03/07/2017
Below are the main features of LIC’s new plan for females;
Minimum Sum Assured : Rs 75,000
Maximum Sum Assured : Rs 3,00,000
Minimum Policy Term : 10 years
Maximum Policy Term : 20 years
Available for : Female Lives only
Age at entry : 8 years
Maximum age at maturity : 70 years
Type of Plan : Endowment
Benefits under LIC Aadhaar Shila Life Insurance Policy
Death Benefit under Aadhaar Shila LIC Plan ;
On death during first Five Years of the policy ;
Death claim amount equal to 110% of Basic Sum Assured is payable to the Nominee.
On death after 5 years of the policy and before maturity:
Death claim amount will be equal to 110% Basic Sum Assured + Loyalty Addition (LA). (So, Loyalty addition is applicable after 5 policy years only)
Maturity Benefit under LIC Aadhaar Shila Policy : If the Life Assured survives till the end of the policy term, “Sum Assured on Maturity” along with Loyalty Addition, if any will be payable to the Life Assured.
Auto Cover Benefit : In case, policy holder does not pay the life insurance premium, the policy will be converted as ‘Paid-up Policy.’ But, under LIC Aadhaar Shila plan, full risk cover is available (for certain extended period) to the policy holder even if the regular premium is not paid. This duration is termed as ‘Auto Cover Period‘.
If three policy year premiums have been paid (but less than five full years’ premium have been paid) and any subsequent premium is not paid then “Auto Cover period” of six months from the due date of the first unpaid premium (FUP) will be available to the policyholder.
If five policy year premiums have been paid and any subsequent premium is not duly paid: “Auto Cover period” of 2 years from the due date of the first unpaid premium will be available.
My Opinion on LIC’s New Plan Aadhaar Shila
This new LIC policy is a typical Endowment Plan with an extended Auto cover feature, that’s it. There are no major benefits from this plan as being highlighted in the marketing materials of the company. Kindly ponder upon below points before you buy LIC’s women specific new life insurance plan – Aadhar Shila ;
Ceiling on Sum Assured : The maximum sum assured that can be taken under this plan is Rs 3 Lakh only. So, this is surely not enough if you are looking for life cover alone. You may consider buying a Term insurance plan so that you can get decent life cover. The value of Rs 3 Lakh after say 10 or 20 years would be very negligible. (Read: ‘If Life is unpredictable, Insurance can’t be optional‘)
Investment Returns: So, if this is not suitable for your life cover requirements then most of you might want to get good maturity returns, am I right? But, these kind of traditional plans can at best give you 5-6% returns. If your investment objective is better returns then there are plenty of other investment options available in the market. (Read : ‘List of best investment options‘)
No Simple Reversionary Bonuses: There are no simple and annual bonuses under Aadhar Shila Plan. Loyalty Additions (if any) alone are paid. (Read : ‘LIC’s latest Bonus rates 2016-17‘)
Tax Savings : If your objective is tax saving cm better returns, you may consider investing in an ELSS mutual fund scheme. Even PPF (Public Provident Fund) can give your better returns than this policy and it is tax-efficient too. (Read: ‘Term insurance + PPF Vs Endowment Life insurance plan‘ & ‘Best ELSS Tax saving Mutual Fund Schemes‘)
Govt’s life insurance scheme like ‘Pradhan Mantri Jeevan Jyothi Bhima‘ is available at much lower premium rate than this plan. Based on the available information, a 30 year old female has to pay around Rs 6,900 to get Rs 2 Lakh Sum assured under Aadhar shila plan and the same sum assured (term life cover without any additional benefits) is available at a premium rate of Rs 330 per year under PMJJBY.
