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The premiums allocated to purchase units will be strictly invested according to the investment pattern committed in various fund types. Various types of fund and their investment pattern will be as under:
Fund Type |
Investment in Government / Government Guaranteed S ecurities / Debt
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Short-term investments such as money market instruments (including Govt. Securities /Debt)
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Investment in Listed Equity Shares
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(i) Bond Fund
(ii) Secured Fund
(iii) Balanced Fund
(iv) Growth Fund |
Not less than 80%
Not less than 70%
Not less than 60%
Not less than 30%
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100%
Not more than 90%
Not more than 80%
Not more than 50% |
Nil
Not more than 20%
Not more than 30%
Not more than 60% but not less than 50%
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The Policyholder has the option to choose any ONE of the above 4 funds. In case no fund has been opted for, the allocated premiums shall, by default, be invested in the SECURED FUND.
Units will be allotted based on the Net Asset Value (NAV) of the respective fund as on the date of purchase of Units. There is no Bid-Offer spread (the Bid price and Offer price of units will both be equal to the NAV). The NAV will be computed based on investment performance under each fund type and shall be calculated as under:
Market/ Fair value of the chosen fund’s underlying assets
Plus Current Assets, accrued income (net of Fund Management charge and other outgoes) less Current Liability and Provisions
Net Asset Value = Number of units existing in the fund at the valuation date
I) Allocation Rate: The allocation rate applicable to the premium to determine the part of premium utilized to purchase units in the Policyholder’s Unit Account will depend on whether the policy is a Single Premium or Regular Premium contract and on the premium size as under:
Single premium:
Premium Band |
Allocation rate |
25,000 to 49,000 |
0.9500 |
50,000 to 99,000 |
0.9600 |
1,00,000 to 4,99,000 |
0.9640 |
5,00,000 and above |
0.9670 |
Regular premium:
Premium Band |
Allocation rate |
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First Year & 2nd year |
Thereafter |
5,000 to 9,000 |
0.8200 |
0.9750 |
10,000 to 19,000 |
0.8400 |
0.9750 |
20,000 to 49,000 |
0.8500 |
0.9750 |
50,000 and above |
0.8550 |
0.9750 |
Allocation rate for Top-up (additional premium): 0.9875
II) Other Charges: The Following charges shall be deducted by canceling appropriate number of units out of the Policyholder’s Unit account:
i) Life cover and Critical Illness Benefit rider Charge – Charges for Life cover and Critical Illness Benefit Rider will be taken every month by canceling appropriate number of units out of the Policyholder’s Unit Account as per the rate prevalent at the time of policy issue or as amended by LIC from time to time based on actual experience.
ii) Accident Benefit charge: Rs. 0.50 per thousand Accident Benefit Sum Assured per policy year by canceling appropriate number of units out of the Policyholder’s Unit Account.
iii) Administrative charge: Re. 1%o Sum Assured under the Basic Plan subject to a maximum of Rs.1000 in each of the first 2 years.
iv) Policy Charge: Rs. 0.10%o Sum Assured under the Basic Plan in each of the first 2 years.
v) Service Tax Charge: This charge shall be levied on the Life Cover charges and Accident Benefit and Critical Illness Benefit charges, if any, and shall be taken by canceling appropriate number of units on a monthly basis as and when the corresponding Life cover, Critical Illness Benefit and Accident Benefit charges are deducted. The level of this charge will be as per the rate of Service Tax on risk premium, if any, as applicable from time to time.
vi) Flat fee: Rs. 15/- per month will be charged throughout the term of the policy by canceling appropriate number of units out of the Policyholder’s Unit Account.
III) Fund Management Charge: Fund dependent deductible on the date of computation of NAV:
1.00% p.a. of Unit Fund for “Bond” Fund
1.00% p.a. of Unit Fund for “Secured” Fund
1.25% p.a. of Unit Fund for “Balanced” Fund
1.50% p.a. of Unit Fund for “Growth” Fund
IV) Bid/Offer Spread – Nil.
V) Right to revise charges: The Corporation reserves the right to revise all or any of the above charges, including the right to change the manner in which charges are to be recovered. The Corporation may also introduce new charges, as and when such a need may arise. The modification in charges will be done with prospective effect with the prior approval of IRDA after giving the policyholders a notice of 3 months. In case you do not agree with the modified charges, you shall be allowed to withdraw the Bid Value of the units held in your Unit Account without any surrender charge.
Although the charges are reviewable, they will be subject to the following maximum limit:
- Flat Fee will be subject to a maximum of Rs.50 per month.
- Administrative charge shall not exceed Rs.2%o Sum Assured under the Basic Plan subject to a maximum of Rs.2000 in each of the first 2 years.
- Policy charge will be fixed depending on the amount prescribed by the Indian Stamp Act, 1899.
- Fund Management Charge: The Maximum for each Fund will be as follows:
i. Bond Fund |
2.0% p.a. of Unit Fund |
ii. Secured Fund |
2.0% p.a. of Unit Fund |
iii. Balanced Fund |
2.5% p.a. of Unit Fund |
iv. Growth Fund |
3.0% p.a. of Unit Fund |
Duration since date of commencement |
Surrender Charge
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Up to and including 1 Year: |
1% of Bid Value |
More than 1 year: |
Nil |
ii) Regular Premium
Number of years premiums have been paid |
Surrender Charge
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If only one quarterly premium is paid |
100% of Bid Value |
If less than one year’s premium are paid |
60% of Bid Value (i.e. 2 Qly/3 Qly/1 Hly) |
| If 1 year’s premiums are paid |
30% of Bid Value (i.e. 4 Qly/2 Hly/1 Yly) |
| If 5 quarterly premiums are paid |
15% of Bid Value |
| Thereafter |
Nil (i.e. more than or equal to 6Qly/3Hly/2Yly) |
Partial Surrender: You can partially surrender the units during your life time. Partial Surrender may be in the form of fixed amount or in the form of fixed number of units. Partial surrender shall be subject to surrender charges, if any, as mentioned above.
U
nder Single Premium policies, the partial surrender will be allowed subject to a minimum balance of Rs. 10,000/- in the Policyholders Unit Account.
Under Regular Premium policies where less than 3 years premiums have been paid, the partial surrender will be allowed subject to a minimum balance of Rs. 10,000/- in the Policyholders Unit Account.
Under Regular Premium policies where more than 3 years premiums have been paid, the partial surrender will be allowed subject to a minimum balance of two annualized premiums in the Policyholders Unit Account.
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