Contents
LIC New Janaraksha Policy Review
LIC New Janaraksha Plan-91 is a simple endowment policy with Profit and bonus facility.
PLAN 87- JANARAKSHA INTRODUCED ON – 8/12/2008 WITHDRAWN ON- 1/11/89
NEW JANARAKSHA-91 INTRODUCED ON – 01/07/1985 WITHDRAWN ON
LIC New Janaraksha Policy is mainly designed for the needs of the rural population who are faced with fluctuating agriculture income due to flood, drought etc. which results in non-payment of premiums in time. This plan is similar to endowment assurance plan but having free death cover available for 3 years.
LIC New Janaraksha policy Conditions
Age at entry: Minimum 18 yrs completed
Maximum 50 yrs NBD ,under plan 87- age was 40 yrs
Policy term(Under plan-91) : Minimum 12
Maximum 30 yrs
Policy term (Under plan-87): Term will be 10,12,15 yrs
Maturity age : Maximum 70 yrs
Mode of payment:
Plan 91: All mode of payments are allowed under plan 91.
Plan 87: Under plan 87, only yearly and Half-yearly mode was allowed.
Under plan-91:
Sum Assured: Minimum 20,000 30000 wef 5/8/2003
50000 WEF 10/9/2009
Maximum 5,00,000
7,50,000
10,00,000 w.e.f.6/10/2004
Under plan 87:
Sum Assured: Minimum was 1,000
Maximum 15,000
The limits under NMG/NMS/medical were revised as:
| As perco/act/1767/4 dt.8/12/2001 | As per co/act/1973dt 6/10/2004 | ||
| Non medical general (NMG-All major males and literate females) | 50,000 | 1 lakh | |
| Non medical special (NMS-Govt,Quasi govt,Local bodies,Schools,Colleges Hospitals run by Govt ) | 1,00,000 | 2 lakh | |
| Medical | 7,50,000 | 10 lakh |
- Female lives , except housewives and illiterate females, plan can be allowed to all
lives falling under category I,II,III. For female cat III(literate) with independent income
(earned or unearned) sum assured of Rs. 50000 or 5 times of annual income whichever is
less is allowed.
- Physically handicapped with one limb affected will be eligible under this plan
without extra for group A and with extra of Rs. 2.00 for group B.
LIC New Janaraksha Policy Rebates
1.Mode Rebate: Yearly- 3%
Half-yearly- 1.5%
2.Sum Assured Rebate:25,000 to 49,999 – Rs. 1.00
50000 & above Rs. 2.00
From 1/11/2003 as –
Up to 50,000 nil
50,001 to 1 lakh Rs. 1.00
1,00,001 & above Rs.2.00
LIC New Janaraksha Policy Maturity Benefits
Maturity Claim:If policy is in full force as on date of maturity by paying all premiums, than full sum assured + vested (Additional) bonus is payable as maturity claim.
If policy is in paid up condition or date of maturity falls under 36 months where temporary cover granted, then paid up value + vested(Additional) bonus is payable.
- Death cover for full sum assured does not granted for maturity claim.
LIC New Janaraksha Policy Death Benefits
Death Claim:If policy is in full force or treated as full force as per special provision (under plan-87 In the event of non-payment of premiums within the days of grace after the payment of premiums for at least for the first 2 years, the policy will be kept in force for the full sum assured for a period of 3 years from the date of FUP)of extended claim cover for 3 years, Full sum assured along with vested(Additional) bonus is payable. If death has occurred under extended cover of 3 years,outstanding premiums FROM FUP(Full unpaid Premium) to policy anniversary following date of death will not be recovered and no bonus will be paid for this period of extended death cover. Under paid up policy i.e if death occurs after 36 months from date of FUP then ,
paid up value only + vested bonus (if any) is payable.
Riders Available
Double Accident Benefit:In New Janaraksha Under plan 87, Double accident benefit was not available, but permanent disability benefit is available.
- Under plan 91, DAB and EPDB cover is available .The amount of sum assured under this plan 91, will be counted to decide maximum limit of 5 lakh/ 10 lakh/ 25 lakh/ 50 lakh as the case may be.The DAB/ EPDB cover is available during the period of free death cover of 3 years.
- Hence DAB claim will be acceptable if cause of death is accident.
- Policies issued under plan 91 automatically get covered of DAB without paying any extra
premium.
Paid up value :
= sum assured x actual no of years premiums paid/ No of year’s premiums payable
Guaranteed Surrender Value:
After paying at least 3 full year’s premiums, GSV will be equal to 30% of the total amount
of actual premium paid excluding the premium for the first year and all extra premiums.
Special surrender value :
Special surrender value = ( paid up value + bonus) x SV factor
Additional Information
Loan:
Loan will be granted as per our regular terms and conditions within surrender value.
Rate of interest will be decided from time to time.
Bonus:
Bonus will be calculate on the sum assured at rates applicable to endowment assurance.
Features:
The main feature of New janaraksha policy is:
- That after paying at least 2 full years premiums, full death cover (accident benefit cover under plan 91 is also) is available for a period of 3 years from the first unpaid premiums due.
- . During this 3 years i.e 36 months,policyholder can revive the policy without any evidence of health by paying all premiums with interest or part premiums with interest.
- Even if the policyholder is not able to pay premiums after paying first 2 years premiums, then the life risk cover continues for 3 more years from unpaid premium.
- New Janaraksha plan is an endowment plan with guaranteed returns.
Benefit Illustration
Calculation of vested bonus under New Janaraksha plan- 91 where death claim is considered under special provision of extended claim cover :- As per special provisions of extended claim cover under plan 91, If premiums have been paid for at least2 full years and any further premium has not been paid within days of grace and policy results into death claim within the period of 3 years from first unpaid premium, then full sum assured as death claim is payable. If death occurs after paying at least 3 years premiums, then bonus will be allotted with reference to the number of years for which the premiums have been actually paid. If the number of years premiums paid is in proportion of months then some doubts were raised about payment of bonus for suchproportionate months. It is now clarified that bonus for such proportionate months is payable if policy is in force as on the date of valuation. In short, policy will be treated as paid up for calculation of bonus during extended cover period. This is explained by way of following examples :-
| Example 1 | Example 2 | |
| Date of commencement | 1/10/1990 | 1/1/1990 |
| Plan and term | 91-30 | 91-30 |
| Sum assured | 1,00,000 | 1,00,000 |
| Mode | Qly | Qly |
| FUP | 1/2009 | 7/2009 |
| Date of death | 1/5/2010 | 1/5/2010 |
| Vested bonus payable Reason |
1183.00 x 100 =118300Under this policy, premiums have been paid for 18 years and 3 months. Since policy is not in force as on 3/2009’s valuation, vested bonus is payable as per 3/2008’s valuation. See bonus chart for 3/2008’s valuation. |
1275.00 x 100 =127500.Under this policy,
premiums have been paid for 19 years and 6 months. Since policy is in force as on 3/2009’s valuation, vested bonus is payable as per 3/2009’s valuation. However, number of premiums has not been paid for 20 years but only for 19 years and 6 months. Hence proportionate bonus for 6 months will be deducted. Bonus amount will be 1299.00 – 24.00 = 1275.00 for 1000 sum assured. |
SOME EXAMPLES ON BONUS CALCULATIONS IN CASE OF DEATH CLAIMS DURING FREE DEATH COVER PERIOD
EXAMPLE NO-1:-
Doc- 1/10/2000 , PLAN AND TERM- 91/20 , SUM ASSURED- 1,00,000, MODE- QLY,
FUP- 1/1/2005 , date of death- 11/8/2006
Answer:- no of years premiums paid ( 1/2005 – 10/2000) = 4 years 3 months
Since policy was not on the books of the corporation as on 31/3/2005’s valuation, in
view of FUP- 1/2005, bonus rate as per 31/3/2004’s valuation is applicable.
Vested bonus for 3/2004’s valuation will be Rs. 245.00( 4 yrs) . hence total vested bonus
will be (245.00 x 100) = 24500.
Under this case, bonus for 3 months premiums paid is not payable. 3 months premiums
paid are for next policy anniversary i.e from 10/2004 to 10/2005. But policy was not in
force as on 31/3/2005. Hence, taking date of death into consideration, bonus for 3
months at interim rate is not payable.
EXAMPLE NO-2:
Doc- 1/1/2001, PLAN AND TERM- 91/20 , SUM ASSURED- 1,00,000, MODE- QLY,
FUP- 1/4/2006 , date of death- 11/8/2006
ANSWER:-
No of year’s premiums paid are ( 4/2006 – 1/2001) = 5 years 3 months.
In this case, though FUP is 4/2006, valuation of 3/2006 is not applicable, since date of
death is 11/8/2006 and 3/2006’s valuation is applicable from 1/1/2007.
Hence, valuation of 31/3/2005’s rates is applicable. Vested bonus will be Rs. 296.00 per 1000 sum assured for 5 yrs. Since policy was in force
as on 31/3/2006, and 3 months premiums have been paid for next policy anniversary i.e
from 1/2006 to 1/2007, bonus is payable for this 3 months. Since death has taken place
on 11/8/2006, bonus for 3 months is calculated at interim bonus rate of 31/3/2005’s
valuation.
Interim bonus rate for plan 91 and 20 years term as per 3/2005’s valuation is Rs. 40/-. For
3 month’s it will = 40/4 quarter= Rs.10/-
Total bonus = 296 + 10= 306.00 x 100 = 30,600.
Example-3:
Under plan.91 Mr. Rajeev took the New Janaraksha the plan conditions are
Age at entry: 35 years
Sum Assured: Rs.1,00,000/-
Premium Paying term: 25 years
Mode of premium payment: Yearly
Annual Premium: Rs. 4,246 /-
| End of year | Total premiums paid till end of year | Benefit payable on death / maturity at the end of year | ||||
| Guaranteed * | Variable | Total | ||||
| Scenario 1 | Scenario 2 | Scenario 1 | Scenario 2 | |||
| 1 | 4,246 | 100000 | 2100 | 5500 | 102100 | 105500 |
| 2 | 8,492 | 100000 | 4200 | 11000 | 104200 | 111000 |
| 3 | 12,738 | 100000 | 6300 | 16500 | 106300 | 116500 |
| 4 | 16,984 | 100000 | 8400 | 22000 | 108400 | 122000 |
| 5 | 21,230 | 100000 | 10500 | 27500 | 110500 | 127500 |
| 6 | 25,476 | 100000 | 12600 | 33000 | 112600 | 133000 |
| 7 | 29,722 | 100000 | 14700 | 38500 | 114700 | 138500 |
| 8 | 33,968 | 100000 | 16800 | 44000 | 116800 | 144000 |
| 9 | 38,214 | 100000 | 18900 | 49500 | 118900 | 149000 |
| 10 | 42,460 | 100000 | 21000 | 55000 | 121000 | 155000 |
| 15 | 63,690 | 100000 | 31500 | 82500 | 131000 | 182000 |
| 20 | 84,920 | 100000 | 56000 | 146000 | 156000 | 246000 |
| 25 | 1,06,150 | 100000 | 69500 | 182000 | 169500 | 282000 |