LIC Marriage Endowment/Educational Annuity Policy Review

Marriage Endowment/Educational Annuity Policy Review

Marriage Endowment/Educational Annuity Plan NO- 90 is a With Profit Plan INTRODUCED on 01-07-1985 and WITHDRAWN on –

Marriage Endowment/Educational Assurance plan is a kind of endowment policy.It is mainly suitable to meet the needs of marriage or higher education of the policyholder’s children .In case of early death of the policy holder, the nominee will not get the S.A. and bonus immediately.

Under Marriage Endowment/Educational Annuity plan, basic sum assured or paid up value along with vested bonus shall be payable on the date of maturity only, even though death of life assured takes place before date of maturity.

Due to this provision, Marriage Endowment/Educational Annuity Plan provides an option to kept sum assured to be kept aside to meet the expenses of marriage / education of children in the absence of life assured.

LIC Marriage Endowment/Educational Annuity Plan Parameters

Age at entry:                    Minimum 18 yrs completed

                                          Maximum 60 yrs NBD

Policy term:                      Minimum 5 years

                                          Maximum 25 years

Maximum Maturity age:  70 years

Mode of payment : Yearly, Half-yearly, Quarterly,monthly, SSS.

•    Male lives and female lives cat I, II, III are allowed.
•    Plan is allowed to all classes of EMR.
•    EMR extra will be 75% of plan 14.
•    Plan is allowed under NMG and NMS. If accepted with term rider then under NMS only.

•    Non-standard age proof is allowed sub to maximum maturity age 65 years.
•    Persons having deformity and persons engaged in hazardous occupation are  allowed as per restrictive clause.

•    If policy is taken with term rider, then minimum/maximum sum assured , maximum age at entry will be as per term rider plan restrictions.

Sum Assured:   Minimum     30000 from 1/4/2003 to 31/5/2004

                                               50000 from 1/6/2004

                        Maximum    No restriction

LIC Marriage Endowment/Educational Annuity Policy Rebates

There are two types of Rebates are there in Marriage Endowment Annuity policy they are:

1.Mode rebate                          Yearly 3% of tabular premium

                                                Half-yly 1.5% of tabular premium

2. Sum assured rebate            Up to 30/10/2003 – 25,000 to 49999  Rs. 1/- per 1000 SA

                                                                               50,000 & above  Rs 2/- per 1000 SA

                                                From 1/11/2003    – Upto 50000  nil

                                                 to…………….         50,001 to 1,00,000Rs.1/- per 1000 SA

                                                                            1,00,001 & above  Rs2/- per 1000 SA

LIC Marriage Endowment/Educational Annuity Plan Benefits

Maturity Benefit:

All premiums have been paid,then

                                   Basic sum assured + vested bonus is payable.

If last year’s premiums remains to be unpaid, then after recovering the same with interest, maturity claim for full sum assured is payable.

If policy is in paid up condition, then on date of maturity paid up value + bonus is payable.

Under both cases, maturity claim amount is payable in lump sum or in 10 equal half yearly installment, as per option of the life assured. if life assured had expired before date of maturity , then option will be exercised by nominee.

Death Benefit:

If policy is in full force then,

basic sum assured with vested bonus is payable at the end of selected term

i.e on date of maturity and not immediately after death of life assured.

If policy is accepted with term rider and death takes place before FUP or within days of grace, then sum equal to term rider sum assured is payable immediately to nominee.

Under this Marriage Endowment plan, death claim amount is settled on date of maturity.

Riders on LIC Marriage Endowment/Educational Annuity plan

There are two types of Riders are there in Marriage Endowment plan they are :

Term Rider: It is an attachment to a life insurance policy that provides additional term coverage for the amount specified. If the insured dies during this time, the designated beneficiary(ies) can receive death benefit proceeds.If the policy holder opts for the Term Rider the plan conditions for that are

Age at Entry:    Minimum 18 yrs completed

                          Maximum 50 yrs NBD

Maturity Age:     Maximum maturity age 60 years

Policy term :           Minimum 10 years

                                Maximum 25 years

Mode of payment:  Yearly, Half-yearly, Quarterly,monthly, SSS.

Sum assured :        Minimum 1 LAKH

                                Maximum Term rider sum assured is restricted equal to basic sum assured,                  sub to a maximum of Rs. 25 lakh under all policies including current proposal.

• No paid up value or surrender value will be payable for term rider sum assured. No loan will be available. No Maturity claim for term assurance rider is payable.

• Rider benefit will not be given to handicapped lives.
• If policy is with term rider, then paid up value will not be calculated for term rider

           sum assured.

Death Accident Benefit Rider:

DAB/ EPDB are available under the policy. Sum assured under this policy will be counted for deciding maximum overall limit of DAB held by life assured under all policies.If cause of death is proved to be an accident and if policy is in force, sum equal to basic sum assured is payable immediately as DAB.

Additional Information

PAID UP VALUE :

After paying at least 3 full years premiums, policy will acquire paid up value whichwill be calculated as :-

                                                                 = (No of years premiums paid /No of year’s premiums payable)  x sum assured.

GUARANTEED SURRENDER VALUE:

If after at least 3 full year’s premiums have been paid , GSV will be 30% of the premiums paid excluding premium for the 1st year and all other extra premium and/or additional premium for accident benefit/ term rider.

SPECIAL SURRENDER VALUE:

SSV = (paid up value + bonus) x sv factor.

LOAN:

Loan as per regular terms and conditions is available under Marriage Endowment policy. After granting loan under the policy if life assured expired before date of maturity, the loan interest will be calculated upto date of maturity and not upto date of death.

BONUS:

Bonus at endowment rates will be Compute on the sum assured.

Finally Marriage Endowment/Educational Annuity plan purpose is to arrange for child’s marriage or higher education.This Marriage endowment plan helps parents to fulfill their objective of child’s marriage/higher education even if they are not alive.

Main Feature: Lowest premium among plans for children.

Benefit Illustration

Example: Mrs.Rajesh has a 2 years old daughter pooja. he opts for marriage endowment plan for Rs. 2 lac for 20 years, so that his daughter can be married around 22 years of age. But after 8 years his death occurs. His nominee needs not to be worried about the premium of this plan. When his daughter pooja attains the age of 22 years, she will get Rs.3,80,000/- (basic S.A. Rs.2lac + bonus as per bonus rate of 2005 i.e. Rs.45/- per annum for 20 years which come out be to Rs.1,80,000/-). This policy can be gifted to someone you love.