LIC’s Aadhar Shila Plan

LIC’s Aadhar Shila Plan

Life insurance Corporation of India is one of the pioneer institutions that provide top-notch insurance products to cater to all the insurance needs of people. Since inception LIC has been one of the insurance company who has offered a wide range of insurance products spanning across gender, age and product type. LIC is one of the most sought insurance companies as it offers best endowment plans and the company to its credit have basket-full of top-notch endowment plan and one such plan is LIC’s Aadhar Shila. The LIC’s Aadhar Shila plan is an exclusive insurance product for females holding a valid Aadhar Card issued by the government of India. Let us understand LIC’s Aadhar Shila plan in detail.

What are the Key features of Aadhar Shila plan?

The LIC Aadhar Shila policy is non-linked participatory endowment plan that is designed to boost savings and offer financial protection in event of any eventuality. The plan focuses on providing financial stability to the family in the event of unfortunate demise of the life assured during the policy term or pay the maturity benefit in a lump sum upon the survival of the policyholder on the date of policy maturity. Following the exclusive features of the LIC’s Aadhar Shila Plan :

• This is an exclusive women-only plan
• It is a low premium plan
• The Aadhar Shila Plan is an endowment plan so the policyholder shall receive a lump sum maturity benefit at the end of the policy term
• Loyalty addition is given under this plan at the time of maturity or in event of death after FIVE years
• Loan Facility is available under the plan
• The plan offers the auto-cover facility
• Critical illness rider is not available under this plan
• The revival of lapsed policy is possible under this plan

What are the benefits of the Aadhar Shila Plan?

Availing LIC’s Aadhar Shila Plan is advantageous as it offers the following benefits to the policyholder :

• Death Benefit
  The main motive of buying a life insurance policy is to safeguard the financial needs of the family in case of any eventuality. The LIC’s Aadhar Shila plan offers substantial death benefit to the nominee in the case of death of the policyholder.
  • If the death of the policyholder happens in the first FIVE years of the policy then the nominee is eligible to receive a death benefit equal to the sum assured is given. In this case, the death claim amount shall be equivalent to 110% of the basic sum assured availed under the policy.
  • While if the death of the policyholder happens after completing initial FIVE years but before the maturity of the LIC Aadhar Shila policy then in such cases, the nominee is eligible to receive the basic sum assured + loyalty addition.

  Kindly note that the loyalty addition benefit is only payable after completing 5 policy years so in this case, the death claim amount that the nominee is eligible to receive is equivalent to 110% of basic sum assured plus loyalty addition.

• Maturity Benefit
  The lump sum benefit that the policyholder receives at the end of the policy term is called as the maturity benefit. The maturity benefit is paid to the policyholder upon their survival till the end of the insurance contract.
  • Once the maturity benefit is paid the insurance contract is terminated.
  • Under the LIC’s Aadhar Shila Plan, the maturity benefit that the policyholder is eligible to receive is equivalent to basic sum assured availed under this plan + Loyalty Additions.

  Kindly note that this maturity sum assured is payable provided the policyholder has paid all the premiums throughout the term of the life insurance policy.
  

• Rider Facility
  Rider is an essential accessory that is used to avail additional coverage in order to utilize the maximum benefits offered by the plan. The LIC Aadhar Shila plan also offers rider benefit in order to offer maximum coverage to the policyholder.
  • Under this plan the policyholder can opt an Accident Benefit Rider to extend the coverage limits.
  • However, kindly note that this rider facility cannot be availed by minors.
  • If any policyholder wishes to avail accident benefit rider facility they can easily avail it by paying additional premiums in order to enjoy the maximum insurance coverage.
  • The accident benefit rider facility can be availed by policyholders at any given time during the policy term provided the LIC Aadhar Shila plan is in full force and is not a lapsed policy.
• Loyalty Additions
  LIC believes in sharing the profits of the company with its customers by way of paying various bonuses. The LIC Aadhar Shila policy is a profit participatory plan so the profit sharing is done by paying ‘Loyalty additions’ to policyholders at the time of exit from the plan.

  Under LIC Aadhaar Shila plan the policyholders are eligible to receive any such loyalty additions once the policy has completed 5 policy years and provided that policy premium is paid up to date. This loyalty addition is paid on policies that are in full force (i.e. there are no unpaid premiums) and the payment is made either along with maturity benefit payment or paid with the death benefit after the first 5 years.

What are the eligibility criteria for availing LIC Aadhar Shila Policy?

There are certain eligibility criteria that every customer has to fit into avail the LIC Aadhar Shila Policy. The eligibility criteria for availing the LIC Aadhar Shila Policy are as under :

Thus above is the eligibility conditions that the customer needs to fulfill in order to purchase the Life Insurance Corporation’s Aadhar Shila non-market linked endowment plan.

Are there any additional key benefits offered under LIC Aadhar Shila Plan?

The plan has more to offer other than the above-stated benefits. The LIC’s Aadhar Shila endowment plan provides additional key benefits as under :

• Low Premium : The LIC offers the Aadhar Shila plan at low premium rates. The premium rates of the LIC’s Aadhar Shila Plan are as under:
  

  Age of the Policy Holder	Term of the policy
  	10 years	15 years	20 years
  10 years	89.10	53.55	36.35
  20 years	89.40	53.90	36.70
  30 years	89.60	54.20	37.15
  40 years	90.55	55.55	38.95
  50 years	93.85	59.60	43.70

  The above premium rates are exclusive of service tax. The above given annualized premium rates are for per Rs 1,000 of basic sum assured.

  Example
  Let us understand with an example of how the tabular premium rate chart can be used to derive the premium amount of the LIC Limited Premium Endowment Plan.

  • Mr X = Age 40
  • Basic Sum Assured = Rs 3,00,000
  • Policy Tenure = 15 years
  • Premium factor : 55.55

  Annual Premium :
  = 55.55/1000 * Rs 3,00,000
  = Rs 16,665 + Tax
  (Since premium rates are of Rs 1000 per basic sum assured)

• Risk Cover
  Under the LIC’s Aadhar Shila plan the risk cover is offered immediately from the date of inception of the policy. The risk coverage commences from the date the policy has come into force and this coverage is extended to adult as well as minor lives.
• Loan on Policy
  Loan facility can be availed under LIC’s Aadhar Shila policy so if you are in dire need of money. Policy loan can be availed by the policyholder during the tenure of the policy subject to certain terms and conditions formulated by LIC.
  • The rate of interest for a policy loan would be determined by the LIC from time to time. However, for an estimate, the rate of interest for FY 2016-17 was 10% p.a., which was payable on an half-yearly mode.
  • The maximum loan tenure can be till the end of the policy tenure.
  • The maximum loan amount that can be availed under the LIC’s Aadhar Shila policy is based on a certain percentage of the surrender value acquired by the policy as under :
    • Up to 90% policy loan can be availed on policies that are in full force
    • Up to 80% policy loan can be availed on paid-up policies

  Kindly note if there is any outstanding loan then LIC has rights to recover the unpaid loan amount along with interest if any at the time of payment of claim proceeds.

• Revival of Policy
  In case the Aadhar Shila policy is lapsed due to not payment of premium then LIC offers the facility of a revival of the lapsed policy.
  • The revival of the lapsed policy can be done within 2 years starting from the first unpaid premium but not later than the maturity date.
  • The revival amount shall consist of the total amount of unpaid premium plus interest if any.
  • The interest is charged at a rate that is determined by LIC at the time of the revival of the policy.
  • Along with the unpaid premium amount and interest the policyholder also needs to submit satisfactory proof of continued insurability.
  • In case the policyholder wishes to revive the rider, he needs to revive the base sum assured first and then reinstate the rider. The rider alone cannot be revived without the base policy inforce.
• Paid Up value of the policy
  If at least initial 3 years premiums are duly paid and later premiums are not paid then such policy are known as paid-up policies. However, if policyholder pays less than 3 years premium all the benefits offered under the LIC’s Aadhar Shila Policy will cease to exist after the end of a grace period and the policyholder shall not be eligible for any payment.
• Surrender of Policy
  Under the LIC’s Aadhar Shila Plan the policyholder can exercise the right to surrender the policy provided the policy premiums are paid for consecutive 3 years. The surrender value of the policy shall be determined by multiplying the guaranteed surrender value factor with total premiums paid till date. The percentage of guaranteed surrender value factor is dependent on policy term and year of the surrender of the policy. Following is a sample illustration of guaranteed surrender value factor of LIC Aadhar Shila Plan:

  Policy year of surrender	Policy term 10 years	Policy term 15 years	Policy term 20 years
  5	50.00%	50.00%	50.00%
  8	65.00%	54.29%	52.50%
  10	80.00%	62.86%	57.50%
  15	NA	80.00%	70.00%

• Rebates and Discounts rates
  The LIC’s Aadhar Shila policy offers attractive discounts and rebates on premium payment modes and high sum assured. The policy provides dual benefits like low premium and rebates on premium rates. The rebates and discounts offered under the LIC’s Aadhar Shila Plan are as under:

  Premium Payment Mode Rebates and Discounts

  For Yearly mode of premium payment	Rebate of 2% on tabular premium
  For Half-Yearly mode of Premium payment	Rebate of 1% on tabular Premium
  For Quarterly mode of Premium Payment	NIL
  For Monthly mode of Premium Payment through NACH	NIL
  For Premium Payment through salary deduction	NIL

  Rebates and Discounts on High Basic Sum Assured

  Basic Sum Assured availed by Policyholder	Rebate offered
  Rs 75,000 to Rs 1,90,000	NIL
  Rs 2,00,000 to Rs 2,90,000	1.50% rebate on basic sum assured
  More than Rs 2,90,000 to Rs 3,00,000	2% rebate on basic sum assured

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