Does the LIC Jeevan Shiromani Policy provide for deferred survival and maturity benefits

On December 19th, 2017, LIC will introduce the LIC Jeevan Shiromani Plan 847, a new money-back plan. Let's look at the LIC Jeevan Shiromani Plan 847's benefits, evaluation, and returns.

It is a money-back plan with a low premium payment that is non-linked and profitable. This approach, according to LIC, is specifically intended to target HNIs (High Net Worth Individuals). You are also covered for serious illnesses under this plan.

Benefits of LIC Jeevan Shiromani Plan 847

Now let us see the benefits available under LIC Jeevan Shiromani Plan 847.

This plan offers a guaranteed addition. For the first 5 years, the guaranteed addition will be Rs.50 per Rs.1,000 Sum Assured.

From the 6th year onward to till POLICY PREMIUM PAYING TERM, this plan offers the guaranteed addition of Rs.55 per Rs.1,000 Sum Assured.

1. Death Benefits of LIC Jeevan Shiromani Plan 847

Under this plan, there are two requirements that must be met in order to pay the death benefits.

a) Death during the first five years of the policy's duration
The benefit is as follows: if death happens within the first five years of the policy's duration, guaranteed addition at a rate of 50 rupees for every 1,000 rupees of death benefit.

b) Death between the sixth year and the policy's maturity date
It will be Rs. 55 per Rs. 1,000 of the Sum Assured beginning with the sixth year. 

Meaning of “Sum Assured on Death” is defined as HIGHER of the below.

• 10 times of your annual premium (excluding taxes, the extra amount due to underwriter decisions or rider premium)
• 125% of Basic Sum Assured
• 105% of all the premiums paid as on date of death

As an alternative to a lump sum payout, you can choose to delay the death benefits payable to your nominee over a period of 5 years, 10 years, or 15 years. The policyholder may use this during his lifetime. In light of this, the policyholder will decide how long the nominee must wait before receiving the death benefits. The nominee is unable to change this feature. Either a percentage of the death benefit or the full amount of money may be used.

The LIC will pay the instalments in the manner the policyholder selected in advance. The interest rate on such a payment will occasionally be established by LIC.

2. Survival benefits of LIC Jeevan Shiromani Plan 847

If policyholder survives to each of the specified duration during the policy term, a fixed % of Basic Sum Assured will be payable. This fixed % is as below.

• For 14 Yrs Policy-30% of Basic Sum Assured on each 10th and 12th policy year.
• For 16 Yrs Policy-35% of Basic Sum Assured on each 12th and 14th policy year.
• For 18 Yrs Policy-40% of Basic Sum Assured on each 14th and 16th policy year.
• For 20 Yrs Policy-45% of Basic Sum Assured on each 16th and 18th policy year.

This policy allows you the option to accept the survival benefit at the deferred date, similar to the death benefit deferred benefit (postponing the payment receivable). At a later time, when you need it, you can collect the survival benefit in accordance with your wishes, along with interest.

This survival benefit must be delayed, but only until policy maturity. You must first be granted this benefit and interest before that. This deferred survival benefit and interest will be paid by LIC together with interest at the time of maturity, death, or surrender if you do not take advantage of it earlier. The interest will accrue annually, but LIC will occasionally fix the rate.

You must choose this deferred survival benefit receiving option six months before the actual due date of the survival benefit. If not, LIC will pay your survivor benefits according to the due dates.

3. Maturity benefits of LIC Jeevan Shiromani Plan 847

If the policyholder survives up to the policy period, then he will receive the below benefits.

• For 14 Yrs Policy-40% of Basic Sum Assured+Guaranteed Addition+Loyalty Addition.
• For 16 Yrs Policy-30% of Basic Sum Assured+Guaranteed Addition+Loyalty Addition.
• For 18 Yrs Policy-20% of Basic Sum Assured+Guaranteed Addition+Loyalty Addition.
• For 20 Yrs Policy-10% of Basic Sum Assured+Guaranteed Addition+Loyalty Addition.

You can defer your maturity benefit under this plan in installments for future dates. 5 years, 10 years, or 15 years are the potential timeframes. Only the policyholder can use this option.

To be paid in installments over the following five, ten, or fifteen years, you can select either a percentage of the net maturity amount or the absolute sum. You will be compensated by LIC in advance of these payments. There are four different payment options: annual, semi-annual, quarterly, and monthly.

The appropriate interest rate for this installment will be announced by LIC as needed

This option must be disclosed to LIC three months prior to the policy's maturity date. If the policyholder wants to stop and is interested in converting the remaining installments to a lump sum during this deferred maturity benefit term, he can choose that.

The remaining installments will be paid to the nominee if the policyholder passes away during this deferred maturity benefit term. This choice for deferred benefit installments cannot be changed by the candidate.

4. Inbuilt Critical Illness Benefits of LIC Jeevan Shiromani Plan 847

This plan provides built-in critical illness benefits in addition to the previously mentioned death, survival, and maturity benefits.

The following benefits will be paid upon the initial diagnosis of any one of the 15 Critical Illnesses listed below, as well as if the policy is in effect.

But first, let's go over the list of the 15 severe illnesses that this plan covers. These are listed below.

1. Cancer of specified severity
2. Open chest CABG
3. Myocardial infarction
4. Kidney failure requiring regular dialysis
5. Major organ/bone marrow transplant (as the recipient)
6. Stroke resulting in permanent symptoms
7. Permanent paralysis of limbs
8. Multiple sclerosis with persisting symptoms
9. Aortic Surgery
10. Primary (idiopathic) pulmonary hypertension
11. Alzheimer’s disease/dementia
12. Blindness
13. Third-degree burns
14. Open heart replacement or repair of heart valves
15. Benign brain tumor 

Once you are diagnosed with the above-said illness, then LIC will give you the below benefits.

a) Lump Sum Benefit:–

The following conditions must be met in order for the 10% of the Basic Sum Assured in built-in critical illness benefits to be paid:

• This benefit will be paid out after LIC has satisfied the reports with a set deferment period (for specific diseases). Only one payment of the benefit will be made throughout the policy duration.

•A 30-day survival period is applicable from the date that a critical illness was diagnosed. Death during the 30-day window will result in the payment of no critical illness benefit.

• There will be a 90-day waiting period starting on the date the danger started or was revived (whichever is later). However, incidents involving accidents are not covered by this waiting time. 

b) Option to defer the payment of premiums if there is a critical illness claim:-

If LIC approves the critical illness claim, you will not be responsible for paying the premiums for the following two years. No interest will be assessed by LIC on such a late payment. However, if a survivor benefit is owed to the policyholder within this 2-year period, LIC will pay it by DEDUCTING the outstanding premiums.

c) Medical Second Opinion:–

According to the agreement made by LIC, the policyholder may choose to obtain a second opinion from reputable hospitals in India or from healthcare providers who have been appointed by LIC.

Keep in mind that you can use this function free of charge just once during the duration of the policy. The policyholder may seek a second opinion as soon as they notify LIC of their ailment (without bothering about whether their critical illness benefit will be accepted or not).

However, this second opinion is untested. If you take the test, you are responsible for paying the fee. Additionally, this second opinion is solely based on the services and suggestions offered by LIC.

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