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An ideal flexible Savings scheme for ensuring a better future

An ideal flexible Savings scheme for ensuring a better future. SUDARSHAN The SBI Life endowment policy. Sudarshan endowment . 2 Options: Plan A: Traditionnal endowment Fixed Sum Assured upto policy term. Plan B: Innovative endowment

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An ideal flexible Savings scheme for ensuring a better future

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  1. An ideal flexible Savings scheme for ensuring a better future SUDARSHAN The SBI Life endowment policy

  2. Sudarshan endowment • 2 Options: • Plan A: Traditionnal endowment • Fixed Sum Assured upto policy term. • Plan B: Innovative endowment • The « COLA » option: (5% p.a.) upto policy term: (Cost of Living Adjustment) • 3 Riders: • Term Assurance. • Critical illness (2 options). • Accidental Death/T.P.D. cover. For internal use only

  3. SUDARSHAN ENDOWMENT Fixed Sum Assured: Plan A or Increasing Sum Assured PlanB

  4. Sudarshan Endowment Plan: Common features Policy Term:From 8 years upto 30 years Min. age of entry:12 years Max. age of entry:62years Max. cover age: 70 years Mode of payment: Single,Yearly, Half Yearly, Quarterly and Monthly (for Standing instruction on Bank / Credit Card account; extra charges 2%; 3 months are to be paid in advance) Life cover(multiple of Rs. 1,000): Minimum:Rs. 25,000 Maximum:Rs. 1 crore (Rs. 25 lakhs for minor) • Discount for women, High Policy value • 30 days Money Back Guarantee For internal use only

  5. Sudarshan Plan A:Fixed S.A. for the entire plan • Maturity benefits: • Basic Sum Assured + vested bonus in a lumpsum • In case of death at any time before the term • Basic Sum Assured + vested bonus till time of death. For internal use only

  6. 10 years 20 years 30 years SBI Life Sudarshan Endowment Fixed S.A (Plan A): Example of yearly premium, Sum Assured: Rs. 1 lakh,

  7. Sudarshan Plan B:Increasing Sum Assured (COLA option) • A good protection against inflation: • 5% on the S.A. per year • Maturity benefits: • Increasing Sum Assured + vested bonus in a lumpsum • In case of death at any time before the term • Increasing Sum Assured + vested bonus till time of death. For internal use only

  8. Increasing Sum Assured (Plan B): Minimum guaranteed maturity benefit + vested bonus on increasing Sum Assured For internal use only

  9. 10 years 20 years 30 years SBI Life Sudarshan Endowment increasing S.A.(PlanB): Example of yearly premium, Sum Asssured: Rs. 1 lakh,

  10. Fixed S.A. / Increasing S.A.30 years term, S.A. Rs. 1 lakh, 40 years old woman, yearly premium Rs. 3.47 Lakhs Rs. 2.5 Lakhs Rs. 1.9 Lakhs Rs. 1 Lakh Maturity benefit Plan A & Plan B if vested bonus @ 3% p.a. Fixed S.A. : Rs. 1.9 lakhs Increasing S.A.: Rs. 3.47 lakhs (+ Rs. 1.57 lakhs) Total yearly premium payable: Fixed S.A.: Rs. 81,510 Increasing S.A.: Rs. 1,42,170 (+ Rs. 60,660/-) For internal use only

  11. SBI Life Sudarshan Endowment Yearly Premium Fixed SA/Increasing SA, Sum Assured: Rs. 1 lakh, Men 10 years 20 years 30 years

  12. SUDARSHAN ENDOWMENT Medical selection rules

  13. Medical selection Basic medical test, subject to requirement For internal use only

  14. TAX ADVANTAGES TTax Rebate U/s 88 Made Easy…………… ·Available for Premium Paid on Life Insurance Policies ·Policy can be in the name of Spouse or Children (Major or Minor & Married Daughters) ·Ceiling for Life Insurance Premium Paid: Rs.70,000 For internal use only

  15. TAX ADVANTAGES • Maturity benefits are tax-free in the hands of the policyholder u/s 10 (10D) I.T. Act if, at any point of time during the policy life, premiums paid within one year does not exceed 20% of the basic Sum Assured. • Death benefit are tax-freein the hands of the nominee u/s 10 (10D) I.T. Act. For internal use only Single premium policy: Maturity benefits are taxable

  16. SUDARSHAN: LIQUIDITY Cash if you need  After the policy has acquired Surrender Value, loan available at an attractive rate of interest(PLR of SBI + 1%) from any State Bank branch Surrender Value : 60 % of basic premium paid excluding the first year premium + cash value of existing vested bonus After 3 years premium paid if Policy term is more than 5 years. For internal use only

  17. Payment of Premiums • Premiums can be Q/ HY/ Y: • Grace period: 30 days (death claim will bepaidafter deduction of dues) • Premiums can be monthly: • Grace period: 15 days (death claim will bepaidafter deduction of dues) • Minimum premium for any mode of payment: Rs. 500 For internal use only

  18. Revival of the policy Possible within 5 years from the first unpaid premium: • Submission of a new medical questionnaire • Payments of arrears premiums with interest (PLR of SBI) • SBI Life reserves the right not to accept. For internal use only

  19. Policy shall not be wholly void: when premiums have been paid for: - 3 years forpolicy term 6 years and above. - 1 year forpolicyterm 5 years. Sum Assured shall be reduced in proportion of No. of Premium paid/ Total No. of Premiums payable. No participation in bonuses declared subsequently All riders end. S.A: Rs. 5 lacs No. of premiums paid: 5 Years Total No. of premium: 10Years New S.A = Rs. 5 lacs X 5/10 = Rs. 2.5 lacs New maturity benefit: = Rs. 2.5 lacs + vested bonus till paid-up value date. Paid-Up Value For internal use only

  20. Premium rebate • For the full term of the policy, based on the tabular premium • Due to mode of payment: • Yearly: 2% Half yearly: 1 % Quarterly: no rebate • Discount for women: 5% for regular mode- 1% for SP • High value policy: calculation on basic cover • Rs.1 per ‘000S.A. for S.A. more than Rs. 1 lakh upto Rs. 2 lakhs • Rs. 2 per ‘000S.A. for S.A. more than Rs. 2 lakhs upto Rs.5 lakhs • Rs. 3 per ‘000S.A. for S.A. more than Rs. 5 lakhs • For Single Premium policy: 30% of the above rates X term of policy. No rebate on extra premium for riders Aggregate the % of premium rebate For internal use only

  21. SBI Life SUDARSHAN 30 days Money BackGuarantee If a client is not satisfied with the features of the policy, he can return it within 30 days of the date of policy SBI Life will give him a complete refund For internal use only

  22. SUDARSHAN 3 riders are available Term Assurance rider Critical illness rider (4 or 6 critical illnesses) Accidental rider (Acc. Death – Acc. TPD)

  23. Fixed S.A. (Plan A) • Sum Assured • + Vested bonus • Increasing S.A. (Plan B) • Increasing SA • Fixed S.A. (Plan A) • Sum Assured • + Vested bonus • Increasing S.A. (Plan B) • Increasing SA In case of Death At maturity How to use the 3 riders? Higher protection for your family in case of death due to any cause Opt for TERM ASSURANCE rider Protection for you/your family in case of critical illness Opt for Critical illness rider Protection for you/your familly in case of accidental death/TPD Opt for Accidental rider

  24. SUDARSHAN ENDOWMENT Term Assurance rider

  25. Term Assurance Rider • Min. entry age: 18 years • Max. entry age: 60 years • Max. cover age: 65 years • Min. duration: 5 years • Max. duration: upto term basic policy/65 years whichever is earlier. • Min S.A.: Rs. 25,000(x 1,000) • Max S.A.: 3 times the basic SA /Max.Rs. 50 lakhs whichever is lower. • Premium: age/term/amount S.A. Available at entry time only (minor can joins at 18 years) For internal use only

  26. Term Assurance benefit • Death benefit: • Nominee will receive additional S.A. under this rider. • + normal life cover • + other rider benefits if any • Survival benefit: • No survival benefit For internal use only

  27. Term Assurance rider:low premium rate • Increases the insurance cover at very nominal extra cost An example: • 30 years old man: • Extra premium • Rs. 351 per lac p.a. for 10 years term • Rs. 404 per lac p.a. for 20 years term • Rs. 509 per lac p.a. for 30 years term For internal use only

  28. Term rider: An example • Mr Barsay takes: • SUDARSHAN plan A for 20 years • SA: Rs. 15 lakhs • Term assurance rider: Rs. 18 lakhs • Nominee will receive in case of death during Year 11: • Basic SA + accrued bonus + SA for Term assurance benefits = Rs. 15 lakhs + Rs. 18 lakhs + accrued bonus = Rs. 33 lakhs + acccrued bonus For internal use only

  29. SUDARSHAN ENDOWMENT Critical Illness rider .

  30. CRITICAL ILLNESS RIDER (not available for Single premium mode) Min. Age: 18 years Max. Age: 55 years Max. cover age: 60 years Minimum duration: 5 years Maximum duration: end of basic cover/60 years whichever is earlier Min SA: Rs. 25,000(x 1,000) Max SA: Upto basic S.A. subject to overall ceiling Rs. 10 lakhs per life insured. Premium: Gender, Age, Duration, option 4 or 6 critical illnesses & amount of cover. Premium rate: • valid only till December 2008 • SBI Lifereserves the right to revise the premium thereafter. For internal use only

  31. CRITICAL ILLNESS RIDER • Available for 4 critical illnesses: • Cancer (malignant) including leukaemia (see) • Coronary Artery Bypass Surgery (see) • Heart Attack (see) • Kidney Failure (see) • Available for 6 critical illnesses: • 4 previous one + • Stroke (see) • Major Organ Transplantation (see) Available at entry time only For internal use only

  32. CRITICAL ILLNESS benefits Exclusion period 6 months. • When a critical illness is diagnosed: • Policyholder informs SBI Life within 30 days • S.A. under this rider is payable if the policyholder survives for more than 30 days. • No more benefits will be payable from this rider. • Policy still continues with periodical premium (-) extra premium for CI rider. • Survival benefit: • No survival benefit For internal use only No bill to submit: On diagnosis, S.A. for C.I. will be paid

  33. Yearly Premium for Critical Illness rider • SA: Rs 1 lakh, 30 years old policyholder Premium for this rider is eligible to tax exemption u/s 80 D of IT Act For internal use only

  34. SPECIFIC TAX ADVANTAGEu/s 80 D of I.T. Act • Premium paid for critical illness rider is deductiblein respect of medical insurancepremia from the annual income chargeable to tax up to a maximum amount of Rs. 10,000. For internal use only

  35. Some exclusions for Critical Illness rider • Illnesses which are not included as critical illness. • Pre existing injuries or illnesses. • Self injury, attempted suicide, insanity, immorality • Under influence of liquor, drug • Riots, civil commotion, rebellion, war, invasion, hunting, mountaineering… • Breach of law. For internal use only

  36. SUDARSHAN ENDOWMENT Accidental rider .

  37. Accidentalrider: • Min. entry age: 18 years • Max. entry age: 65 years • Min. duration: 5 years • Max. duration: upto term basic policy • Min S.A.: Rs. 25,000(x 1,000) • Max S.A.: Upto basic S.A. subject to overall ceiling of Rs. 20 lakhs per Life insured. • Premium: Rs. 1 per 1,000S.A. under this rider p.a. Available at any time 5 years before term of basic policy For internal use only

  38. Accidental Death benefits • Nominee will receive: • Additional Sum Assured for Accidental cover + normal Life cover + other rider benefits if any Rs. 100 per lakh of Sum Assured p.a. For internal use only

  39. Accidental Total Permanent Disability benefits • Policy holder will receive: • In a lump sum: « accelerated maturity benefits » • One basic S.A/ increasing S.A. (Plan A/B) + vested bonus till date of T.P.D. • In Installments • Sum Assured for accidental benefit in 10 installments till maturity/death whichever is earlier. • At maturity/Death • Net Present Value of balance installments if any will be paid in one lump sum to the policy holder/nominee. • Policy ends immediately • No other benefits will be paid For internal use only

  40. An example of Accidental TPD benefits • Mr Ramani has a SUDARSHAN policy plan B, 20 years term: • SA: Rs. 20 lakhs • Accidental rider Rs. 15 lakhs • In case of Accidental TPD year 13, Mr Ramani will receive: • Immediately • Rs. 32 lakh (20 + 12 as increasing cover) + vested bonus • In installments • 7 installments of Rs. 1.5 lakhs till maturity • At maturity Net Present Value of the balance: 3 installments Rs. 1.5 – (interest rate for advanced payment) • Policy ends immediately • Cumulative Acc. TPD benefits: Rs. 32 lakhs + Rs. 15 lakhs + accrued bonus Rs. 47 lakhs + accrued bonus

  41. Eligibility criterion for ridersat a glance * Minor can opt for this rider when he is at age 18. ** Administration charge: Rs. 250, production of satisfactory medical report

  42. SUDARSHAN ENDOWMENT Medical selection rules for policy with Term Assurance and/or C.I. rider

  43. Medical selection rules: Basic Sum Assured + Sum Assured for Term Assurance + 1.5 X Sum Assured for Critical illness = SUM under consideration Accidental rider Sum Assured is not taken into account for calculation of Sum under consideration For internal use only

  44. Medical selection Based on Sum under consideration/Age Basic medical test, subject to requirement For internal use only

  45. An example… • Mr Krishna a 34 years old man wants to take a SUDARSHAN policy. • Plan B: Rs. 3 lakhs • Accidental rider: Rs. 1.5 lakhs • Term Assurance rider: Rs. 2 lakh • Critical Illness: Rs. 80,000 • How do we calculate the Sum under consideration? Basic SA + Term Assurance rider SA + 1.5 x CI rider SA Rs. 3 lakhs + Rs. 2 lakhs + Rs. 1.2 lakhs = Sum under consideration: Rs. 6.2 lakhs For internal use only

  46. Try by yourself… • Ms Yenganti is 46 years old. • She wants a policy of Rs. 30,000 • With the following riders • Accidental rider: Rs. 30,000 • Term Accident: Rs. 30,000 • Critical illness: Rs. 30,000 What is the amount of Sum under consideration? Does she have to go for medicals? • Sum under consideration = Rs. 105,000 It is more than Rs. 1 lakh: Medicals are compulsory For internal use only

  47. I.R.D.A. Guideline: • “The allowable rider or riders on the product shall be clearly spelt out with regard to their scope of benefits, and in no case,the premium relatable to all the riders put together shall exceed 30% of the premium of the main product” • Premium for Critical illness rider is not taken into account. • Applicable on extra premium for Term Assurance & Accidental rider. For internal use only

  48. Basic Premium Simple concept 11 • If it is more than 30% • 2 issues: • Increase the basic cover • Decrease the riders amount Maximum amount: 30% of basic premium • Extra premium • For • Term Assurance • Accidental cover 2 For internal use only

  49. HOW TO SELL SUDARSHAN endowment?

  50. Who are the SUDARSHAN customers? • People who want protection cum tax-free savings. • People who have dreams to realise: - house, car, education, marriage, retirement • Salaried people and others who want tax rebate u/s 88. • People who want protection against inflation for their savings (Plan B). For internal use only

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