The Hindu Business Line : LIC's Jeevan Anurag

ALONG with the joy of having a child comes the responsibility of securing its future. In the process of charting out a roadmap for one's offspring, it is imperative to plan for monetary outflows that are associated with providing quality education.

Other events, such as the wedding of one's child, are milestones that call for much careful financial planning. It is to address this need that LIC has launched the Jeevan Anurag plan.

Key features

Under the plan, the payment of benefits commences three years before the plan's maturity and the payout is made in phases.

For example, if one considers a 15-year-term plan, the policyholder would receive 20 per cent each of the sum assured in years 12, 13, and 14 of the plan; the remaining 40 per cent of the sum assured along with the accumulated reversionary bonuses and a terminal bonus, if any, get paid out on the policy's maturity. Bonuses are a function of the corporation's investment performance and are not guaranteed.

Should the policyholder die during the policy's term, the sum assured under the plan gets paid out immediately; the beneficiary would also receive the benefits at pre-determined timelines as mentioned earlier, in spite of the sum assured having been paid out.

This ensures that the child's progress is not hindered due to want of funds.

Premium payment

Premium can be paid annually, half-yearly, quarterly or monthly. The policyholder may chose to pay such premiums over the entire term of the policy, or over a term less than the policy's duration.

In the latter case, if one assumes the policy term as `x', the premiums have to be paid over a term of (x-3) years. A single premium payment option is also available.

Riders

A set of three riders can be attached to the basic plan: The Accidental Death and Disability Benefit (ADDB) Rider, the Term Assurance Rider or the Critical Illness Rider.

Under the ADDB rider, in case the policyholder suffers total permanent disability because of an accident, the sum assured under the rider would be paid out over 10 years as monthly instalments.

Other features

The policy becomes paid-up after three years' premiums have been paid. The policy also acquires a guaranteed surrender value after this time period. Loans can be taken against this policy after it has become paid-up.

Policyholders would also be entitled to a rebate depending on the mode of premium payment and the size of the policy.

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

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