums are to be paid along with premium for the basic policy.
The rebates for basic plan are as under:
Yearly mode : 2% of tabular premium
Half-yearly mode : 1% of tabular premium
Quarterly and monthly mode : NIL
High Basic Sum Assured Rebate:
Basic Sum Assured Rebate (Rs.)
75,000 to 1,45,000 : Nil
1,50,000 to 2,00,000 : 1.50 ‰ Basic Sum Assured
9. CORPORATION EMPLOYEES INSURANCE SCHEME (CEIS) REBATE:
Policy completed under Corporation’s Employee Insurance Scheme (CEIS) will be eligible for the CEIS rebate as a percentage of tabular premium for the basic plan as well as on LIC’s Accident Benefit rider premium, if opted for, at the following rates provided policy is not taken through any intermediary such as Agent/ Corporate Agent/Broker/Direct Sales Executive etc.
Percentage of tabular premium as well as AB rider premium
10 to 14 years
15 years or more
10. COMMISSION PAYABLE TO INTERMEDIARIES & CREDIT TO DEVELOPMENT OFFICERS:
a) Commission rates (as a percentage of premium net of taxes) during the policy term are as under:
Agents and Corporate Agents:
Policy Term 1st Year 2nd & 3rd Year Subsequent Years
10 to 14 years 15% 5.5% 3.75%
15 years & above 18.75% 5.5% 3.75%
Bonus Commission: 40% of 1st year commission.
Policy Term 1st Year 2nd & 3rd Year Subsequent Years
10 to 14 years 16% 5% 3.75%
15 years & above 19.75% 5% 3.75%
Bonus Commission: No bonus commission is payable to brokers.
b) Development Officer’s Credit:
Policy Term Credit (as a % of the first year premium net of taxes)
10 to 14 years 30%
15 years & above 60%
11. PAID-UP VALUE:
If after atleast three full years’ premium have been paid and any subsequent premiums be not duly paid, this policy shall not be wholly void, but shall subsist as a paid-up policy. The Basic Sum Assured under the policy shall be reduced to such a sum, called Paid-up Sum Assured, and shall bear the same ratio to the Basic Sum Assured as the number of premiums actually paid bears to the total number of premiums originally stipulated for in the policy i.e. Basic Sum Assured *(no. of premiums paid / Total number of premiums payable).
Such Paid-up policy shall thereafter be free from all liabilities for payment of the within mentioned premiums, but shall not be entitled to participate in future profits. This Paid-Up Sum Assured is payable on the expiry of policy term or on Life Assured’s prior death.
Notwithstanding what is stated above, if atleast three full years’ premiums have been paid in respect of this policy, and any subsequent premium be not duly paid, in the event of the death of the Life Assured within six months from the due date of first unpaid premium, Basic Sum Assured will be paid after deduction of (a) the premium or premiums unpaid for the basic policy with interest thereon upto the date of death, on the same terms as for revival of the Policy during such period and (b) the unpaid premiums for the basic policy falling due before the next Policy anniversary.
Notwithstanding what is stated above, if at least five full years' premiums have been paid in respect of this policy, and any subsequent premium be not duly paid, in the event of death of the Life Assured within 12 months from the first unpaid premium, Basic Sum Assured will be paid after deduction of (a) the premium or premiums unpaid for the basic policy with interest thereon upto the date of death, on the same terms as for revival of the Policy during such period and (b) the unpaid premium for the basic policy falling due before the next Policy anniversary.
These provisions do not apply to LIC’s Accidental Benefit Rider as it does not acquire any paid up value and the rider benefit cease to apply, if policy is in lapsed condition.
12. SURRENDER VALUE:
The policy can be surrendered at any time during the policy term provided atleast three full years’ premiums have been paid.
Guaranteed Surrender Value:
The Guaranteed Surrender Value shall be a percentage of total premiums paid (net of taxes) excluding any extra premiums and premiums for riders, if opted for. This percentage will depend on the policy term and policy year in which the policy is surrendered and is enclosed as Annexure 3.
Special Surrender Value:
The Corporation may, however, pay Special Surrender Value as applicable as on the date of surrender, provided the same is higher than Guaranteed Surrender Value. The Special Surrender Value will be the discounted value of Paid-up Sum Assured (as defined in Para 11). The discount factors shall be the surrender value factors as provided in Table-1A of Special Surrender Values booklet used for Endowment Assurance plan, and will depend on the policy term and the duration elapsed since the commencement of the policy.
No Loyalty Addition is payable in case of surrender of the policies.
LIC’s Accident Benefit Rider will not acquire any surrender value.
If premiums are not paid within the grace period then the policy will lapse. A lapsed policy may be revived during the life time of the Life Assured, but within a period of 2 consecutive years from the date of first unpaid premium and before the date of maturity, on submission of proof of continued insurability to the satisfaction of the Corporation and the payment of all the arrears of premium together with interest (compounding half-yearly) at such rate as fixed by the Corporation from time to time.
Even though only standard lives shall be eligible at NB stage, on revival of a policy sub-standard lives shall also be considered based on underwriting decision.
The Corporation reserves the right to accept at original terms, accept at modified terms or decline the revival of a discontinued policy. The revival of discontinued policy shall take effect only after the same is approved by the Corporation and is specifically communicated to the Life Assured.
Revival of LIC’s Accident Benefit Rider, if opted for, will be considered only along with revival of the Basic Policy, and not in isolation.
Loan facility is available under this plan, after payment of premiums for at least 3 full years subject to following conditions:
a) The maximum loan as a percentage of surrender value shall be 70% in case of inforce policies and 60% in case of paid-up policies.
b) The rate of interest to be charged for the loan amount would be determined from time to time by the Corporation.
c) No foreclosure action under inforce policies shall be taken under this plan even if there is a default in payment of loan interest. However, any loan outstanding alongwith interest shall be recovered from the claim proceeds at the time of exit.
15. UNDERWRITING, AGE PROOF AND MEDICAL REQUIREMENTS :
U & R department, Central Office, will issue instructions in this regard.
16. SUICIDE CLAUSE:
This policy shall be void
a) If the Life Assured (whether sane or insane) commits suicide at any time within 12 months from the date of commencement of risk, the Corporation will not entertain any claim under this policy except to the extent of 80% of the premiums paid excluding any taxes, extra premium and rider premiums, if any, provided the policy is inforce.
b) If the Life Assured (whether sane or insane) commits suicide within 12 months from date of revival, an amount which is higher of 80% of the premiums paid till the date of death (excluding any taxes, extra premium and rider premiums, if any) or the surrender value, shall be payable. The Corporation will not entertain any other claim under such policy.
17. FORFEITURE IN CERTAIN EVENTS:
In case of fraud or misrepresentation, the policy shall be cancelled immediately by paying the surrender value, subject to the fraud or misrepresentation being established by the Corporation in accordance with Section 45 of the Insurance Act, 1938.
Taxes including Service tax, if any, shall be as per the Tax laws and the rate of tax shall be as applicable from time to time.
The amount of tax as per the prevailing rates shall be payable by the Policyholder on premiums including extra premiums and rider premiums, if any. The amount of tax paid shall not be considered for the calculation of benefits payable under the plan.
The instructions regarding issues related to taxes will be issued by Finance & Accounts Department, Central office, separately, as applicable from time to time.
19. NORMAL REQUIREMENTS FOR CLAIM:
The normal documents which the claimant shall submit while lodging the claim in case of death of the Life Assured shall be claim forms, as prescribed by the Corporation, accompanied with original policy document, NEFT mandate from the claimant for direct credit of the claim amount to the bank account, proof of title, proof of death, proof of accident, medical treatment prior to the death, School/College/employer's certificate, whichever is applicable, to the satisfaction of the Corporation. If the age is not admitted under the policy, the proof of age of the Life assured shall also be submitted.
Where the policy results into a maturity claim or in case of surrender of a policy, the Life Assured shall submit the discharge form along with the original policy document, NEFT mandate from the claimant for direct credit of the claim amount to the bank account besides proof of age, if the age is not admitted earlier.
20. COOLING-OFF PERIOD:
If a Policyholder is not satisfied with the “Terms and Conditions” of the policy, he/she may return the policy sighting the reasons thereof to the Corporation within 15 days from the date of receipt of the policy.
The refund of premium to the Policyholder shall be subject to following deductions:
1. Stamp duty on policy;
2. Proportionate risk premium (in respect of Base Plan and Riders, if opted for) for the period on cover as per C.O. Circular Ref: CO/ PD/ 39 dated 31st December, 2013
21. BACK-DATING INTEREST:
The policies can be dated back within the same financial year. Back-dating interest as applicable at the time of completion of the policy (at the rate as fixed by the Corporation from time to time) will be charged for the period in excess of one month. However, if the policy is back dated to lean months, viz. April, May, July & August, interest is to be charged for period in excess of three months. The period upto 14 days is to be ignored and 15 days or more is to be rounded to a month for this calculation.
Any further instructions would be issued by Actuarial Department, Central Office, as applicable from time to time.
22. POLICY STAMPING:
Policy stamping charges will be 20 paise per thousand of Basic Sum Assured & Accident Benefit Sum Assured, if Accident Benefit rider is opted for, under this Plan.
Normal procedure for Reinsurance shall apply as per applicable Reinsurance Treaty.
It should be ensured that a nomination is made in the policy at the proposal stage as per Section 39 of Insurance Act, 1938. Further efforts should be made at the underwriting stage as well as on subsequent registration so as to eliminate the possibility of presence/involvement of moral hazard to a maximum extent. It should generally be insisted that the nominee should be spouse, children or very close relative of the Life Assured.
On a subsequent assignment as per Section 38 of Insurance Act, 1938 or change of nomination, the notice of assignment or change of nomination should be submitted for registration to the office of the Corporation, where the policy is serviced.
25. ACCOUNTING OF INCOME AND OUTGO:
Instructions regarding the accounting procedure to be followed under the plan shall be issued separately by Finance & Accounts Department, Central office.
26. PROPOSAL FORM :
Specimen proposal forms to be used under this plan are enclosed as Annexure - 4.
27. POLICY DOCUMENT :
The specimen Policy Document will be sent by the Corporate Communications Department, Central Office.
At the time of sale, a client specific Benefit Illustration shall be provided to the Policyholder. Such Benefit Illustration shall be signed by both the prospective policyholder and intermediary and shall form part of the policy document.
Separate instructions shall be issued by Marketing Department, Central Office, in this regard.
Executive Director (Marketing & Product Development)