| Insurance >> Senior Citizens >> Unit Link Products |
| 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). |
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| For the year 2004-05 the two rates of investment return declared by the Life Insurance Council are 6% and 10% per annum. |
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| Objective |
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| 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. The actual benefits payable will depend on the actual performance of the underlying assets of the fund. The performance of the fund is not guaranteed and the cash value may be less than the capital invested. The quotation is for illustrative purpose only and is not a contract of assurance. The precise terms and conditions of this assurance plan are specified in the policy. |
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| Product Summary |
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| This is a life insurance unit - linked product that provides financial protection against death over the 10 year term of plan. The final value of the benefits payable is linked to the value of units in the Unit Fund Account. |
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| The premium(s) paid, after deduction of certain charges, are used to purchase units in your Unit Fund Account. The value of the units in the Unit Fund Account may increase or decrease, depending on the investment return of the assets representing the Fund. |
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| Premiums : |
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| Premiums are payable half-yearly or yearly throughout the term of the policy. A single premium may also be paid. |
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| Charges under the Plan |
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| The following charges will be deducted from the premiums paid, before the allocation of new units in your Unit Fund Account. In case of Single Premium policy, the charges in respect of second and later years will be recovered by canceling units of equivalent value at the beginning of each year. These charges are subject to a change (not exceeding 50% of the existing charges at that time) after every five years. |
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- Mortality charge: This will be a level annual charge, depending on the age at entry
- Accident Benefit charge: This will be a level annual charge of 50 paise per Rs 1000 of Accident Benefit cover. The charge will be the same for all ages at entry
- Annual charge towards administration and commission: This will be a level annual charge, depending on the amount of Sum Assured
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| Other charges under the plan |
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- Bid/Offer spread: This is the difference between the bid price (the price at which units are purchased from policyholders) and offer price (the price at which units are sold to policyholders) of units at any time. A maximum spread of 5% will apply.
- Fund management charge: This will be 1% of the Fund per annum, charged on a weekly basis.
- Lapsation charge: For a policy with regular premiums, in case the premiums are not paid within the grace period of 30 days from the due date, the policy lapses. An administrative charge of Rs.100/- per annum will be charged on the date of lapsation and thereafter on every policy anniversary, by canceling units.
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| Investment of Funds |
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There will be 3 types of funds:
- Secured Fund
- Balanced Fund
- Risk Fund
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| The investment pattern of the Funds will be as follows. |
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| Fund > |
Equity > |
Debt + equity > |
Liquid > |
| Secured Fund |
At least 10% |
At least 80% |
Not more than 20% |
| Balanced Fund |
At least 30% |
At least 80% |
Not more than 20% |
| Risk Fund |
At least 50% |
At least 75% |
Not more than 25% |
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| The policyholder is required to indicate in the proposal form as to which of these funds the balance premium is to be invested in. Switching from one fund to another is allowed twice during the policy term, with a gap of at least two years between the two switches. The cost of switching will be 2% of the cash value of the fund at the time of switching. |
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| Net Fund Unit Value |
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| The Net Fund Unit Value (NFUV) is updated at least once every week by dividing the Net Asset Value of the Fund by the total number of units outstanding at the time of updation. |
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| Death Benefit |
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The following are payable.
- On death during first 6 months: 30% of Sum Assured plus cash value of units
- On death during next 6 months: 60% of the Sum Assured plus cash value of units
- On death after first year: Full Sum Assured plus cash value of units
- On death during the 10th year: Full Sum Assured plus cash value of units plus 5% of Sum Assured provided all 10 years’ premiums are paid.
- On death due to accident anytime during the policy term, an amount equal to the sum assured subject to maximum of Rs.2.00 lakhs, in addition to the death benefit specified above will be paid.
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| Surrender Value |
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| On termination of the policy (for reasons other than death) after completion of at least 1 year but before maturity date, the cash value of units is available, subject to deductions as given below. |
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| Number of years' premiums paid (for regular premium policies) or number of years elapsed (for Single Premium policies)> |
Deduction as % of cash value of units allotted> |
| Regular Premium > |
Single Premium > |
| ½ year (not applicable under yearly mode) |
16.0 |
Not applicable |
| 1 year |
10.0 |
4.0 |
| 1½ year (not applicable under yearly mode) |
7.0 |
3.5 |
| 2 years |
6.0 |
3.0 |
| 2½ year (not applicable under yearly mode) |
5.0 |
2.5 |
| 3 years |
4.5 |
2.0 |
| 3½ year (not applicable under yearly mode) |
4.0 |
1.5 |
| 4 years |
3.0 |
1.0 |
| Thereafter |
Nil |
Nil |
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| Partial Surrender: Up to 50% of the units available can be surrendered (without any deductions as given above) at any time after completion of 3 years from the date of commencement. This facility is available only once during the policy term. |
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| Maturity Benefit |
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| 5% of the Sum Assured along with the cash value of units is payable |
| 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. |
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