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Nath Balakrishnan

LIC's Jeevan Anand incorporates the features of both an endowment and a whole life policy. Let us examine the features.

How the plan works

As in the case of a regular endowment plan, the policyholder is required to pay premiums over the policy term. The policy is a "with profits", meaning bonuses declared will accrue over the plan's term. Bonus declared is of the simple reversionary type, is not guaranteed and will be a function of the Corporation's investment performance.

Payout under the plan

If the policyholder dies during the plan's tenure, the sum assured chosen along with the bonuses that have accrued till such time will be paid out to the beneficiary and the policy will terminate.

On survival up to maturity, the policyholder will receive the sum assured and all the accumulated bonuses. A final additional bonus, if any, may also be paid out. In such a case, the risk cover for the policyholder continues till death, on which an amount equal to the sum assured will be paid out further. However, there will be no bonus component attached to the payout on death after the premium paying term has ended.

Accident Benefit Rider

The plan also incorporates an accident benefit rider. However, the cap on the amount is Rs 5 lakh. The premium for the rider is built in to the basic plan itself. The amount under the rider will be paid if the policyholder dies in an accident. This payout is over and above the basic sum assured. The maximum age at which this rider ceases is 70. Should the policyholder suffer permanent disability because of an accident, the sum assured under this rider will be paid out in instalments.

Surrender value

The policy acquires a guaranteed surrender value after it has been in force for three years. This value is 30 per cent of all premiums paid, excluding the first year premiums. In the event of the policyholder stopping premium payments after three years', the policy will automatically become paid-up; the sum assured will also get reduced in proportion.

Other plan features

A loan can be taken against this policy. Further, the policyholder is also entitled to a rebate on the premium payment depending on the amount of the sum assured chosen and the plan duration.

(Readers are requested to compare products featured under this column with similar ones offered by other players.)

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