A ladies' special

LIC's Jeevan Bharti is the only policy targeted specifically at women. Smita Tripathi looks at its salient features

With the insurance sector opening up and private players making an entry into the market, the life insurance sector has become extremely competitive and Life Insurance Corporation has lost its monopoly.

To maintain its leadership, the LIC has been trying to come out with innovative products. One such product is the Jeevan Bharti policy for women. We take a look at its salient features.

The Jeevan Bharti is the only women-specific policy in the country. It is a money-back policy and has a fixed term of 15 years or 20 years.

In case of the 15-year policy, 20 per cent of the sum assured is payable at the end of the fifth and the tenth years. The remaining 60 per cent ,along with the guaranteed additions and any accrued bonus, is payable at maturity.

Under the 20-year policy, 20 per cent of the sum assured is payable at the end of the fifth, tenth and the fifteenth years and the remaining 40 per cent along with guaranteed additions and bonuses is payable at maturity, that is the twentieth year.

What makes this policy different from the regular money-back policies is the special benefits it offers. It comes with two in-built riders which means you do not need to pay additional premium for them.

The female critical illness benefit ensures that you get a benefit equal to the sum assured (up to a maximum of Rs 2 lakh) in case you develop certain critical illnesses including breast cancer, cervical cancer and vulval cancer.

There is a waiting period of six months and if you are detected to be suffering from any of these critical illnesses any time after that, you will be given the sum assured immediately.

What's more, the policy will continue as a regular policy for the remaining term and the premium will be waived.

For example, suppose Mrs A buys a 20-year policy for Rs 1 lakh. As per the terms of the policy she will get Rs 20,000 (that is, 20 per cent of the sum assured) after the fifth, tenth and the fifteenth years.

Also, she gets the remaining Rs 40,000 (or 40 per cent) and the guaranteed additions on maturity.

Now suppose she develops a critical illness in the sixth year. She will get Rs 1 lakh immediately, and will continue to get Rs 20,000 at the end of the tenth and the fifteenth year and Rs 40,000 on maturity, provided she is alive.

In case she dies before the maturity of the policy, her nominees will only get the guaranteed additions.

Under the congenital disabilities benefit, if a child born to the policyholder suffers from any of the listed congenital disabilities including Down's Syndrome and Spina Bifida, then a benefit equal to 50 per cent of the sum assured (subject to a maximum of Rs 1 lakh) will be available.

The benefit is available for two children and will not be payable if the birth of the child occurs after the proposer attains the age of 40.

Again, in spite of the payment of the benefit, the policy will carry on as normal till maturity. However, under this benefit the premium will not be waived.

Now supposing Mrs A does not suffer from any of the mentioned critical illnesses.

However, she dies a year before the policy matures (that is 19 years after having bought the policy). Her nominees will receive the full sum assured (Rs 1 lakh) along with the guaranteed additions and accrued bonuses, if any.

This will be despite the fact that she would have already received Rs 60,000 (at the rate of Rs 20,000 at the end of the fifth, tenth and the fifteenth years).

Jeevan Bharti is aimed at women in the age group of 18 years to 50 years and the sum assured is between Rs 50,000 and Rs 25 lakh. The policy comes with a free insurance cover of three years.

Thus, if the premium has been paid for at least two years, the policy continues to be in effect for the next three years, even if premium is not paid. However, the special benefits are not covered during this period.

The policy also gives you the freedom to pay the premium in advance and enjoy a 4 per cent rebate on the premium amount.

The premium for the Jeevan Bharti is higher than a regular money-back policy.

For example, if Mrs A is a 26-year-old woman then she will pay Rs 7,360 for a Rs 1 lakh policy for 20 years. If she were to buy a normal money-back policy then she would pay Rs 6,287.

However, under the Jeevan Bharti, besides the special benefits, she will also get guaranteed additions of Rs 50 per Rs 1,000 of sum assured for the first five years.

So, at the time of maturity she will get an additional Rs 25,000. Under a normal money-back policy, there may not be any guaranteed additions.

By paying an additional premium of Re 1 per Rs 1,000 sum assured, one can also get a accident benefit rider. In case of death due to accident, twice the amount of the sum assured, will be payable to the nominees.

The Jeevan Bharti, like all other insurance policies is eligible for tax rebate under Section 88 and under Section 10 (10d).