Aditya Birla Sun Life Insurance Jeevan Bachat Plan – Review, Features and Benefits

Small savings build-up to create a bigger corpus for tomorrow. Aditya Birla Sun Life Insurance Jeevan Bachat Plan is a non-linked, non-participating, unit-linked plan which boosts your savings by offering guaranteed returns and life cover 10 times of your premium along with tax benefits. So, start saving for a brighter future right away.

Features of this Policy –

• Fully guaranteed benefits on death or maturity
• Flexibility to choose the policy term
• Flexibility to choose the premium paying term

Benefits of this Policy –

a) Death Benefit –

In the unfortunate event of the death of the Life Insured during the policy term, the company shall pay to the Nominee the following –

• Sum Assured on Death plus
• Guaranteed Additions accrued to the date of death

i) For limited and Regular Pay policy, the Sum Assured on Death is highest of the following –

• Sum Assured as an absolute amount to be paid on death; or
• 10 times of the Annualized Premium; or
• 105% of the Total Premiums Paid as on the date of death;

ii) For single pay policy, the Sum Assured on Death will be highest of the following –

• Sum Assured as the absolute amount to be paid on death; or
• 125% of the single premium (excluding applicable taxes, if any); or

The Annualized Premium shall be the premium amount payable in a year chosen by the policyholder excluding, the taxes, rider premium, underwriting extra premiums, and loadings for modal premiums if any.

The Total Premiums Paid means a total of all the premiums received, excluding any extra premium, any rider premium, and taxes.

Where this policy has been taken for the benefit of the life insured who is a minor, the policy shall automatically vest to the life insured on his attaining age 18.

b) Accidental Death Benefit –

If the Life Insured is aged at least 18 years (Age last birthday) at the time of death and dies as a result of an accident during the Policy Term then in addition to the Death Benefit defined above, an Accidental Death Benefit equal to Sum Assured on Death will be payable. In the event of the death of the Life Insured before attaining 18 years of age, no Accidental Death Benefit will be payable.

c) Maturity Benefit –

In the event of Policyholder surviving up till the end of the Policy Term, the company shall pay the insured the following-

• Maturity Sum Assured plus
• Guaranteed Additions accrued to date

Maturity Sum Assured is as provided in the Policy Schedule is equal to the Total Premiums paid.

d) Guaranteed Additions –

• For Limited Pay policies, the guaranteed addition would accrue after the completion of the premium paying term.
• For single pay policies, the guaranteed addition will accrue from the end of the first policy month.
• For Regular Pay policies, the guaranteed addition will accrue from the 8thpolicy year.

The Guaranteed Additions are determined as per 1000 of Maturity Sum Assured and guaranteed Additions Rate as specified in the Policy Schedule. The Guaranteed Additions shall accrue on the policy as one-twelfth of the per annum guaranteed Additions at the end of a policy month until the end of the policy term or death of the life insured if earlier.

Guaranteed Additions shall be payable (if applicable) in the event of the death of the Life Insured or on the Policy Maturity Date, whichever is earlier. Guaranteed additions shall not be applicable in the event of the death of the life insured during the period before their accrual.

e) Reduced Paid-Up Benefit –

If the insured discontinues paying premiums after having paid premiums for at least two full policy years, their policy will not lapse but continue on a Reduced Paid-Up basis. Under Reduced Paid-Up, Sum Assured, Sum Assured on Death and Maturity Sum Assured shall be reduced in proportion to the premiums actually paid to the total premiums payable during the policy term. Guaranteed Additions shall accrue on the reduced maturity sum assured.

Once the policy has become Reduced Paid-Up, the benefits payable in “Your Benefits” section are amended as follows:

• Death Benefit – In the unfortunate event of the death of the life insured during the policy term, we shall pay the reduced Sum Assured on Death plus Guaranteed Additions accrued to the date of death to the nominee.
• Maturity Benefit – On the maturity date, you shall receive the reduced Maturity Sum Assured plus Guaranteed Additions accrued.

Eligibility Conditions of the Policy –

Is there any grace period in the policy?

If the insured is unable to pay the installment premium by the due date, then they will be given a grace period of 30 days to make the payment of due premium, during which time all benefits under the policy will continue. If the company does not receive the policy premium within the grace period, the policy benefit may lapse fully or be deemed paid-up as per Premium Discontinuance and Policy Paid-Up provisions.

Can I cancel the policy if I didn’t like its terms and conditions?

The insured will have the right to return their policy to the company within 15 days (30 days in case the policy issued under the Distance Marketing) from the date of receipt of the policy, in case you disagree with the terms & conditions of your policy.

The company will further refund the premium paid once they receive a written notice of cancellation (along with reasons thereof) together with the original Policy Documents. The company may then reduce the amount of the refund by proportionate risk premium for the period of cover and expenses incurred by the company on stamp duty charges while issuing the policy.

Can I surrender the policy?

a) Your policy will acquire a Surrender Value any time after 2nd policy anniversary upon receipt of at least all premiums due in the first two policy years for Limited Pay and Regular Pay.

b) Immediately after policy issuance for single pay.

The Guaranteed Surrender Value is a percentage of Total Premiums Paid. Your policy also acquires a Special Surrender Value. Your surrender benefit is the higher of the following –

• Guaranteed Surrender Value, or
• Special Surrender Value

When can my policy discontinue?

If the insured is unable to pay the installment premium by the due date, the insured will be given a grace period of 30 days to make the payment of due premium, during which time all benefits under the policy will continue.

(a) If two (2) full year installment premium is not paid –

If the company does not receive the entire installment premium by the end of the grace period, this policy will be deemed lapsed and all benefits will cease immediately. The lapse date is the date the first unpaid premium was due. The insured will be given a period of five years from the lapse date to revive your policy as per the Revival provision.

(b) If two (2) full years installment premium are paid –

If the company does not receive the entire installment premium by the end of the grace period, this policy will be deemed paid-up, and benefits will continue as per the Policy Paid-Up provision. The paid-up date is the date the first unpaid premium was due. The insured will be given a period of five years from the paid-up date to revive the policy for its full benefits as per the Revival provision.

Is there any policy paid-up provision in this policy?

The insured may choose to stop paying premiums at any time once all due Installment Premiums, for two policy years have been paid and continue this policy on a paid-up basis. Your policy will automatically be deemed paid-up if we do not receive your installment premium within a grace period.

a) Under the paid-up status, your policy will continue with the following modifications in the benefits –

• The Reduced Paid-Up (RPU) Sum Assured on Death, Reduced Paid-Up (RPU) Accidental Death Benefit and Reduced Paid-Up (RPU) Maturity Sum Assured shall be equal to the Sum Assured on Death, Accidental Death Benefit and Maturity Sum Assured, respectively, multiplied by the ratio of total premiums actually paid to the total premiums payable during the Premium Payment term.
• Guaranteed Additions shall accrue on the basis of the Guaranteed Additions Rate as specified in the Policy Schedule and the Reduced Paid-Up Maturity Sum Assured.

b) Accidental Death Benefit under Reduced Paid-up –

In case of death of a Life Insured due to accident after attaining age 18 years, an amount equal to the Reduced Paid-Up Sum Assured on Death will be paid to the Nominee as an additional Accidental Death Benefit.

Can I revive my lapsed policy?

To revive the policy, the insured must pay all unpaid installment premiums due till date plus interest. The current applicable interest rate is 10.05% p.a.

Can I take a loan against this policy?

Yes, the insured can take a loan against their policy at any time after their policy acquires a surrender value. The minimum policy loan is Rs. 5,000 and the maximum is 85% of the then Surrender Benefit less any outstanding policy loan balance as of date. Your outstanding policy loan balance on any date shall be equal to all policy loans made to date, including accrued and unpaid interest thereon, less any policy loan repayments you have made to date.

If the policy is in reduced paid-up status and if the outstanding policy loan balance at any time equal or exceeds the then prevailing surrender value, then on that date, all benefits under the policy shall cease immediately and policy shall be terminated.

If the policy is in premium-paying status and the outstanding policy loan balance at any time equal or exceeds the then prevailing surrender value, then the policy shall not be terminated. In such cases the company shall send a notice to the policyholder. If the policyholder doesn’t repay the loan or fails to respond to the notice, then the company shall have the right to terminate the policy.

Any benefit payable under this Policy will first be reduced by any outstanding policy loan balance at that time and only the residual value, if any, will be paid to you or your Nominee as the case may be.

When can my policy terminate?

Your policy will terminate at the earliest of the following –

• The date of settlement of Death Benefit; or
• The date of payment of the Surrender Value; or
• The date of payment of Maturity Benefit; or
• On refund of premium in case of free look option
• The date on which the revival period ends after the policy has lapsed; or
• The date on which the outstanding loan amount including interest exceeds the surrender value.

Is there any waiting period in the policy?

A waiting period of 90 days from the Policy Issue Date is applicable for all benefits payable under this coverage. This waiting period will not be applied in case of accidental death. The waiting period will not be applicable in case of revival of the policy.

If the Life Insured dies during the waiting period, then the company shall refund the premiums paid since date of inception of policy (excluding applicable taxes) or the Surrender Value, if greater.

Exclusions under the policy –

a) Suicide Exclusion –

If the Life Insured under this policy dies by committing suicide, within 12 months from the inception of the policy or effective date of revival, whichever is later the company shall pay to the Nominee the premiums paid to date (excluding applicable taxes)or surrender value if higher respectively provided the policy is in force.

b) Accidental Death Benefit Exclusion –

The insured shall not be entitled to any benefits for the death of the Life Insured directly or indirectly due to or caused, occasioned, accelerated or aggravated by any of the following –

• Death as a result of any disease or infection other than directly linked with an Accident.
• Suicide attempted suicide or self-inflicted injury while sane or insane.
• Participation of the insured person in criminal, illegal activity, or unlawful act with criminal intent.
• Taking or absorbing, accidentally or otherwise, any intoxicating liquor, drug, narcotic, medicine, sedative or poison, except as prescribed by a registered medical practitioner other than life assured.
• Nuclear Contamination; the radioactive, explosive, or hazardous nature of nuclear fuel materials or property contaminated by nuclear fuel materials or accidents arising from such nature.
• Entering, exiting, operating, servicing, or being transported by any aerial device or conveyance except when on a commercial passenger airline on a regularly scheduled passenger trip over its established passenger route.
• Engaging in or taking part in hazardous sport(s) or any hazardous pursuits, including but not limited to, diving or riding or any kind of race; underwater activities involving the use of breathing apparatus or not; martial arts; hunting; mountaineering; parachuting; bungee jumping.
• War, terrorism, invasion, the act of a foreign enemy, hostilities (whether war be declared or not), armed or unarmed truce, civil war, mutiny, martial law, rebellion, revolution, insurrection, riot or civil commotion, strikes. War means any war whether declared or not.
• Service in the armed forces in time of declared or undeclared war or while under orders for warlike operations or restoration of public order
• Accident occurring while or because the Insured is under the influence of Alcohol or Solvent abuse or taking of drugs, narcotics or psychotropic substances unless taken in accordance with the lawful directions and prescription of a registered medical practitioner.

Conclusion –

So, by now you know each and every important detail about this policy. Do let me know if I have missed any important points in the comment section. Please feel free to ask any doubts regarding this policy.