LIC’s new term plans 2014-Anmol Jeevan-II and Amulya Jeevan-II

Today  LIC launched new versions of it’s existing Term Insurance policies. Let see how they are beneficial to you and what changes are done to the prior plans. From initial findings it looks that they are cheaper. But I need to validate with the data which may take some time.

LIC's New Term Plans-2014

1) Anmol Jeevan-II

  • Minimum Sum Assured raised from Rs.5,00,000 to Rs.6,00,000.
  • Maximum Sum Assured Rs.24,00,000.
  • Minimum Age at entry is 18 years and maximum age is 55 years.
  • Maximum cover ceasing age is 65 years.
  • Minimum Policy Term- 5 Years and Maximum Policy Term-25 years.
  • Premium paying term-Yearly and Half Yearly only.
  • Revival-A lapsed policy can be revived within 2 years from the first unpaid premium but before the expiry of policy term. Medical report cost should be borne by Life Assured.
  • Death Benefit-Policy Sum Assured will be payable to nominee.
  • Maturity Benefit-Nothing will be payable on survival of life assured till the end of policy term.
  • If the death of Life Assured occurs within the grace period but before the payment of premium due then, policy will still be considered as valid and benefit will be payable to nominee (but after deducting the due premium+unpaid premiums due before the next policy anniversary).
  • 2% of tabular annual premium will be add for half yearly premium.
  • Agents Commission-
  1. For term of 5-9 years-1st Year 10%, 2nd and 3rd Years-5% and subsequent years-5%.
  2. For term of 10 to 14 years-1st Year 15%, 2nd and 3rd Years-7.5% and subsequent years-5%.
  3. For term of 15 years and above-1st Year 25%, 2nd and 3rd Years-7.5% and subsequent years-5%

Bonus commission will be 40% of 1st year commission.

  • No loan, paid up value or surrender value.
  • Policy will be considered as void if life assured commits suicide within 12 months from the date of commencement of risk or from the date of revival. An amount equal to 80% of premiums paid till date of death (excluding taxes and extra premiums) will be payable if policy is in force.

2) Amulya Jeevan-II

  • Minimum Sum Assured Rs.25,00,000.
  • Maximum Sum Assured-No limit.
  • Minimum Age at entry-18 years and maximum age 60 years.
  • Maximum maturity age-70 Years.
  • Minimum policy term-5 years and maximum term-35 years.
  • Premium paying term-Yearly and Half Yearly only.
  • Revival-A lapsed policy can be revived within 2 years from the first unpaid premium but before the expiry of policy term. Medical report cost should be borne by Life Assured.
  • Death Benefit-Policy Sum Assured will be payable to nominee.
  • Maturity Benefit-Nothing will be payable on survival of life assured till the end of policy term.
  • If the death of Life Assured occurs within the grace period but before the payment of premium due then, policy will still be considered as valid and benefit will be payable to nominee (but after deducting the due premium+unpaid premiums due before the next policy anniversary).
  • 2% of tabular annual premium will be add for half yearly premium.
  • Agents Commission-
  1. For term of 5-9 years-1st Year 10%, 2nd and 3rd Years-5% and subsequent years-5%.
  2. For term of 10 to 14 years-1st Year 20%, 2nd and 3rd Years-7.5% and subsequent years-5%.
  3. For term of 15 years and above-1st Year 25%, 2nd and 3rd Years-7.5% and subsequent years-5%

Bonus commission will be 40% of 1st year commission.

  • No loan, paid up value or surrender value.
  • Policy will be considered as void if life assured commits suicide within 12 months from the date of commencement of risk or from the date of revival. An amount equal to 80% of premiums paid till date of death (excluding taxes and extra premiums) will be payable if policy is in force.

Normal Requirements for claim-Claim form as prescribed by LIC with original policy bond, NEFT mandate form to directly transfer the amount to nominee bank, proof of title, proof of death, medical treatment prior to death and if age is not submitted during the time of policy buying then age of life assured should be furnished.

Whether to buy LIC’s term plans or not?

Major drawback why lot of people stayed away from LIC term plans are their pricing. They are costly when you compare with online or offline term plans available with other insurers in India. But few still tried to buy term plans with LIC because of their faith in it and to diversify their risk among insurers. Currently I don’t have valid table to compare. But when I considered the available resources I found that these new plans are cheaper than the older (this is my assumption and will update on it shortly).

For example for the aged 30 years and SA Rs.1,00,00,000 and term 25 years was previously cost us Rs.29,200 yearly. But now it is costing us Rs.22,028 (claiming to be inclusive of tax).

Image courtesy of [Stuart Miles] / FreeDigitalPhotos.net

 

 

Share & Comment

Comments

  1. Animesh Shah says

    Hi Basavaraj,
    Thanks for this great Blog…

    I request your advice on the following need:

    I am a Male, 36 Yrs Non Smoker. I want to opt for the following:

    1. Term Insurance cover of Rs. 1.5 Crore for myself
    2. Critical Illness Cover for myself and my wife (35 Yrs) for a sum of 15 Lakh each

    I am quite impressed with the Max New York Online plan with a fixed SA + Monthly Payout for 10 Years. However, I really want the claims process and settlement to be hasslefree for my wife in case of my demise so I trust LIC even if they are expensive.

    My question is:
    1. Should I distribute my risk between LIC and Max? If yes, what ratio do you suggest?
    2. Are there any specific considerations while opting for more than one Insurer? Do I have to follow any particular sequence or special disclosures?
    3. Since a critical illness rider is not available with either LIC or Max, which one do you recommend?

    Thanks again for the great blog and your honest and practical advice …

    Ani..

    • says

      Animesh Singh-
      1) If LIC premium seems costlier then you can diversify it as you said. Otherwise I don’t think any reason behind such a logic.
      2) When you opt for multiple insurer then you must disclose all the existing insurance policies to new insurer correctly. This will actually make them clear about the existing cover, your human life value and how much SA they can maximum offer you.
      3) My suggestion is to separately buy it from General Insurance Companies rather than mixing it with Life Insurance.

  2. Kunal says

    Hi,

    Can someone of age 62 yrs buy a term plan for say around 10 years for 20-30lakhs or even above? If yes how much would the premium be for HDFC/ICICI.

    If no, may I know what would be the maximum age to buy a term insurance and from which company?

    • says

      Kunal-He can buy but depends on how much healthy he is and which company offers term insurance to this age. Sadly HDFC Click2Protect maximum age at entry is 55 years and for ICICI it is 60 years. Maximum maturity age in both the plans is 65 years.

  3. Atul Suresh Daware says

    R/sir

    I am 34 Year Old. I have taken Amulya Jeevan 1 on 23/11/2013. Comparing to Amulya Jeevan 2 which is better for me. If Amulya jeevan 2 is better then what can i convert Amulya jeevan 1 into 2. Please give me suggesstion.
    Thanking u.

    • says

      Atul-It is cheaper than old LIC’s term plan. Hence first calculate new premium for yourself with new term plan and if it is cheaper for your age then go ahead. But do remember that once the new policy issued then only cancel the old one.

  4. Sivaramakrishna says

    Dear sir I am 24 years old i didn’t drunk & smoke – can tell me Short time (10 years) Term Policy I can Invest My self Max-20000

  5. ATUL BAKSHI says

    Hi
    My DOB is July’81 and recently i’ve applied for a Term plan of LIC Amulaya Jevan II. They have offered me 1cr life cover for 20 yrs @ 22500/yearly premium. After that they told me to go for a medical test and post medical test they told me since my body weight is more and my Blood Pressure is also high so they can offer me only 60lacs cover for 15 years at the same premium.

    Pls suggest whether i should go for it or look for anyother options like HDFC, ICICI etc. Pls help in this regard.

  6. reji says

    Hi Basvaraj ,

    Thanks for so much details.Just wanted to know :

    If I buy a term plan at age of 33 yrs for 20 yr term .Will policy lapse on my 53rd B’day or it will continue 20 yrs from the date I purchased the policy even if it is after 53 rd b’day.

    And appreciate if you cld suggest which is better from SBI or MAX term plans

    • says

      Reji-If you buy at 33 years of age then opt for 20 years term plan, then it will close once 20 year completes. So it start from the policy bought date than your birthday. If you are looking for cheaper then go for Max.

  7. Mayur says

    Mr. Basavaraj, I am 29 year old, Smoker(from last 8-9) years.
    I want 30 year Term plan with 01 CR SA. (Interested in LIC & HDFC)
    what would be the annual premium for this? There is any difference in premium cause of smoking?

    6-7 months before I had surrender LIC Jeevan saral. Am I eligible to take new LIC term plan?

    • says

      Mayur-In LIC you need to disclose your smoking habit while filling the form and based on your health condition they take the call. But in all other private insurers they let you to disclose in the initial state itself and set the premium accordingly. So for LIC there is no difference between premium rates while you approach but they may increase the premium while accepting the proposal itself. But I am providing you the general healthy person’s premium for age of 29 years, SA Rs.1 Cr and term of plan 30 years will be Rs.24,382 per year. Also you are very much eligible to buy term plan even though you surrendered Jeevan Saral.

  8. amit saxena says

    Hi,

    I went on Policy Bazaar, where the representative advised me to take Aviva (50 L) and Aegon Relegare (50 L).
    Can you comment on the above policies, and let me know if i need to inquire anything before doing any payment.

  9. vinesh topiwala says

    hi,,,my d.o.b is 02-12-1971……43 age runing,,,i want term plan for 1.5 crore from lic…what will be primium?

  10. Rajiv Panda says

    HI Basu,

    Can you let me know about the below things:
    1.I have a question related to national Pension system. I have gone through the entire offer document. The term is quite long time . I am now 30 yrs old. Shall I go for this plan.
    2.I want a insurance plan which is a life coverage plan and premium will be as minimum a possible.
    3.As per me if other investments return (eg: RD:9%,FD-9%,SBI Sweep Account))9% return, Why should i go for any life coverage plan @ maximum premium.

    Suggest me a good insurance plan that covers life at minimum premium amount.

    Thanks,
    Rajiv

    • says

      Rajiv-1) I don’t think NPS is a great product for accumulating your retirement corpus. You can create yourself with bit of knowledge and investing in a well diversified products. Also there is lock in facility and we can’t say how Govt will act in future.
      2) You can go for pure term insurance plans. But choosing the lowest premium product may harm your dependents (when you will not be there). So choose the product based on other features also. Hence in my view you can go with LIC (offline and costliest), HDFC or ICICI. Choice is your’s.
      3) You are right. Even if you opt for Bank FDs (interest earned is taxable), you earn more than the typical traditional products.

  11. VINAY GARG says

    Dear sir,

    I purchased two wealth plus policy on 31/3/2010 of Rs.50,000/-. As on date NAV of the same is Rs.10.8752. But’s the future of the same should I keep it or in cash the same.

    • says

      Vinay-Better to come out and invest the same according to your goal. I know it may be currently give you negative to flat return (because of expenses involved in ULIPs). But better to come out once for all.

  12. Abhishek Jagga says

    Hi Sir,

    I am 30 year old and planning to buy Term Plan where in the only thing I am concerned about the Claim process in case of death.

    Most of these company’s have different clause, is their any trust-able name who pay without considering the nature of Death.

    • says

      Abhishek-Please bear in mind that none of the insurance company are here in India to do any social work. Hence while claim (especially early claim) they will try to find the exact cause of death. If you are declaring all materiel facts rightly then why you are worrying about nature of death (as including me, no one can predict our nature of death right? :)??

      • Abhishek says

        Thanks

        Right I agree

        actually I been through a heart surgery @ the age of 25 but now I am fit and regularly go for medical check up. The only reason I ask above question is because of this.

  13. Purushottam says

    Dear Basavaraj Tonagatti

    My DOB is 24-08-1977. I and my family dependent on my salary, which is around 4 lac/annum.

    I am looking for pure insurance term plan, which can give financial support to family, if somthing happen.

    It is requested to you pl. suggest in some best term plan of various company which suite me as I said about my income.

  14. T K Singh says

    I have RPLI Endowment Assurance ( GRAMA SANTOSH) and paying premium at post-office regularly for last four years, but bonus rate of this policy is Rs.55 per one thousand. So my question should I surrender this policy and search for another or I should continue. Please advice. Thank you

    • says

      T K Singh-I am not an expert in postal life insurance. So unable to comment on your query at this time. But in my general observations, PLI is still good compare to LIC’s traditional plans as it’s premium is very cheap and bonus is high.

  15. demo says

    Basu Sir,

    I have Amulay Jeevan (old plan before 2014). With new Amulya Jeevan-II, what happens to my plan and premium?

  16. Diwanshu Agrawal says

    Dear Sir,
    I am 36 year old and planning to purchase 1 Cr Term Plan. I have some queries,

    1) Is there any difference in the Policy conditions for on-line / off-line term plans offered by the same Insurance company .

    2) Is there any hidden exclusion in online policies, which makes them cheaper?? E.g. SBI life is quoting Rs. 28969 for 29 year term Off-line policy, while it is quoting Rs. 20383 for the same term On-line policy.

    3) Is there anything special in the terms & conditions of LIC (Lesser exclusions), which makes it costly.

    4) If all insurance companies are governed by IRDA rules and judge every case with honesty, then why there there is vast difference in claim settlement ratio of different companies?

    • says

      Diwanshu-
      1) There is no such major differences between online and offline plans.
      2) Online plans are cheaper as the middlemen cost (agents cost) is directly passing to you by the way of reduced premium. There is no other hidden exclusion apart from this major cost.
      3) LIC plans are costlier because premium calculation of any product in insurance industry depends on lot of things like mortality table they are using, underwriting procedure and lot of issues, which common purchaser unable to understand. Hence the difference of pricing among insurers. Also new company may offer you cheaper to built it’s business (may or may not).
      4) Claim settlement ratio again depends on company reputation and why each insurance was got rejected. There are many reasons to reject like non disclosure of materiel facts by buyer, exclusions of few conditions in particular plan or intentional rejection by insurance company. Hence we can’t blame that rejection is only the fault of insurance company.

  17. RAVIRAJ TRIVEDI says

    Hi Mr. Basu, Thanks For All Your Informative Articles
    I (Age 28) just bought SBI-eShield For 30 Years SA 30,00,000/= 10 % increasing every 5 Years Premium 6000/= But I Am little bit Confused about some Quotations.
    I am Self employed Professional with Annual Income is Net 2,64,000/= (Gross 3,50,000/=) I want to bye 1 more term plan (Not Satisfy with SBI-Because their is not a single word about natural Calamities Or Terrorist Act.)

    1) Can i buy one more policy from any other Insurance Co.? Calculation of 15% Of Annual Income, is 15% of Net Income Or Gross Income ?

    2) Does LIC Amulya Jeevan-2 Or LIC Anmol Jeevan-2 OR ANY OTHER INSURANCE CO. Offering Term Plans give SA on Normal Death Or in Accidental Death Only ?

    3) Which Insurance Companies Term Insurance Covers Terrorist Attack OR Bomb Blast (Compulsory Now Days For Metro City Residents) & Other Natural Calamities like Tsunami, Earthquake or Flood ?

    4) Is Their Any Spacial Rider Available in Any Term Insurance ?

    • says

      Ravivaraj-1) Calculating your insurance coverage changes on insurance company to insurance. Some may give you 15 times of your net income and some flexible new entrant may offer 20 times. So it is again based on other conditions like your age, health condition, Sum Assured you opted and term of plan. Hence I can’t predict on that.
      2) Both the policies covers only death benefit whether it is accidental or normal which is equal to SA you opted.
      3) You will find such plans available in market. But I am not aware of policy which offering all such incidents.
      4) Yes, you can opt for riders like accidental, critical illness from other insurers, but not in LIC’s term plans.

      • RAVIRAJ TRIVEDI says

        Ohhh..
        After doing long-long (4 Days) search and compare all the Term Insurance Plan
        I think ICICI is providing good term insurance plan Premium is second highest but affordable.
        They Paying whatever is Sum Assured in death due to any manner either TERRORIST ATTACK OR
        NATURAL CALAMITIES and also giving in writing (No other is doing that).
        So Any one who is going for term plan please check and compare with ICICI once.
        Or if You Already have one term insurance OR want to split in to Two (as said by Mr.Basu)
        go with ICICI.
        I have SBI-eShield but thank GOD, I will use my free-look period and cancel it.

        • sandeep says

          One of LIC agent was saying, if death occurs on bank holiday ICICI won’t allow to claim. Also death in any activity like Bungee jumping,trekking, amuzment rides etc is not qualified.
          Is this true?

          • says

            Sandeep-One of the worst advice I hear till day. There is no such thing that your death must occur on ICICI’s working day. So no need to worry. But few insurers exclude claims if death occurs due to risk activities like what you mentioned. Hence before proceeding to buy, disclose the details and be secure.

  18. Juhi says

    Hi,
    I am new to insurance policies.
    I had invested in anand jeevan table 129 last year to which my friend suggest to stop it as there is no benefit and i also researched on the same proved as right.
    The new scheme under term growth plan of LIC as amulya jeevan plan 2 seems attractive as the returns are high.
    i am confused to its maturity plans as it says no benefit shall be payable to the survival on end of policy term.
    what does this means
    As i have gone thru your artcle u stated 90450 of premium for 20 yrs plan under the scheme for sum assured Rs 1 Crore which means the person gonna pay Rs 1809000 in total & will get Rs. 1 Crore after 20 Years (ie wen he is of 70 yrs)
    I want to know the sum assured here is fixed or is dependent on market growth on any condition bcoz the returns are around 15% wen compounded annually & the ROR increases as the LIC annexure as we decrease the age of insurer.
    Please help to solve the confusion.

    • says

      Juhi-The above said plans are called “Pure Term Insurance Plans’. In these plans suppose your age is 30 years and you opt for term of 30 years for Sum Assured of Rs.1,00,00,000 then you will pay the premium regularly till you reach 60 years. If your death occurs during this 30 yrs period then your nominee will receive the SA i.e Rs.1,00,00,000. If nothing happens during this 30 years period then you will not receive anything from LIC.
      But such type plans are must for each individual who have financial dependents. Ideal Sum Assured will be around 15 times of your yearly income. Hence buy such plans. Then based on your financial goals start investing in other products like FDs, RDs,PPF or MFs. Hope I resolved your doubt.

  19. CP says

    For me, the problem with LIC’s plans is they do NOT allow riders like Critical Illness, Disability, Accidental etc. Do you think it is a good idea or even possible to take LIC’s endowment plan (some low value plan) with term ride r+ CI + disability etc?

    • says

      CP-When are buying term insurance then your sole goal is buying life risk. In that case the add on facilities such as critical illness, disability or accidental riders will not matter a lost. Because you can buy them separately too. Buying the traditional plans only because LIC not provides such additional facilities is not a prudent decision. My suggestion will be to separate the insurance with investment. Also the riders you are talking about are cheaply available separately in market.

  20. Teja says

    Surely it’s a good plan. However, their website doesn’t allow to calculate the premium for these plans. The only option available in the drop down is ‘pension/annuity’ plans. Anyone able to select anything else in the drop down?

  21. KALIMUTHU.K says

    Dear sir

    I am act as agent from LIC OF INDIA in Dindigul Branch , Tamilnadu. If you arrange to give leads to me on yearly subscription basis. Kindly inform at the earliest.

    regards
    KALIMUTHU.K
    Agent: LIC OF INDIA
    42 WEST RAMANATHAPURAM, DINDIGUL 624 001
    MOB: 9994458868 & 9842760356

  22. shyam says

    Thanks for informing us about these plan in simple language.

    For 50 years male, what would be the annual/yearly premium for SA of Rs. 1 crore under Amulya Jeevan II plan?

    • says

      Shyam-Pleasure. As of now I have one source of data from a Development Officer. But I need to validate that with LIC site. So Once I get that then I will reply to you with the premium rate you are asking for. Hope you wait for a day or two.

        • says

          Shyam-It is Rs.90,450 per year for 20 years term plan (inclusive of tax) and Rs.65,731 (inclusive of tax) for 10 years term plan. But previously it used to cost you Rs.1,09,000 and Rs.75,300 respectively.

          • shyam says

            Many thanks BT for finding out premium rates.

            Do you find 20 years plan attractive for people in my age group?

            Given the current scenario, do you think that LIC rates under this plan are competitive?

            If detailed comparisons with other companies may be a time consuming process, your preliminary assessment/gut feeling would be adequate for me.

            • says

              Shyam-I think maximum you can opt for term insurance will be upto 65 Years. Reason behind my suggestion is, your earning period ends at this age and no one will be financially dependent on you. Hence if unluckily something happens to you then there will be no financial loss to your dependents. But it depends on case to case. Hence you need to decide the term.
              LIC premium seems competitive when you compare with other offline term plans (It is my understanding but need to do some research and hope you will get one more post on the same). But when you compare with online plans then still this plan is bit costly. Considering LIC’s claim settlement ratio and other features either you may go 100% with LIC or diversify your risk among your insurers including LIC.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>