LIC Whole Life Policy Plan no – 1 and 2 Review

LIC whole life Policy Review

Plan no 1 and 2

Introduction on Lic whole life Policy

LIC Whole life policy plan no 1 and 2 are actually started in the year 1986 by Lic Of India and policy got withdrawn in the year 2002.

In LIC Whole life policy, premiums are payable for minimum of 35 years from the date of commencement of policy or till attaining an age of 80 yrs . Whatever is more comfortable to the policyholder.  Whole life policy is one of the cheapest policy.

LIC whole life policy basically provides Sum assured + bonuses on the death of the policyholder to nominee.

The maturity amount are payable after attaining  age of 80 years to the policyholder or for a term of 35 years whichever is later. Whole life policy in LIC is an asset for the upcoming generation of the policy holder.

                  LIC Whole life policy Conditions

Sum Assured : Minimum – 10,000 /-

                        Maximum – no limit

Entry age : Minimum  –  18 yrs

                  Maximum – 60 yrs

Premium paying term     : 35 years or attaining the age of  80 years

premium payment mode : Yearly, Half Yearly, Quarterly, Monthly( SSS or ECS)

Plan is allowed under non-medical and medical basis.

All female categories are allowed.

Standard and non-standard age proofs are acceptable.

No restriction on sub-standard lives.

Lic Whole life Policy Rebates

Rebates are divided into 2 types

1. sum assured rebate and
2. mode rebate (premium payment mode)

Premium payment mode Rebate: Yearly 3% of tabular premium

                        Half-yearly 1.5% of tabular premium

                        Quarterly Nil

                        Monthly Nil                                                        

Sum Assured rebate for regular premium policies :  

Rs 50,000	Nil
Rs 50,001 to 1 lakh	1.00 Rs
Rs 1,00,000 & Above	2.00 Rs

LIC Whole Life Policy Maturity  Benefits

This LIC whole life insurance plan  does not have a maturity date.  However, have the option to take the Sum Assured +  all bonuses declared under the policy anytime after 40 years from the date of commencement of the policy or on attaining  80 years of age.

Speaking Frankly there will be no maturity claim under whole life policies. Hence, LIC settles full sum assured along with the bonus to life assured as maturity claim on achieving 80 years of age as provided, if death claim has not occurred earlier.

Finally With effect from year 2002  when whole life policy will become ready for maturity claim on fulfilling all conditions, Policyholder have a option to take maturity claim  till his death. Payment will be treated as maturity claim.

Conclusion:  Finally it has been decided that Policy will be matured anytime after 40 years from the date of commencement or attaining 80 years of age. On attaining the age of 80 years policy settles maturity claim that is (  Full sum assured + bonus + FAB(Final Additional Bonus)  – Outstanding premiums up to policy year of death)

LIC whole life Policy Death Benefits

LIC Whole life insurance plan provides insurance coverage for  lifelong and it replaces financial loss to the family occurred due to the death of policyholder.

Death claim before date of maturity : full sum assured + bonus – (Outstanding premiums up to policy year of death + one time increase in basic sum assured)

Death claim after date of maturity: full sum assured + bonus + one time increase in basic sum assured – Outstanding premiums up to policy year of death

LIC Whole life policy Surrender Value

Policy can be surrendered after paying premiums for at least of 3 full years. In case of regular premium paying policies, if policy is surrendered after completion of 3 years Guaranteed surrender value will be 30% of the total premium amount paid minus premium paid for first year.If policy was surrendered before 3 years then policyholder receives nothing. Guaranteed surrender value depends on no.of years premium paid.

PAID UP VALUE :

          =  sum assured  x  No of years premiums paid / No of years premiums payable (PPT)

Riders Available in LIC whole life policy

Basically there are two types of riders: 1.Accident benefit Rider  2.Term assurance rider

1. Accident benefit Rider: Available for this plan
2. Term assurance rider:  Not Available.

Bonus on LIC Whole life plan

Simple Bonuses are declared per thousand of Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. FAB (Final Additional Bonus) is one of the other benefit which is applicable only at the time of maturity.

For Example: Lic Declares Simple Bonus   Rs 70 per 1000 Rs./-  Sum Assured per annum.

LIC whole life Policy Benefit illustration

Example:

If Naveen chooses a LIC whole Life policy and his age at entry of policy is 30 years for a sum assured of Rs 1,00,000/-. Premium paying term is 45 yrs and mode of premium payment is Annually.

His Annual Premium is Rs 2917/-

year	paid till end of year	Guaranteed	VariableScenario 1	Variable Scenario 2	TotalScenario1	totalScenario 2
1	2917	100000	3900	10800	103900	110800
2	5834	100000	7800	21600	107800	121600
3	8751	100000	11700	32400	111700	132400
4	11668	100000	15600	43200	115600	143200
5	14585	100000	19500	54000	119500	154000
6	17502	100000	23400	64800	123400	164800
7	20419	100000	27300	75600	127300	175600
8	23336	100000	31200	86400	131200	186400
9	26253	100000	35100	97200	135100	197200
10	29170	100000	39000	108000	139000	208000
15	43755	100000	58500	162000	158500	262000
20	58340	100000	104000	288000	204000	388000
25	72925	100000	130000	360000	230000	460000
30	87510	100000	156000	432000	256000	532000
35	102095	100000	182000	504000	282000	604000
40	116680	100000	208000	576000	308000	676000
45	131265	100000	234000	648000	334000	748000

TABULAR ANNUAL PREMIUM PAYABLE UNDER PLAN 1- WHOLE LIFE WITHOUT PROFIT PER 1000 SUM ASSURED FOR DIFFERENT DATES OF COMMENCEMENT OF POLICY.

AGE ATENTRY NBD	UOTO31/3/1980	FROM1/4/1980 TO 31/8/1986	FROM1/9/1986 TO 30/4/1998	NOTIONAL PREMIUM RATESFROM 1/5/1998 TREATED AS P’ FOR ONE TIME INCREASE IN SUM ASSURED **
15		12.4	10.75	10.1
16		12.6	10.9	10.2
17		12.85	11.05	10.3
18	14.5	13.1	11.2	10.45
19	14.87	13.35	11.4	10.6
20	15.31	13.6	11.6	10.75
21	15.69	13.9	11.8	10.9
22	16.12	14.25	12.05	11.05
23	16.56	14.55	12.35	11.25
24	17.06	14.9	12.6	11.45
25	17.56	15.3	12.95	11.65
26	18.06	15.7	13.3	11.9
27	18.62	16.15	13.65	12.15
28	19.25	16.65	14.05	12.4
29	19.94	17.15	14.5	12.75
30	20.62	17.65	14.95	13.1
31	21.37	18.25	15.5	13.45
32	22.12	18.85	16	13.85
33	22.94	19.5	16.6	14.25
34	23.81	20.2	17.25	14.75
35	24.69	20.9	17.95	15.25
36	25.62	21.7	18.65	15.8
37	26.62	22.5	19.45	16.35
38	27.69	23.4	20.3	17
39	28.87	24.35	21.25	17.65
40	30.12	25.3	22.25	18.4
41	31.44	26.4	23.2	19.15
42	32.81	27.5	24.45	20
43	34.25	28.7	25.65	20.9
44	35.75	29.95	26.95	21.9
45	37.37	31.3	28.35	22.95
46	38.56	32.65	29.8	24
47	40.37	34.1	31.35	25.2
48	42.31	35.65	33	26.45
49	44.37	37.3	34.75	27.75
50	46.62	39.05	36.6	29.2
51	49	40.9	38.6	30.7
52	51.5	42.9	40.75	32.35
53	54.12	45	43.05	34.1
54	56.87	47.25	45.45	36
55	59.81	49.65	48.05	38.05
56	62.94	52.25	50.8	40.3
57	66.25	54.95	53.75	42.75
58	69.75	57.85	56.9	45.4
59	73.44	60.95	60.25	48.3
60	77.31	64.25	63.8	51.45

 ** P’=corresponding NOTIONAL Tabular premium as per the revision of premiums w.e.f. 1/5/1998 for original premium paying term & age at entry, irrespective of date of commencement of policy.(co/act/1703/4 dt. 9/12/1999)

TABULAR ANNUAL PREMIUM PAYABLE UNDER PLAN 2 – WHOLE LIFE WITH PROFIT PER 1000 SUM ASSURED FOR DIFFERENT DATES OF COMMENCEMENT OF POLICY.

AGE ATENTRY NBD	UOTO31/3/1980	FROM1/4/1980 TO
15		17.95
16		18.35
17		18.8
18	19.25	19.2
19	19.69	19.65
20	20.19	20.15
21	20.69	20.65
22	21.25	21.15
23	21.81	21.75
24	22.37	22.3
25	23	22.9
26	23.62	23.55
27	24.31	24.25
28	25	24.95
29	25.75	25.7
30	26.5	26.5
31	27.31	27.35
32	28.19	28.2
33	29.06	29.1
34	30	30.05
35	31	31.1
36	32.06	32.15
37	33.19	33.25
38	34.37	34.45
39	35.62	35.7
40	36.94	37
41	38.31	38.35
42	39.75	39.8
43	41.25	41.3
44	42.87	42.9
45	44.56	44.6
46	46.31	46.3
47	48.19	48.05
48	50.19	49.9
49	52.37	51.85
50	54.69	53.95
51	57.12	56.15
52	59.69	58.5
53	62.44	60.95
54	65.31	63.6
55	68.31	66.35
56	71.5	69.3
57	74.87	72.4
58	78.44	75.7
59	82.19	79.15
60	86.19	82.85