SOME SPECIAL COMBINATION PLANS

SALARY SAVINGS SCHEME (SSS) The SSS is intended to help salary earners. Many of them find it difficult to cope with the multiple demands on their monthly incomes. The immediate requirements will get priority over insurance premiums. Ultimately, the defaults may continue and the policy will lapse. In order to avoid such contingencies, the SSS provides for deduction of the premium every month from the salary. The employee gets his salary only after deduction of premium. The employer sends to the insurer all premia deducted from all employees in one lump sum. The employee does not have to bother about paying the premium to the insurance office. The deduction becomes compulsory like Income Tax, Provident Fund and other statutory deductions. Life Insurance premium becomes a first change on his salary. He adjusts his living to his net income. The insurer benefits because the payment of the premium is assured, as long as the employee is in service. The procedures of accounting become simple because there is only one transaction for all the employees under one employer. This advantage is lost if the number of employees under one employer is very small. Therefore, the SSS is made available only if there is a minimum number of say, 15 employees. There is no maximum limit. Because of the assured receipt of premium, lapsations are almost zero. Lapsations can still happen if the salary in a month is less than the premium payable because of absence without salary or some other reason. Such instances may be few, but may need more effort for verification and correction. Problems may occur also if the employee is transferred to different departments or locations and the instructions about deductions are not conveyed. This can be avoided if the insurer is prompt in reconciling the remittances received from the employers. Since the lapsation of SSS policies is expected to be low and the cost of service is also low, the premium on a SSS policy is not calculated in the way the monthly mode premium is normally calculated. The extra-load on the monthly mode of premium payment, is waived in the case of SSS policies. The premium is calculated as if the mode is yearly and then divided by 12. SSS policies are issued only after the employer has agreed to make deductions regularly from the salaries of the employees and remit the premiums to the insurer. The employee has to authorise the employer to deduct the premium from his salary, such letters of authority are collected along with the proposal for insurance and are sent to the employer by the insurer, after the proposal has resulted into a policy, with details of policy number and amount of premium. The insurer's administrative procedures and the employer's procedures have to match, if the system has to function smoothly.When the insurer sends a demand list to the employer, listing out the deductions to be made, the names must be arranged in the order in which the employer will find it most convenient. The list cannot be in policy number order, as that is irrelevant to the employer. The names may have to be listed department-wise or code number-wise or rank-wise as the employer would like. If the employer has many departments, even separate demand lists may have to be provided for each department.

There will be a gap between the time the policy is completed and the time advice for premium deduction is sent to the employer. To cover this time gap, usually the first two monthly premiums are collected with the proposal and the machinery is set in motion for collecting the third monthly premium onwards through the SSS. Even though arrangements are made with the employer for deduction of premium from the salaries, it is understood that the responsibility for keeping the policy in force is entirely that of the policyholder and not that of the employer. There is no contract with the employer as in the case of Group Insurance Schemes. If the premium is not deducted for any reason, the employer is not liable for any consequences. The employee, who is the policyholder, has to ensure that the policy is kept in force. SSS differs from other policies only in respect of the method of payment of premium. The facility is available only if (i) the employee is the policyholder as well as the life insured and (ii) the instalment monthly premium is at least Rs.30 An added advantage of the SSS is that there is a group pressure to buy life insurance, making the job of an agent slightly easier. The resistance would be less and the relationship with the group can be strong.

JEEVAN BHARTI-I Jeevan Bharti-I is a plan exclusively for women. It is a with profit plan having special features considering the needs of women. This is a money back plan having Accident Benefit, Critical Illness Benefit and Congenital Disability Benefit as optional Riders. Plan is available in 15 & 20 Term and Yearly mode only. Eligibility Conditions and Restrictions Basic Plan a) Minimum Sum Assured : Rs.50,000/b) Maximum Sum Assured c) Minimum age at entry : d) Maximum age at entry : 55 e) Maximum age at maturity : 70 years nearest birthday f) Policy Term : 15 & 20 years The Sum Assured shall be in multiples of Rs. 5,000 Benefits: a) Death Benefit An amount equal to the Sum Assured under the basic plan along with Reversionary Bonuses, and Final Addition Bonus, if any, will be payable. b) Survival Benefits Survival benefits will be payable 20% of Sum Assured at end of every 5th year during the Policy Term. c) Maturity Benefit For policy term of 15 years: 60% of the Sum Assured under the basic plan along with vested Reversionary Bonuses and Final Additional Bonus, if any, will be payable. For policy term of 20 years: 40% of the Sum Assured under the basic plan along with vested Reversionary Bonuses and Final Additional Bonus, if any, will be payable. Special Features

: 18 years

Rs 25,00,000/years completed nearest birthday

1. Encashment of Survival Benefit as and when needed: The policyholder at her option may avail the survival benefit any time on or after its due date. If opted to avail later, increased survival benefit at the rate decided by the corporation from time to time will be payable. 2. Flexibility to pay premiums in advance: The mode of premium payment is only yearly under this plan. However, policyholder may pay the next yearly premium in advance in installments (maximum up to 3 installments) during the year. If premiums are paid in advance a premium rebate may be allowed as may be decided by the Corporation from time to time 3. Option to receive maturity proceeds in the form of an annuity: The policyholder shall have the option to receive the maturity proceeds in the form of annuity. The rate of annuity will be based on the annuity rates prevalent at the time of stipulated Date of Maturity. 4. Auto Cover: After two years premiums have been paid, whenever premium payment is discontinued, the life cover for full sum assured will continue for 3 years from the due date of first unpaid premium. If death occurs during the Auto Cover period, then death benefit after deducting unpaid premiums, with interest is payable along with the vested bonus, if any. The auto cover shall not be available for rider benefits. The following riders are available under this plan:

A. CRITICAL ILLNESS (CI) RIDER : An amount equal to the Critical Illness Rider Sum Assured is payable in case of diagnosis of defined categories of critical illnesses. A person is eligible for this benefit upto a maximum age of 60 years but subject to a maximum of the policy term. This benefit can be availed for a minimum Sum of Rs 50000 and for a maximum Sum equal to the Sum assured under the basic plan subject to the maximum of Rs 5 lakh overall limit taking all critical illness riders under all existing policies of the Life Assured. B. ACCIDENT BENEFIT RIDER: An additional amount equal to the Accident Benefit Rider Sum Assured is payable upon death or total and permanent disability due to accident during the policy term. This benefit can be availed for a minimum sum of Rs 50000 and for a maximum sum equal to the Sum Assured under the Basic Plan subject to the maximum of Rs.50 lakhs. C. CONGENITAL DISABILITIES BENEFIT (CDB) RIDER: This rider can be opted for by a female between the ages of 18yrs and 35 years. An amount equal to 50% of the CDB Sum Assured is payable if the Life Assured gives birth to a child with specified congenital disabilities. This benefit is available for a maximum of two such children and this benefit ceases at the age of 40 years. This benefit can be availed for a minimum Sum of Rs 50000 and a maximum sum of Rs 500000. D. Premium Waiver under Critical Illness (Optional): If opted will waive all the future premiums on the occurrence of the critical illness. COOLING OFF PERIOD: If you are not satisfied with the Terms and Conditions of the policy, you may return the policy to us within 15 days

JEEVAN TARANG Eligibility Min Entry Age Minimum Sum Assured Term 0 years (nearest birthday) Rs.1,00,000/5 Max 60 years (nearest birthday) No Limit 35

Plan Details: The plan is a combination of Whole life and Money-back plan. The policy provides for annual survival benefit at a rate of 5.5% of the Sum Assured for lifetime after the chosen Accumulation Period. Under this policy, Life cover is available upto age 100. Accumulation Period The plan offers three Accumulation periods - 10, 15 and 20 years. During this period the policy accrues the bonus. Benefits Survival Benefits the survival benefits are paid at the end of the selected accumulation period. It also includes the bonus amount. After the completion of the accumulation period 5.5% of the Sum Assured is payable every year. Maturity Benefit The Sum Assured along with Loyalty Addition, if any, will be payable on survival of the life assured to the policy anniversary coinciding with or immediately following the completion of 100 years of age. Death Benefits The Sum Assured, along with bonuses is payable in case of death of the Life Assured during the Accumulation Period. Riders Accident Benefit Rider Option (Allowed for Regular Premium policies only):Accident Benefit Option will be available on payment of additional premium. This benefit is available under Regular Premium policies only and it is not available under Single Premium policies. Term Assurance Rider Option: Term assurance as optional rider will be available under this plan during the Accumulation Period. The premiums for this option are payable during the premium paying term.

Critical Illness Rider Option: An amount equal to Critical Illness Rider Sum Assured will be payable in case of diagnosis of defined categories of critical illnesses during the Accumulation Period. The maximum cover for this rider will be Rs.5 lakh. Premium Waiver Benefit Option under Critical Illness Rider: This is an optional benefit under Regular Premium policies, which may be opted in case of the following: (i) The critical illness rider has been opted for, and (ii) The Sum Assured under the Basic Plan is equal to the Critical Illness Rider Sum Assured (iii) The chosen Accumulation Period is such that the premium payment ceases on or before the policy anniversary at which the Life Assured completes 60 years (nearest birthday) of age. All three optional rider benefits mentioned above shall be available during Accumulation Period only. Participation in profits Policies under this plan shall participate in profits of the Corporation, which will be payable on survival to the end of the Accumulation Period or on earlier death. After the Accumulation Period, policies will be entitled to receive a Loyalty Addition payable on maturity or earlier death NEW BIMA KIRAN Suitability

For young men and women who wish to provide family protection at an affordable premium, i.e. maximum coverage plan with minimum outlay. As compared to Bima Sandesh, this plan offers loyalty additions and a free insurance cover and a built in accident benefit For a person aged 30 years, for a term of 25 years, premium per Rs. 1000 per annum works out to only Rs.12.65 as against Rs. 9.35 for Bima Sandesh

Salient Features

Full sum assured is paid on death during the term, while on survival the total premiums paid are refunded It has a built in accident benefit, loyalty addition and free insurance cover after maturity

Benefits On Death during the term

Full sum assured + loyalty additions

Accident Benefit

If the person happens to die due to an accident an amount equal to sum assured is given to the nominee or legal heirs. (exclusive of the maximum limit of 5 lakhs )

On Surviving to the term

A sum equal to total premiums paid is refunded + a minimum loyalty addition

Loyalty Additions

Loyalty additions payable on death or on maturity are based on completed term and premiums paid Policy Term 15-19 years 20-24 years 25-29 years 30 years Free Insurance Cover

Loyalty Additions(% of premium paid) 25% 35% 45% 55%

On survival to the term a free insurance cover for a period 10 years is given on the following scale: Policy Term Free Insurance cover 15-19 years Rs 300 per 1000 sum assured 20-24 years Rs 400 per 1000 sum assured 25-29 years Rs 500 per 1000 sum assured 30 years Rs 600 per 1000 sum assured Other Conditions Minimum sum assured :Rs. 1,00,000 Maximum sum assured:Rs. 10,00,000 Minimum Term :10 years Maximum Term: 30 years Minimum premium must be Rs.800 per annum Minimum age at entry : 18 years Maximum age at entry : 45 years Maximum maturity age: 60 years Policy is given to all male lives. Female lives under category I and II are also given

PLANS COVERING HANDICAPPED Physically handicapped persons are insured. Extras are charged in some cases like, loss of both arms, deaf in both ears, blind in both eyes, etc. Partially handicapped persons are mostly accepted without extra premium, except in certain plans. For the benefit of handicapped dependants JEEVAN AADHAR plan was introduced in1996. The plan was specially designed so that an individual or member of Hindu Undivided Family can take an assurance on his/her own life to provide for lump sum and an annuity to the handicapped dependant. The provision is in the nature of a limited payment whole life assurance policy. The payment

is made to the nominee under the policy, who will be either the handicapped dependent or any other person or a trust, to be utilized for the benefit of the handicapped dependant The premiums under Jeevan Aadhar are eligible for tax benefit under Sec. 80DD of Income Tax Act, 1961. The definition disability under rule 11A of Income Tax Rules,1962 for this purpose is rather stringent in Jeevan Aadhar as such is thus not catering to thehe needs of those handicapped dependents whose degree of handicap is lower than the specified levels. Keeping in mind the guardians of such lives who may be willing to provide for the dependents even without the benefit under Sec. 80DD of Income Tax Act, it is decided to introduce JEEVAN VISHWASin1999. Whiledeveloping the plan, feedback received from various sources on the benefit structure of Jeevan Aadhar is taken into account. Jeevan Vishwas This policy covers the life risk of the proposer _ parent or guardian of a physically- or mentally-handicapped person _ and provides a regular income to the dependent. The policy is available for a minimum sum assured of Rs. 50,000 which can be scaled up in multiples of Rs. 25,000. The proposer has to be between 20 and 65 years of age at the time of taking the policy. The policy term is between ten and 40 years while the premium paying term is between ten and 25 years. It is also possible to make a single premium payment. The policy pays the basic sum assured along with the accrued guaranteed additions and loyalty additions if the proposer survives the maturity date of the policy or on his death when the policy is in force. In either case, the payment will not be made in lumpsum. Only 20 per cent of the basic sum assured, along with the additions accrued (called the notional sum assured or NSA), will be paid. The guaranteed addition is at Rs. 60 per Rs. 1,000 of basic sum a ssured for each completed policy year. Loyalty additions are available, subject to certain conditions. The remaining 80 per cent will be paid only in the form of an annuity. That is, payments will be paid by LIC periodically to form a regular income for the handicapped person for whose benefit the policy has been taken. Annuity options There are various modes of payment the proposer can choose from. A regular income for life, or a regular income assured for five, 10 or 15 years, and then for life, and a third choice is a regular income for life with return of notional purchase price (8 0 per cent of the basic sum assured along with the additions). The choice of the period has a bearing on the amount of the annuity with a longer `certain' period meaning lower monthly payments. The payments from the LIC stop with the death of the beneficiary of the policy. In case the handicapped dependent dies before the proposer, and in the time when the policy is in force, the latter can either surrender the policy if it has acquired surrender value at that time. Or, he can opt to continue with it and keep making premiu m payments. He can also opt for either lumpsum benefits or a 20 per cent lumpsum followed by an annuity with the

remaining 80 per cent. If the proposer also dies before the maturity of the policy, the benefits go to his nominee. The policy also has an accident benefit on the annual premium option. Jeevan Aadhar Jeevan Aadhar is also a policy that covers the life risk to the proposer and pays an annuity to the handicapped dependent or to any person or a trust for the benefit of the dependent. This policy varies slightly from Jeevan Vishwas in that the guaranteed additions is Rs. 100 per Rs. 1,000 sum assured for each completed policy year and will accrue till the proposer is 65 or until his death, whichever is earlier. This policy also carries a `terminal addition,' like loyalty addition and will depend on the working experience of the LIC under this policy. It will apply only if the policy is in full force and if premiums are paid for at least 10 years. Jeevan Aadhar too provides the same 20 per cent (of the notional sum assured) lumpsum payment on the death of the proposer, the remainder going towards providing an annuity for 15 years assured and after that for the life-time of the handicapped person. The flexibility introduced by Jeevan Vishwas is a choice of varying annuity periods (five, 10 and 15 years) and the option of annuity with return of NSA. The lumpsum is not available if the proposer outlives the policy term and only the annuity is paid. If the dependent dies before the proposer and if the policy is in force, the proposer gets a reduced paid-up sum assured, or he can take a refund of the premiums paid, less extra premiums and accident benefit (available under the policy) premiums. The policy is available for sum assured starting from Rs. 50,000 and the proposer has to be between 22 and 60 years at the time of taking the policy (Jeevan Vishwas is more flexible on this count). The premium-paying term is worked out backwards with th e maximum age at which premiums can be stopped is 70. It is worth comparing the costs of taking up any other annuity plan of the LIC along with a pure life risk cover. The two policies are similar in aim, but Jeevan Vishwas has more flexible terms. Yet, it is Jeevan Aadhar that gives the beneficiary a better payout with its 10 per cent guaranteed addition compared to the 6 per cent under Jeevan Vishwas. There are other points of difference. Jeevan Aadhar does not give a lumpsum payment on the maturity of the policy while Jeevan Vishwas does. The latter is also more friendly in choice of terms of the certain payment of annuity as well as offering return of the notional purchase price (of the annuity). Jeevan Aadhar gives a better tax benefit. Under Section 80 DDA of the Income-Tax Act, the life assured can claim a deduction of up to Rs. 50,000 on the premium paid for such a policy.