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LIC SIIP (852)

LIFE INSURANCE CORPORATION OF INDIA

CENTRAL OFFICE

Re: INRODUCTION OF LIC’s SIIP.

LIC’s SIIP (Plan no 852)

Who are the potential customers:

a) Investors with a relatively longer term wealth creation goal- LICs SIIP is ideal for individuals with a longer period of investment horizon along with risk cover.

b) Investors with varying risk profile- 4 types of fund option available with equity component ranging from 0 to 80 percent. So caters to all type of investors starting from conservative investors to investors with high risk appetite.

c) Market savvy investors who want to track their investments- Option to switch between funds according to the market volatility and risk taking attitude of the investors thereby maximizing returns.

d) Investors starting from age as low as 90 days to as high as 65 years who has a steady income and who want disciplined investment in stock market in a systematic way under the expertise of dedicated fund manager along with life insurance protection (with the maximum risk coverage till 85 years ).

Unique Selling Point of LIC’s SIIP

1. Market linked returns through systematic investment along with insurance coverage with

Yly/Half yearly/Quarterly and Monthly(NACH) mode of payment.

2. Lower Basic SA for higher age- 7 times of Annualised Premium for age 55 years and above(

10 times for Ages below 55 years) resulting in higher investible amount with probability of

more investment returns

3. Flexibility-

a) Option to choose between any 4 funds based on risk profile

b) Switch between any 4 funds with 4 switches allowed free of charge during a given policy

year according to market or interest rate volatility to maximize returns

c) Facility to partially withdraw the units at any time after the fifth policy anniversary

provided all due premiums till date of partial withdrawal have been paid subject to certain

conditions and charges.

d) Settlement Option – _Option available to receive the death proceeds in installments.

e) Option to opt for Accidental Death benefit Rider

f) Option to purchase both online and offline

4. Transparency -a)All the charges on policy like premium allocation charges. Mortality

charges, Fund Management charges etc. are declared in advance to increase transparency

b) Issue of Unit Statement-Periodical statement of accounts to be issued to policyholders each

year disclosing the actual charges levied and the fund value at the beginning and end of the

year.

5. Low Premium Allocation charges- For Offline sale it is 5%in 1st year, 5.50% from 2nd to 5th

year and 3% thereafter. , for online sale it is 3% in 1st year,2% in 2nd to 5th year and 1%

thereafter.

6. Mortality charge- During the policy term mortality charge will depend upon the Sum at

Risk which shall be the highest of a) BSA in case of in force policies, or Paid up S.A in case of

reduced paid up policies b) Unit Fund Value c) 105% of total premium received less Unit Fund

Value.

7. Refund of Mortality charge- Provided all due premiums under the policy have been paid ,

on LA surviving the stipulated Date of Maturity , an amount equal to the total amount of

mortality charges deducted in respect of life insurance cover shall be payable along with

maturity benefit..

8. No policy administration charge under the plan.

9. Guaranteed Additions- G.A as a percentage of Annualised Premium shall be added to the

Unit Fund on completion of specific duration of policy years.

10. Nil Bid/Offer spread.

11. Liquidity – _a) Partial withdrawal b) Surrender

12. Discontinued policy Fund if the policy is discontinued during the 5 years lock in period

and reduced paid up policy if the policy is discontinued after a grace period of 5 years lock in

period with an option revive the policy during the revival period of 3 years.

13. Assignment allowed under the plan.

14. Unique Agency Commission with higher commission rate for higher premium band and

longer durations. Bonus commission at the rate of 40% of FYC. Development Officers credit is

20% of FYP.

SALES TALK

INRODUCTION OF LIC’s SIIP.

Agent:

Good afternoon sir.

Client:

Good afternoon. Thanks for prompt delivery of my renewal premium

receipt. Now tell me why you have come today.

Agent:

Sir, I am very happy to let you know that you that LIC has just introduced

a very attractive plan specially designed for you. You were telling last time

that I always talk about conventional plan. Now LIC has come out with a

regular premium Unit Linked Plan.

Client:

Yes, conventional plans only you were telling. I would like to go with the

market to see my investment appreciating in value. So, now you have the

plan for me?

Agent:

Yes Sir. LIC’s SIIP will do exactly what you asked for.

Client:

Ok, tell me what the features of this plan are.

Agent:

Sir, LIC’s SIIP is a Regular Premium, Non-Participating, Unit Linked,

Individual Life Insurance plan which offers insurance cum investment

during the term of the policy.

Minimum Premium:

Mode :

Yearly Rs. 40,000
Half-Yearly Rs. 22,000
Quarterly Rs.12,000
Monthly (NACH) Rs. 4,000
Maximum Premium : No limit.
Maximum Entry Age : [65] years (nearer birthday)
Policy Term : 10 to 25 years
Minimum Maturity Age : [18] years (completed)
Maximum Maturity Age : [85] years (nearer birthday)
Premium Allocation charges: 3% to 8% of Annualized premium
4 types of Investment funds will be available for allocated premium.
4 switches from one type of fund to other will be free. After that Rs. 100/-

for per switching will be charged.

No bid-offer spread.
There will be a lock in period of 5 years. Discontinuance during lock-in

period will attract charges.

Charges: Premium Allocation charge, Mortality charges, AB charges, switching charges, fund management charges, partial withdrawal charges are deducted but there is no policy administration charges for this policy.
GUARANTEED ADDITIONS:

Guaranteed Additions as a percentage of Annualized Premium shall be added to the Unit Fund on completion of specific duration of policy years provided all due premiums have been paid and the policy is in force. Rate of addition will be as in the table below;

End of Policy Year Guaranteed Additions (as percentage of one Annualized Premium)

6 5%

10 10%

15 15%

20 20%

25 25%

Client:

What will I get in maturity?

Agent:

Sir, on surviving the stipulated Date of Maturity, an amount equal to the Unit Fund Value is payable. Also provided all due premiums under the policy have been paid, on surviving the stipulated Date of Maturity, an amount equal to the total amount of Mortality Charges deducted in respect of life insurance cover shall be payable along with the Maturity benefit.

Client:

What is the death benefit available then?

Agent:

Sir, under this policy death benefit is as following;

On death before the Date of Commencement of Risk an amount equal to the Unit Fund Value shall be payable.

On death after the Date of Commencement of Risk an amount equal to the highest of the following shall be payable:

I. Basic Sum Assured less any Partial Withdrawals made during the two years’ period immediately preceding the date of death ;or

II. Unit Fund Value; or

III.105% of total premiums received up to the date of death less Partial Withdrawal.

Where Basic Sum Assured is defined as;

For Ages below 55 years :

(10* Annualized Premium).

For Ages 55 years and above :

(7* Annualized Premium).

Client:

May I surrender a part of my fund value in case of emergency?

Agent:

Sir, you can partially withdraw the units at any time after the fifth policyanniversary, provided you have paid all due premiums till date of partial withdrawal, subject to the following:

i. In case of minors, partial withdrawals shall be allowed only after Life Assured is aged 18 years or above.

ii. Partial withdrawals may be in the form of fixed amount or in the form of fixed number of units.

iii. The Maximum amount of Partial Withdrawal as a percentage of fund

during each policy year shall be as under:

Policy Year Percent of Unit Fund

6th to 10th 20%

11th to 15th 25%

16th to 20th 30%

21st to 25th 35%

The above Partial withdrawal shall be allowed subject to minimum balance remaining after allowing for partial withdrawal is not less than 3 annualized premiums.

Client:

Is there any option for opting Accident Benefit cover under the plan?

Agent:

Sir, You may avail LIC’s Accident Benefit Rider in this plan also. AB charges will be levied at the beginning of each policy month by cancelling appropriate number of units out of the Unit Fund Value. The monthly Accident Benefit Charge will be one twelfth of the annual Accident Benefit Charge.

Client:

Can I pay Top Up premium under this plan?

Agent:

Sorry Sir, Top up is not allowed under this plan.

Client:

Agent:

Sir, one more important feature of the plan is the settlement option where death benefits may be spread over a five year period if option exercised beforehand.

Client:

Very good. It is a plan that will allow me to invest in Market along with Insurance Cover. Thank you for updating me.