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Insurance >> Children >> Deffered Endowment Plan
Table No. 41
Features
Product Summary :
This is an Endowment Assurance plan designed to enable a parent or a legal guardian or any near relative of the child (called proposer) to provide insurance cover on the life of the child (called life assured). The plan has two stages, one covering the period from the date of commencement of policy to the Deferred Date (called deferment period) and the other covering the period from the Deferred Date to the date of maturity. The insurance cover on the child’s life starts from the Deferred Date and is available during the latter period.

The Deferred Date in case of Plan No 41 is the policy anniversary date coinciding with or next following the date on which the child completes 21 years of age. In case of Plan No 50 it is the policy anniversary date coinciding with or next following the 18th birthday of the child.

Premiums :
Premiums are payable yearly, half-yearly, quarterly or monthly and this shall cease on the death of the life assured . Premiums are waived on death of Proposer provided this benefit is availed.

Bonuses :
This is a with-profits plan and participates in the profits of the Corporation’s life insurance business after the deferred date. 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.
Benefits
Death Benefit:
The Sum Assured along with vested bonuses is payable in a lump sum upon the death of the life assured after the deferrement period. If death occurs before the deferrement period all premiums paid is refunded.

Maturity Benefit :
Sum assured along with all bonuses declared up to maturity date is payable in lump sum.

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 values are available on the plan on earlier termination of the contract.

Guaranteed Surrender Value :
The policy may be surrendered after it has been in force for 3 years or more. The minimum surrender value allowable under this policy is as under:

(a) Before the Deferred date : 90% of the premiums paid excluding the premium for the first year.

(b) After the Deferred date:
(i) If deferment period is less than 10 years:

90% of the premiums paid before the deferment date excluding the premiums for the first year plus 30% of premiums paid after the deferred date.

(ii) If deferment period is 10 years or more:

90% of a cash option plus 30% of premiums paid after the deferred date.
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 is the discounted value of the reduced claim amount that would be payable at death or maturity. This value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender.

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.
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 ife 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 the 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 (Table 41)
Age at entry: 10 years
Policy Term: 25 Years Deferment period: 11 years
Premium Paying Term: 25 Years
Mode of premium payment: Yearly
Sum Assured: Rs. 1,00,000 /-
Annual Premium: Rs. 2673 /-
End of year Total premiums paid till end of year Benefit payable on death / maturity at the end of year
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 2673 2673 - - 2673 2673
2 5346 5346 - - 5346 5346
3 8018 8018 - - 8018 8018
4 10691 10691 - - 10691 10691
5 13364 13364   - 13364 13364
6 16037 16037 - - 16037 16037
7 18709 18709 - - 18709 18709
8 21382 21382 - - 21382 21382
9 24055 24055 - - 24055 24055
10 26728 26728 - - 26728 26728
12 2073 100000 2100 5500 102100 105500
15 40092 100000 8400 22000 108400 122000
20 53456 100000 18900 49500 118900 149500
25 66819 100000 46400 122000 146400 222000
Note : The proposer will have the option to take a cash payment of Rs.39,890/- on the Deferred Date on cancellation of the policy contract entirely.
Illustration 2 (Table 50)
Age at entry: 10 years
Policy Term: 25 Years Deferment period: 8 years
Premium Paying Term: 25 Years
Mode of premium payment: Yearly
Sum Assured: Rs. 1,00,000 /-
Annual Premium: Rs. 2924 /-
End of year Total premiums paid till end of year Benefit payable on death / maturity at the end of year
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 2924 2924 - - 2924 2924
2 5848 5848 - - 5848 5848
3 8772 8772 - - 8772 8772
4 11696 11696 - - 11696 11696
5 14620 14620   - 14620 14620
6 17544 17544 - - 17544 17544
7 20468 20468 - - 20468 20468
8 23392 23392 - - 23392 23392
9 26316 100000 2100 5500 102100 105500
10 29240 100000 4200 11000 104200 111000
12 35087 100000 8400 22000 108400 122000
15 43859 100000 14700 38500 114700 138500
20 58479 100000 25200 66000 125200 166000
25 73099 100000 46700 124500 146700 224500
i) This illustration is applicable to a non-smoker male/female standard (from medical, life style andoccupation point of view) life.

ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated so that they are consistentwith 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 theProjected Investment Rate of Return that LICI will be able to earn throughout the term of the policy will be6% 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 andthe 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 amounts shown at the end of the policy term.
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