LIC Jeevan Aadhar. Table 114.

======Jeevan Aadhar. Table 114======

W.e.f . 17-01-1996

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SA Rebate: Rs 50,000 & above – Rs 2/-

Mode Rebate: Yly-3% , Hly-1.5% , Qly & SSS- Nil

Maturity Benefits:

No maturity benefits.

Suitability:

(a) To make provision for maintenance of Handicapped Dependent (HD) this plan is designed.

(b) To Group A deformity with loss of one limb (LA) at std rates with AB, PDB & EPDB , & to all classes of sub-standard lives this plan is allowed.

Definitions:

(a) Handicapped Dependant: He is a relative of LA, who is taking a policy and is suffering from mental retardation and from a permanent physical disability. Dependent’s IQ should be less than 50% in case of mental retardation. This deformity, physical/mental has to be certified by a Govt. Doctor.

(b) Notional S.A.: Gtd SA ((Terminal Addition + 10% of basic SA per year)) + Basic SA = Notional SA. If the policy is in full forrce for atleast 10 years, terminal addition is added. In the manner specified below on the death of the L.A. this will become payable.

(i)  Basic SA: The Basic SA is the SA for which the contract entered into.

(ii) Gtd. Additions: Rs. 100 per 1000 SA for each completed policy year for which policy was in full force. Upto age 65 of the LAor his death if earlier such SA will accrue.

Other Details:

Nominee is called as HD and LA is the person paying the premium. Nominee should be HD or trust. The policy is like limited payment whole life policy where the payment of premium is limited to a specific term & there is no maturity. Only on death of LA the claim is paid.

Death Benefits:

(a) The contract ceases if HD dies before LA and LA , will have the option to receive a refund of premiums paid excluding extra premium paid for DAB or keeping the policy for a reduced paid-up SA. Only on the death of LA, Terminal Addition as applicable + The reduced paid-up SA including GA will be paid as lumpsum to legal heirs.

(b) The nominee will get the following on the death of LA: Terminal Benefits (TB) if any, (if premiums have been paid for a min. of 10 years) which is known as notional Sum assured or lumpsum + SA + GA at Rs 100 per 1000 SA. 80% will be used to give a “annuity for 15 years certain & life thereafter” and balance 20% of Notional SA will be paid to HD.  Based on the age of the HD at the time of claim, the amount of annuity will be calculated.

Income Tax:

(a) Under section 80DD of IT Act, premiums paid are 100% deductible.

(b)Allowable Deduction: In case of normal disability of HD, Rs 50,000. In case disability is severe & degree of disability exceeds 80%, Rs 75,000. All the deductions allowed in the previous year/s under this plan will be treated as taxable income in case HD dies earlier than the LA (premium payer).

Example:

Mr. Jay aged 46 years takes a policy for his handicapped child(aged 10 years) for term of 20 years, SA Rs. 2 lakh. After 15 years term, if Mr. Jay dies, his handicapped child will get Rs. 5,31,000 (3,00,000GA + 2,00,000 SA + 31,000 Notional Terminal Bonus) which will be paid to him as follows:

20% of Rs 5,31,000, i.e. Rs 1,06,200 immediately & balance 4,24,800 will be invested to get annuity of Rs 38,147 p.a. at the assumed annuity rate of Rs. 89.80 per Rs 1000 claim amount (this is only assumed amount. Actual annuity will depend on rate applicable at the time of claim).

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