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Step 1 – the policyholder chooses the Sum Assured, the term of the plan and the premium paying frequency.
Step 2 – Based on the life insured’s age and the above-mentioned factors, premiums are computed which are payable throughout the term of the plan.
Step 3 – in case of death of the life insured within the term of the plan, the death benefit is paid in lump sum.
Step 4 – If the plan matures and the life insured is alive, 110% of the premiums paid by the policyholder throughout the term of the plan are returned back.
Ramesh, a non-smoker male aged 35 years, buys iShield Plan for a term of 20 years. He chooses a Sum Assured of Rs.20 lakhs and annual premium paying frequency. The premium charged from Ramesh is Rs.11, 760
Option 1 – If Ramesh dies during the 10th year of the plan, the death benefit would be paid. The death benefit is higher of the following:
Thus, Ramesh’s nominee would get Rs.27.50 lakhs as death benefit.
Option 2 – If Ramesh survives the plan tenure of 20 years, the maturity benefit payable to him would be calculated as follows:
The Assured Death Benefit would depend on the plan tenure in which the life insured dies and is calculated as follows:
|Plan tenure when death occurs||Assured Death Benefit|
|1-10th policy year||100% of the Sum Assured|
|11th-20th policy year||110% of the Sum Assured|
|21st-25th policy year||120% of the Sum Assured|
Maturity Benefit – when the chosen tenure expires and the plan matures, 110% of the total premiums paid by the policyholder during the plan term is refunded back.
|Age at entry (in completed years)||18 years||55 years|
|Age at maturity (in completed years)||NA||65 years|
|Term of the plan||10 years||25 years|
|Premium paying options||Regular pay|
|Premium Paying term||Equal to the plan tenure|
|Sum Assured||Rs.15 lakhs||Rs.5 crores|
If the life insured dies due to suicide within one year of plan commencement, 80% of the premiums paid are refunded.
If the life insured dies due to suicide within one year of reviving a lapsed policy, higher of 80% of the premiums paid or the applicable Surrender Value in the plan would be payable as death benefit.
Below are the sample rates of premium payable by a non-smoking male for different combinations of age, Sum Assured and the chosen plan term. The premium is assumed to be paid annually.
If premiums for the first three years have been paid and then future premiums are discontinued, the lapsed policy can continue as a paid-up policy. A paid-up policy would pay a reduced death benefit while the maturity benefit remains constant at 110% of the premiums paid. The reduced death benefit would be calculated as follows:
If death happens in the first 10 policy years - Sum Assured * (number of premiums paid/number of premiums payable)
If death happens in the 11th to 20th policy year – 110% * Sum Assured * (number of premiums paid/number of premiums payable)
If death happens in the 21st to 25th policy year – 120% * Sum Assured * (number of premiums paid/number of premiums payable)
If a Sum Assured of Rs.20 lakhs and above is chosen, a rebate is allowed in the premium. This rebate is higher for higher policy terms and is as follows:
|Sum Assured level||Term – 10 years||Term – 11-15 years||Term – 16-20 years||Term – 21-25 years|
|Rs.20 lakhs to Rs.50 lakhs||Rs.0.65 per Rs.1000 Sum Assured||Rs.0.45 per Rs.1000 Sum Assured||Rs.0.30 per Rs.1000 Sum Assured||Rs.0.25 per Rs.1000 Sum Assured|
|Rs.50 lakhs and above||Rs.1.50 per Rs.1000 Sum Assured||Rs.1.20 per Rs.1000 Sum Assured||Rs.0.95 per Rs.1000 Sum Assured||Rs.0.90 per Rs.1000 Sum Assured|