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Step 1 – the policyholder chooses the Sum Assured and the death benefit option. There are three types of options which can be chosen. These are:
Step 2 – the policyholder then chooses the plan tenure and the mode in which premiums would be payable (annually, half-yearly, quarterly or monthly).
Step 3 – riders can be added for a more comprehensive coverage.
Step 4- if the life insured dies during the plan term, the death benefit would be paid. This benefit would depend on the death benefit option chosen when buying the plan.
Step 5 – If the plan matures, no benefit is payable to the policyholder as this is a pure term plan.
Raghav, a non-tobacco user male aged 45 years buys the plan for a Sum Assured of Rs.50 lakhs. He chooses the policy term of 30 years.
Option 1 – if he opts for the first option of Basic Life Cover the premium would be Rs.11, 400. If Raghav dies during the plan tenure Rs.50 lakhs would be paid as death benefit.
Option 2 – if he opts for life cover + monthly income benefit the premium would be Rs.15, 350. If Raghav dies during the plan tenure, Rs.50 lakhs would be paid immediately. Moreover, from the next year, Rs.20, 000 would be paid as monthly incomes for 10 years.
Option 3 – if the third option of Life Cover + increasing monthly income is chosen, the premium would be Rs.17, 000. If Raghav dies during the plan tenure, Rs.50 lakhs would be paid immediately. From the next year, Rs.20, 000 would be paid as monthly income. In the year after that, the monthly incomes would increase to Rs.22, 000 and so on.
Option 4 – if the plan matures and Raghav is alive, no benefit is payable.
|Age at entry (in completed years)||18 years||60 years|
|Age at maturity (in completed years)||NA||75 years|
|Term of the plan||10 years||40 years|
|Premium paying options||Regular pay|
|Premium Paying term||Equal to the plan tenure|
|Sum Assured||Rs.25 lakhs||Rs.100 crores|
What is not covered by the plan?
If the life insured dies due to suicide within one year of plan commencement or revival, the premiums paid are refunded.
Below are the sample rates of premium (inclusive of taxes) payable by a male at different ages and for different death benefit options. The premiums also show the variation due to smoking habits. The Sum Assured is taken to be Rs.50 lakhs and the plan term is taken to be 30 years for the calculations.