LIC’s Amulya Jeevan II Plan

For most of us, a term insurance plan is the best insurance plan. The biggest advantage is that they are simple to understand. It can be quite complicated for a layperson to get into details like risk cover, market fluctuations etc. Other than that, it is much easier to compare two term plans as the primary basis is their price. As most pure life plans have a similar structure, it is the cheapest form of insurance.

With so many benefits of a term plan, buying one seems a sensible choice. And when it comes to buying insurance, the first name that comes to mind is LIC. LIC’s Amulya Jeevan II provides financial support to the family in case of death of the insured individual. Under this protection plan, there is a pre-decided value or the sum assured that is paid to the nominee if the insured dies during the term of the policy.

Eligibility Conditions for LIC’s Amulya Jeevan II Plan

Eligibility Conditions Minimum Maximum
Sum Assured INR 25 lakh No Limit
Entry Age 18 years 60 years
Cover Ceasing age - 70 years
Policy Term 5 years 35 years

Important Features of LIC’s Amulya Jeevan II Plan

  • Death Benefit
    LIC’s Amulya Jeevan II is pure insurance plan.
    If the life insured dies within the policy tenure, the death benefit is paid to the nominee and the policy terminates, provided all due premiums are paid and the policy is inforce.
    Death Benefit = Sum Assured
  • Maturity Benefit
    Since LIC Amulya Jeevan II Plan is a pure term plan, there is NO maturity benefit that is paid to the policyholder if the life insured lives till the end of the policy tenure.
    Thus, there is NO Maturity Benefit in this plan.

Affordably Priced Policy
Even by paying a nominal amount of premium the policyholder can ensure that in case of his untimely death his loved ones will receive a high sum assured that would help them sustain a good standard of living, even in the absence of the breadwinner.

Non-Participant
LIC’s Amulya Jeevan II is a non-participating plan, it does not have a share in the profits that are made by LIC.

Tax Benefits
The premiums paid towards LIC’s Amulya Jeevan II are tax-exempted under Section 80C til INR 1.5 lakhs every year. The death benefit that is claimed is also liable to tax exemption under Section 10 (10D) of the Income Tax Act, 1961.

Premium Payment
The frequency of premium payment of the policy has to be chosen by the policyholder. It can be annually or bi-annually. There is a grace period of 30 days to pay the amount, failure in doing so will lead to a policy lapse.

Surrender Value
There is no provision of surrender or surrender in LIC’s Amulya Jeevan II as this is a pure term plan and there is no scope of investment. Thus, the policy does not acquire any paid-up value and hence there is no surrender value and a possibility of any loan in a pure term plan.

No Riders
There are no add-on Riders that can be attached to this plan.

Taxes
Taxes, such as service tax or any other taxes, are levied on the premium and the extra premium amount, in accordance with the prevailing rates of interest. While calculating the benefits under the plan these taxes are not included.

Requirements for Purchasing the Policy

The applicant must present the following documents when purchasing LIC’s Amulya Jeevan II


  • Aadhaar Card
  • Passport, if applicable
  • Voter’s ID card
  • Birth Certificate or Metric Certificate
  • Income/Salary Statement
  • Bank account Details
  • Medical Report, if asked
  • Passport Sized photographs

The revival of a Lapsed Policy
If a policyholder does not pay his premiums on time and then misses the payment even in the grace period, the policy will lapse. For the revival of the policy, the policyholder has to start making the payment again but within 2 years of the date from the first time that the premium was missed.
LIC might ask for a medical check-up before accepting a lapsed policy for revival. The cost of the medical tests, reports, etc., if required for the process of policy revival, needs to be borne by the policyholder and LIC would not reimburse the same. There will be another round of underwriting at the time of policy revival and LIC reserves the right to accept the policy at standard cost, revise the premium according to the present condition or change the terms and conditions of the plan, as per their internal underwriting guidelines.

What are Non-Forfeiture of the Policy
When all due premiums are not paid on time, LIC has some clauses to protect the interest of the policyholders so that all their premiums paid cannot be forfeited. These are called Non-Forfeiture Clauses!

Medical Test
For purchasing and for Renewal of the of policy, a medical certificate may be asked for by LIC, depending on the medical grid. It is extremely important that the correct details about the medical history and current lifestyle are provided at the time of buying the policy.

Hiding certain facts, especially about drinking or smoking habits can adversely affect your policy benefits by either:

  • Claim being repudiated, or
  • Policy becoming null and void

For misrepresentation or non-disclosure of a material fact

In case of Suicide by the Policyholder
LIC’s Amulya Jeevan II would be invalid if the insured individual, whether sane or insane, commits suicide If the individual has committed suicide within a year of commencement of risk or from the date of revival LIC will not present any claim other than 80% of the amount paid through premiums till the time of death, if the policy is in force.

Requirements for Making a Claim
To make a death claim the nominee who is the claimant should first lodge the claim. He then has to submit

  • Claim forms of LIC, dully filled in
  • Original Policy Papers of Jeevan Amulya II Plan
  • NEFT Mandate
  • Proof of Title
  • Proof of Detail
  • Medical Treatment prior to death

Nomination
According to Section 39 of the insurance act, 1938, the nomination has to be done by the policyholder. In case there has been a change in nomination, a notice must be submitted at the servicing registration office of LIC. It is the responsibility after policyholder to check the validity and to the legal effect of the nomination.

Cooling-off Period
When is someone invests in an insurance policy, LIC gives him a 15-day cooling-off period. In case the policyholder is not pleased with the terms and conditions of the policy, he may return the policy to LIC. It should be remembered that the return is made within 15 days of receipt of the policy. For this, he needs to make a request, where he has to state the reason for the objection. Once he submits his request LIC will cancel the policy and pay back the amount that has been paid, after deducting the necessary charges.

How LIC’s Amulya Jeevan II Works?

Let us study the plan with the help of an example.

Sample Premium

Annualised premium rates per Rs. 1000 Sum Assured
Term of the Policy (years)
Age 5 years policy 10 years policy 15 years policy 20 years policy 25 years policy
20 years 1.15/INR 1000 sum assured 1.15/INR 1000 sum assured 1.15/INR 1000 sum assured 1.15/INR 1000 sum assured 1.17/INR 1000 sum assured
30 years 1.28/INR 1000 sum assured 1.29/INR 1000 sum assured 1.42/INR 1000 sum assured 1.64/INR 1000 sum assured 1.96/INR 1000 sum assured
40 years 2.03/INR 1000 sum assured 2.41/INR 1000 sum assured 2.97/INR 1000 sum assured 3.57/INR 1000 sum assured 4.23/INR 1000 sum assured
50 years 4.85/INR 1000 sum assured 5.85/INR 1000 sum assured 6.89/INR 1000 sum assured 8.05/INR 1000 sum assured -

How to calculate premium

Age 30 years
Specific Male, Non-smoker
Policy tenure 20 years
Premium factor 1.64
Sum Assured INR 50,00,000
Premium = 1.64/1000*50,00,000 = INR 8,200
Actual Annual Premium INR 8200 + Tax

Additional Premium
This policy charges an additional premium of 2% the tabular premium for the half-yearly mode of premium payment.

Pre-Purchase/Policy Renewal Medical Test

Whether an individual needs to go for a pre-policy health check-up or not depends on his age, his health and the other details provided by him. LIC then submits all the details collected to the underwriter to check the same according to their internal guidelines of the medical grid. If the sum assured or age is high, then he needs to undergo a pre-policy health checkup under all circumstances. Thus, it is extremely important to disclose all relevant and irrelevant details about one’s current lifestyle to the insurance company for a complete underwriting and risk assessment.

Hiding facts about your drinking or smoking habits can adversely affect the policy benefits in circumstances like

  • The claim can be repudiated
  • Premium might go up
  • The policy might become null and void

For non-disclosure or misrepresentation of material fact.

What is a material fact?

Any information that might be relevant to take an underwriting decision is considered to be a material fact.

Since the minimum sum assured for LIC Amulya Jeevan II Plan is INR 25 lakhs, in most cases than not, a pre-policy health checkup would be mandatory.

Some profiles of people might or might not need a health checkup, depending on his lifestyle, profession, etc. and the same can be ascertained by the medical grid published by LIC.

Medical underwriting is an important part of the policy issuance and pre-policy health checkup is a part of medical underwriting, and the same is done at the time of policy issuance as well as revival.

It should be remembered, that if for the purchase of a new policy revival of the policy a medical examination is required, the entire cost of the medical procedures is to be borne by the policyholder alone and the same would not be reimbursed by LIC.


FAQ’s

LIC’s Amulya Jeevan II provides financial support to the family in case of death of the insured individual. Under this protection plan, there is a pre-decided value or the sum assured that is paid to the nominee if the insured dies during the term of the policy. Even by paying a nominal amount of premium the policyholder can ensure that in case of his untimely death his loved ones will receive a high sum assured that would help them sustain their standard of living, even in the absence of the breadwinner.


Due to non-payment of the premium amount even in the grace period provided, the policy will lapse. However, the policyholder can revive it within a time limit of two years from the first unpaid premium date. But, it must be done before the maturity date.


No, there is no such provision in the LIC’s Amulya Jeevan II since it is a pure term plan and there is no element of savings in this plan. Since the policy does not acquire a paid-up value, there is no surrender value attached to this plan as well.


No, the death benefit is completely tax-free under Section 10(10D) of the Income Tax Act, 1961 in the hands of the nominee.


There are no income criteria that is mentioned for LIC Amulya Jeevan II Plan. However, it totally depends on the discretion of the underwriter to approve the sum assured coverage that the policyholder applies for.


No, there is no provision of an upgrade of sum assured in this plan. You may, however, want to buy a fresh policy. You can apply for the same product again and the underwriter decides how much cumulative coverage to offer.


According to section 39 of the insurance act, 1938, the nomination has to be done by the policyholder. In case there has been a change in nomination, a notice must be submitted at the servicing registration office of LIC. It is the responsibility after policyholder to check the validity and to the legal effect of the nomination.


Under LIC’s Amulya Jeevan II the risk commencement starts with the purchase of the policy, so even if the policyholder dies after a year, his nominee will receive the death benefit and the policy terminates.


LIC is the oldest insurance company and term plan is the cheapest form of insurance. With a high claim settlement ratio, LIC still claims to be the most popular insurance company in India.


The claim settlement ratio of LIC has been one of the highest always and is at 98% for the last 5 years.


Since there is no element of savings in this plan, there is no paid-up or surrender value of the plan as well. Thus, a loan cannot be provided for this plan.
A loan is provided by LIC only against the paid-up value of the plan and not otherwise.


The exclusions under any plan of the plan are

  • For a suicide committed within 1year from the date of purchase or revival, only 80% of the total premiums paid would be paid as a death benefit and the policy would be terminated. The Sum Assured would not be payable under this circumstance.
  • For a suicide committed after 1year from the date of purchase or revival, the entire sum assured would be paid to the nominee as a death benefit and the policy would be terminated.

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