The most trusted insurance company has on a recent basis come up with a cheaper term insurance plan that is indeed more flexible with a wider set of features:
Jeevan Amar LIC’s new term plan: Features and eligibility
It is a non-profit and non-linked plan i.e. not linked to market and the sum assured will be payable to the nominee only when the life assured meets untimely and unfortunate death during the policy term, provided the policy is in force.
Entry age: 18 years and the maximum entry age- 65 years
Maximum cover ceasing age: 80 years
Minimum policy term: 10 years
Maximum policy term: 40 years
Sum assured rules: Policy holder has the option to choose from either level SA or increasing SA option:
In the level SA option, the sum assured will remain the same until policy term while in the case of increasing SA, the SA/ death benefit will remain same for the first 5 years and then will increase by 10% of the basic sum assured value each year for the next 15 years or policy term end (whichever is earlier) and thereafter will remain same for the rest of the policy term. Notably, the increased SA cannot be more than double the BSA.
Basic sum assured value allowed: Individuals can go for Rs. 25 lakh as the minimum BSA value and there is no maximum limit. Further, BSA may be chosen in multiple of Rs 1 lakh up to Rs 40 lakh of life cover and thereafter in multiple of Rs 10 lakh.
Also, maximum cover limit will depend on a person's age and income level.
Premium payment option:
Single, regular and Limited Premium payment option will be available for paying premiums under the policy. In case of limited premium option, there are two options:-
i) 5 years less than the policy term
ii) 10 years less than the Policy Term. However, the maximum premium ceasing age will be 70 years.
Choice in receiving death payout: At the time of policy proposal or during the policy term, the policyholder can choose to receive the death benefit either as a lump sum value or in parts as say some amount in lump sum and some in installments over a period of 5, 10 or 15 years.
Surrender value: The surrender value option will be available in case of single premium as well as limited premium payment mode option only that too subject to some terms and conditions.
Premium amount will vary depending on the life proposed's gender as well as smoker or non-smoker category. And in the non-smoker category, male category will have to shell out a higher premium charge.
Minimum premium in case of regular and limited premium payment mode shall be Rs. 3000 while in case of single premium it will be Rs. 30,000.
Should you buy it?
The plan extends life coverage until 80 years of age. And for the female category of life assured, the premium rates will be relatively lower. Increasing SA option is yet another plus point that comes with the plan. So, if some of these features entice you, you can surely go with the plan provided you still do not have any other plan in your financial portfolio.