Life Insurance Corporation of India (LIC) has launched its much-awaited term insurance policy plan Jeevan Amar, which is much cheaper than the recently withdrawn Amulya Jeevan Term Plan. Not only is the new term plan more affordable, but it is more flexible and has much broader features.
As Jeevan Amar is a term plan, it is a no-profit plan, and it is also a non-linked plan. This means, the plan is not market-linked and will not have any maturity value and in case of the unfortunate demise of the life insured during the policy term only the death claim will be payable to the nominee, provided the policy is in force.
Jeevan Amar Yojana has a minimum policy term of 10 years and a maximum term of 40 years, while the minimum entry age is 18 years (full) and the maximum entry age is 65 years (last birthday), but the maximum cover closing age is 80 years.
There will also be the flexibility to choose the Sum Assured (SA) as either Level SA or Enhancing SA. If level SA is selected, the death benefit will remain at the same level during the policy term, whereas in case of increase in SA, the death benefit will remain at the same level during the first 5 policy years, but the original for the next year Insurance (BSA) will increase by 10 percent for 15 years or the end of the policy term (whichever is earlier) and then remain constant at that level for the remaining policy term. However, the increased SA can not be more than twice the BSA.
There will be flexibility in choosing how to receive the death claim amount, which can be selected at the time of the proposal or during the policy term. In addition to receiving the death claim in a lump sum, the policyholder can choose to receive the full death benefit in installments or a part of it in lump sum and installments in a selected period of 5, 10 or 15 years.
Under this scheme, the minimum BSA can opt for Rs 25 lakh, and there is no maximum limit, but the maximum cover limit will depend on the age and income level of a person. BSA can be opted for life cover up to Rs 1 lakh to Rs 1 lakh and then Rs 10 lakh to many.
There will be three options to pay a premium – Single-Premium, Regular Premium, and Limited Premium. Under the limited premium, the two options of premium paying term (PPT) are 5 years less than the policy term and 10 years less than the policy term. However, the maximum premium closing age will be 70 years.
No surrender value will be available under the regular premium option, but it will be available under the single premium and limited premium options subject to specific terms and conditions.
The premium amount will be different for male and female as well as for smokers and non-smokers. While the premium for smokers will be higher than that of non-smokers, male policyholders will also have to pay a higher premium than female policyholders.
At inception, life is to select the proposed smoker or non-smoker category and a person who chooses the non-smoker category is to undergo an additional urinary cotinine test.
The minimum installment premium will be Rs 3,000 under the regular and limited premium options, while under the single premium option, the minimum installment premium will be Rs 30,000.
The following is a sample premium table showing premiums for non-smoking men and women in the age group of 20 years, 30 years under regular premium option for level SA of Rs 1 crore for a policy term of 10 years. And 40 years