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Step 1 – the policyholder chooses the Sum Assured and the coverage option. There are two coverage options to choose from which are as follows:
Step 2 – the policyholder then chooses the plan tenure and whether the premium would be paid in one lump sum (as single premium) or throughout the plan tenure (as regular premium).
Step 3 – in case of death, whether normal or accidental, the death benefit would be paid according to the plan option selected by the policyholder.
Step 4 – if the insured survives the plan tenure, no benefit is paid.
Amit, a 40-year male who does not consume tobacco, buys iCare II plan for a Sum Assured of Rs.75 lakhs and a term of 25 years and pays regular premiums annually.
Option 1 – He chooses Option I. The premium for this plan comes to Rs.22, 350. If he dies during the term of the plan, Rs.75 lakhs would be paid as death benefit.
Option 2 – He opts for Option II for which the premium which he is required to pay is Rs.24, 850. If, during the tenure, Amit faces an accidental death, the benefit his nominee would receive would be Rs.75 lakhs (Sum Assured) + Rs.50 lakhs (the maximum accidental death benefit amount) = Rs.1.25 crores. However, if he dies a normal death, the benefit payable would be the Sum Assured which would be Rs.75 lakhs.
Option 3 – if the plan matures, no benefit is payable.
Death benefit – the death benefit is paid as per the coverage option selected by the policyholder. In case of Option I, the death benefit is paid on death. In case of Option II, besides the basic death benefit payable on death, an additional benefit is payable in case of accidental death. The maximum benefit for accidental death is limited to Rs.50 lakhs. The death benefit is defined as higher of the following:
In case of single premium policies:
If age is below 45 years – 125% of the single premium or the chosen Sum Assured
If age is 45 years and above – 110% of the single premium or the chosen Sum Assured
In case of regular premium policies:
For all ages if the chosen plan term is between 5-10 years – 5 times the annual premium, 105% of all premiums paid or the chosen Sum Assured
If age is below 45 years if the chosen tenure is 10 years and above - 10 times the annual premium, 105% of all premiums paid or the chosen Sum Assured
If age is 45 years and above - 7 times the annual premium, 105% of all premiums paid or the chosen Sum Assured
|Age at entry (in completed years)||18 years||60 years|
|Age at maturity (in completed years)||NA||65 years|
|Term of the plan||Regular premium – 5,10,15,20,25 or 30 years
Single premium – 5,10 years
|Premium paying options||Regular pay or Single Pay|
|Premium Paying term||Regular Pay - Equal to the plan tenure
Single Pay – once at plan inception
|Sum Assured||For age 60 years and term 5 years :
Option I – Rs.87,423
Option II – Rs.85,875
For age 18 years and term 30 years:
Option I – Rs.306,478
Option II – Rs.288,257
Below are the sample rates of premium (exclusive of any tax) payable by a non-tobacco user male for a combination of different ages, cover option and Sum Assured. The term is taken to be 25 years and premiums are paid annually for the entire duration.