LIC’s Jeevan Shiromani Plan
Life Insurance Corporations Jeevan Shiromani Plan is traditional, non-market linked, limited premium payment money back life insurance plan that offers financial protection & savings to the policyholders. The plan focuses to provide future financial security to the family in the event of unfortunate demise of the life assured i.e. policyholder during the tenure of the policy. Periodic payments are paid to the policyholder in event of survival of the policyholder. Following is an in-depth analysis of the LICs Jeevan Shiromani Plan.
What are the key highlights of the LIC Jeevan Shiromani Plan?
Following are the key highlights of the LICs Jeevan Shiromani Plan :
- This plan is money-back insurance plan that focuses on savings and insurance coverage
- It is a limited premium payment plan
- This plan acquires the paid-up status after completion of ONE policy year
- The plan offers an inbuilt critical illness benefit that covers for 15 critical illnesses
- The plan offers 4 rider benefit i.e. the policyholder has a choice to choose maximum 3 out of 4 riders to increase their insurance coverage
- For the ease of premium payment the plan offers 5 types of premium payment mode namely Yearly, Half-Yearly, Quarterly, Monthly and Salary Deduction
What are the benefits available under the Jeevan Shiromani Plan?
Following are the benefits payable under the Jeevan Shiromani policy provided the policy is in-force and that all the due premiums are paid till date.
- Maturity Benefit
Maturity benefit is payable on survival of the life assured through the entire Policy Term.
Maturity Benefit = Sum Assured on Maturity + Guaranteed Additions + Loyalty Additions, if any
The policyholder’s of Jeevan Shiromani Plan are eligible to get Guaranteed Additions and the Loyalty Additions along with maturity payouts depending upon the policy tenure.
The Sum Assured on Maturity is defined as :
- 40% of the Basic Sum Assured for 14 years of policy tenure
- 30% of the Basic Sum Assured for 16 years of policy tenure
- 20% of the Basic Sum Assured for 18 years of policy tenure
- 10% of the Basic Sum Assured for 20 years of policy tenure
- The rest of the benefit is paid as survival benefit during the policy tenure as per the pre-defined schedule.
- Settlement Option : Maturity Benefits in Installments
Taking the maturity benefit in instalment is also called as the Settlement Option under the LICs Jeevan Shiromani Plan. The policyholder has an option to take the Maturity Benefits in instalments and for that tenure an interest is earned by the policyholder.
Under this option :
- The maturity benefits are payable over 5, 10 or 15 years after the maturity of the plan
- In a yearly, half-yearly, quarterly or monthly mode, as selected by the policyholder provided the minimum amount requirement is met
- For availing this option the policyholders are eligible to receive interest as per the rate decided by LIC
- If the net claim amount is less than the minimum amount requirement, then the Settlement Option cannot be availed
- Minimum Requirement Amount is defined as :
- Rs 5,000 for a monthly mode
- Rs 15,000 for a quarterly mode
- Rs 25,000 for a semi-annual mode and
- Rs 50,000 for a yearly mode
- Death Benefit : the death benefit payable under the Jeevan Shiromani plan is as under :
- If the death of the life assured occurs during the first 5 policy years then the nominee is receives :
- Sum Assured on death + Guaranteed Addition
- If the death of the life assured occurs after completion of first 5 policy years but before the maturity of the Jeevan Shiromani policy then the nominee receives :
- Sum assured on death + Guaranteed Addition + Loyalty Addition, if any.
- Sum assured on death is highest of :
- 10X annualized premium, or
- Sum Assured on Maturity, or
- 125% of Basic Sum Assured i.e. Absolute sum assured payable on death
- Kindly note, the death benefit under the Jeevan Shiromani Plan will not be lower than 105% of the premiums paid till the date of death.
- If the death of the life assured occurs during the first 5 policy years then the nominee is receives :
- Survival Benefit
As the Jeevan Shiromani policy is a money-back insurance plan the life assured is eligible to receive a substantial amount of survival benefit at regular intervals. This survival benefit is paid to the life assured at every stage of survival during the tenure of the policy. The survival benefit is a definite percentage of basic sum assured opted under the policy.
The payment of survival benefit at regular interval as under :
|Policy Tenure||% of Sum Assured paid as Survival Benefit||Survival Benefit years||Maturity Benefit = % of Basic Assured + Guaranteed Additions + Loyalty Additions||Total Benefit = Survival Benefit + Maturity Benefit (As % of Basic Sum Assured + Guaranteed Additions + Loyalty Additions|
|14 years Policy||30%||10th & 12th Policy Year||40%||100%|
|16 years Policy||35%||12th & 14th Policy Year||30%||100%|
|18 years Policy||40%||14th & 16th Policy Year||20%||100%|
|20 years Policy||45%||16th & 18th Policy Year||10%||100%|
- Inbuilt cover for critical illnesses
The LICs Jeevan Shiromani Plan offers coverage for critical illnesses. This cover for critical illnesses upon diagnosis of 15 listed critical illnesses. The inbuilt cover is offered for in force policies i.e. payment of all the due premiums is done under the policy.
Following are the various benefits available under the inbuilt cover :
- Lump sum Benefit
The Jeevan Shiromani policy has an Inbuilt Critical Illness Benefit is offered on admissible claim equivalent to 10% of the basic sum assured.
- Deferred Payment
Once the claim of critical illness is registered with LIC the policyholder has a choice to defer with due and unpaid premiums. The policyholder can opt deferred premium payment option for 2 years starting from the date of registering critical illness claim. This deferred payment is also applicable for rider premiums. LIC shall not charge any interest during the period of deferred premium. Upon completion of 2 years the subsequent policy premiums are to be paid on their due dates.
- Second Medical Opinion
This is a facility offered to the LICs Jeevan Shiromani policyholders. LIC upon such request shall arrange for the second medical opinion with their empanelled doctors and healthcare providers. The second medical opinion facility is offered only one time during the policy tenure under the LIC Jeevan Shiromani Plan. No additional cost is to be paid by the policyholder for availing this facility.
- Following is the of Critical Illnesses covered under the LICs Jeevan Shiromani Plan :
- Open Chest Surgery
- Myocardial Infarction
- Kidney Failure
- Organ Transplant or Bone Marrow Transplant where the life assured is the recipient of the organ / bone marrow
- Paralysis causing total and irreversible loss of limbs
- Multiple Sclerosis
- Aortic Surgery
- Primary Idiopathic Pulmonary Hypertension
- Alzheimer’s or Dementia Disease
- 3rd Degree Burns
- Open Heart Replacement
- Benign Brain Tumor
- Waiting Period
An incubation time called as waiting period of 90 days is applicable under this plan. The waiting period will be calculated from either the date of commencement of risk or date of revival of the risk cover, whichever is later. The critical illness benefit shall terminate if the symptom of critical illness is observed before the end of waiting period. However, the clause of waiting period shall not apply on contingencies arising due to accident.
- Survival Period
A 30 days survival period is applicable under the critical illness benefit. This survival period commences from the date of diagnosis of the critical illness. If the life assured dies during the survival period, corporation shall not pay inbuilt critical illness benefit.
Following are the certain exclusions under the inbuilt critical illness benefit. The policyholder shall not be eligible to receive any payment of inbuilt critical illness benefit if the critical illness is the direct or indirect cause of any of the following :
- Any critical illness causing death of the life assured within the survival period
- Any sickness arising within 90 days from the date of commencement of risk or date of revival of risk, whichever is later.
- Suicide or self-inflicted injury, irrespective of the mental state of the policyholder
- Alcohol abuse or drugs
- Act of war, riot, civil war etc
- Pre-existing medical conditions
- AIDS / HIV
- Radioactive contamination caused by the nuclear accident.
- Lump sum Benefit
- Guaranteed Additions
The policyholders of LIC Jeevan Shiromani Plan are eligible to receive Guaranteed Additions as
- During the first 5 policy years : Guaranteed Additions are paid as Rs. 50 per Rs. 1,000 of the Basic Sum Assured
- After the first 5 policy years : Guaranteed Additions are paid as Rs. 55 per Rs. 1,000 of the Basic Sum Assured
- Surrendering a policy or paid-up plan
In the case of surrendering a plan or a paid-up plan, the Guaranteed Addition would be calculated on a proportionate basis as per the last premium received.
- Loyalty Additions
The policyholder’s of LICs Jeevan Shiromani Plan are eligible to receive the Loyalty Additions :
- After the completion of first 5 policy years, both for Death as well as Maturity Claim.
- The amount of loyalty addition is not fixed as it is declared by LIC at regular intervals.
- For Paid-up plans or for surrendering a policy, the Loyalty Additions would be calculated for the tenure the policy was inforce.
- Loyalty Additions would also be calculated for Special Surrender Value, provided the policy has been inforce for the first 5 policy years
The LICs Jeevan Shiromani Plan offers additional coverage by way of riders. The corporation offers the following riders under this plan :
- LICs Accidental Death and Disability Benefit Rider
- LICs Accident Benefit Rider
- LICs New Term Assurance Rider
- LICs New Critical Illness Benefit Rider
What are the basic eligibility parameters of Jeevan Shiromani Plan?
The basic eligibility parameters to avail the LICs Jeevan Shiromani Plan are as under :
- Basic Sum Assured =
- Minimum = Rs. 100,00,000
- Maximum = No limit
(Kindly note, that the Basic Sum Assured can be availed in multiples of Rs. 500,000)
- Policy Tenure =
- 14 Years
- 16 Years
- 18 Years and
- 20 Years
- Premium Paying Term : (Policy tenure MINUS 4 years)
- Entry Age
- Minimum = 18 years (completed)
- Maximum =
- For policy term of 14 years= 55 years
- For policy term of 16 years 51 years
- For policy term of 18 years 48 years
- For policy term of 20 years 45 years
- Maturity Age
- Maximum =
- For policy term of 14 years 69 years
- For policy term of 16 years 67 years
- For policy term of 18 years 66 years
- For policy term of 20 years 65 years
- Maximum =
What are the premium rates of LIC Jeevan Shiromani Plan?
The premium rates of the LIC Jeevan Shiromani Plan are as under :
|Age||For 14 Years of Policy Term and 10 Years of Premium Paying Term||For 16 Years of Policy Term and 12 Years of Premium Paying Term||For 18 Years of Policy Term and 14 Years of Premium Paying Term||For 20 Years of Policy Term and 16 Years of Premium Paying Term|
Let us understand with an example of how the tabular premium rate chart can be used to derive the premium amount of the LIC Jeevan Shiromani Plan.
- Mr X= Age 40
- Basic Sum Assured = Rs 3,00,000
- Policy Tenure = 16 years
- Premium Paying Tenure = 12 years
- Premium factor : 95.10
Annual Premium :
= 95.10/1000 * Rs 3,00,000
= Rs 28,530 + Tax
(Since premium rates are of Rs 1000 per basic sum assured)
What are various modes of Premium Payment available under the plan?
The premium of Jeevan Shiromani can be paid in various modes namely Yearly, Half-Yearly, Quarterly, Monthly or by salary deduction. For premium payment is expected to be paid on due date however LIC has offered grace period facility where a certain period after the due date is given to the policyholder to pay the due premium. For yearly, half- yearly, quarterly mode of premium payment a grace period of 30 days is given while for the monthly mode of premium payment a grace period of 15 days is offered by LIC.
What are the rebates and discounts offered under the LIC Jeevan Shiromani Plan?
Following are the rebates and discounts offered under the Jeevan Shiromani Plan :
|Particulars of rebate on premium payment mode|
|For yearly mode of premium payment||2% rebate on tabular premium|
|For half-yearly mode of premium payment||1% rebate on tabular premium|
|For Quarterly and salary deduction i.e. monthly mode of premium payment||NIL Rebate|
|Particulars of rebate on High Sum Assured|
|Sum assured Rs 1,00,00,000 to Rs 1,95,00,000||NIL|
|Sum assured Rs 2,00,00,000 to Rs 4,95,00,000||0.030% of basic sum assured|
|Sum assured Rs 5,00,00,000 and above||0.050% of basic sum assured|
What are the exclusions under the Jeevan Shiromani Policy?
The Jeevan Shiromani Policy stands void in case of death due to Suicide. Death due to suicide is not covered under the LICs Jeevan Shiromani Policy. The LIC shall not entertain any claim registered due to death by suicide :
- If the death of the life assured happens anytime within the first year of the date of commencement of risk then LIC shall only entertain a claim of 80% of the premiums payment subject to the policy is in full force.
- If the death of the life assured happens anytime within the first year from the date of revival of the policy then LIC shall pay either 80% of the premiums paid up to the date of death due to suicide or surrender value of the policy on the date of death, whichever is higher.
- Kindly note the above clauses are not applicable for Jeevan Shiromani policies who have not acquired paid-up value. If any Jeevan Shiromani policy has not acquired paid-up value then LIC shall not entertain any claim and no amount is payable under such scenario.
How to purchase the LIC Jeevan Shiromani Policy?
LICs Jeevan Shiromani Plan can be purchased via the web portal (online channel) or through authorized agents, brokers, LIC office etc (offline channel). The process of purchasing the LIC Shiromani plan is simple and quick. Submit all the related required documents along with proposal form and premium amount. Upon receipt of such documents LIC shall process the request and policy shall be issued in policyholder’s name.
How to surrender the LIC Jeevan Shiromani Plan?
- Surrendering the LIC Jeevan Shiromani Plan can be done provided that premiums of one full year is paid.
- On surrendering the LIC Jeevan Shiromani Plan, the surrender value is the higher of either Guaranteed Surrender Value or Special Surrender value shall be paid to the policyholder.
- The Guaranteed Surrender Value payable during the tenure of the policy will be=
- Total premiums paid till the date of surrender X
- Guaranteed Surrender Value factor MINUS
- Any survival benefit due or payable.
- The Guaranteed Surrender Factor is represented as a % determined by the policy term and the year of surrendering the policy.
Surrendering of LIC Jeevan Shiromani Plan is quick and simple. The policyholder’s of Jeevan Shiromani Plan can at any time during the tenure of the policy choose to surrender the policy provided the Jeevan Shiromani policy has completed one policy year and a premium of one entire year is duly paid.
Process of surrender
In order to surrender the LICs Jeevan Shiromani policy the policyholder needs to visit the nearest office or branch of LIC and submit the original policy document along with completely filled discharge form. On receipt of such request LIC shall credit the surrender value in the bank account.
Yes, the policyholders of LICs Jeevan Shiromani Plan can avail policy loan on their in force policy after the policy has acquired surrender value. The maximum loan limit receivable based on surrender value is as under :
- Up to 90% of surrender value for in-force policies
- Up to 80% of surrender value for paid-up policies
LICs Jeevan Shiromani Plan offers 5 modes of premium payment namely Yearly, Half-Yearly, Quarterly, Monthly and Salary Deduction.
Yes, any policyholder who is not happy with the terms and conditions of the Jeevan Shiromani Policy can cancel the policy within the free-look period. For cancellation of the policy in the free-look period the policyholders have to return the policy to LIC stating the actual reason of cancelation. On receiving such request the corporation after deducting certain charges shall credit the amount in the bank account.
LICs Jeevan Shiromani offers 4 riders under this plan namely LICs Accidental Death and Disability Benefit Rider, LICs Accident Benefit Rider, LICs New Term Assurance Rider and LICs New Critical Illness Benefit Rider.
- For Maturity Claim, the policyholder of LIC Jeevan Shiromani Plan has to submit the duly filled discharge form along with all the original policy documents to the nearest branch of LIC along with a cancelled cheque.
On receiving the maturity claim, LIC would process the same at their earliest and credit the bank account of the policyholder exactly on the maturity due date.
- For a Death Claim, the nominee needs to submit all relevant documents like :
- Death Certificate of the life insured
- KYC documents of the nominee
- Original Policy Documents
- Duly filled Claim form
- Bank account details of the nominee for an NEFT