Working Capital is defined as the capital of a business which is used by the company to carry out day to day trading operations and is calculated by the current assets minus the current liabilities. Working Capital Financing is mostly used by small companies. It assists them in taking care of the creditors and continue the cash flow on a daily basis.
Every business, be it big or small requires a smooth cash flow to trade and run the operations smoothly. A company carries the risk of ruining its reputation if it doesn’t pay the bills on time. For a complete financing solutions, companies rely on banks for working capital to manage their operations. Working capital financing has broadly been categorized in Trade Credit, Cash Credit/Bank Overdraft, Working Capital loans, Purchase/Discount of Bills, Bank Guarantee, Letter of Credit and Factoring among others. Let’s have a quick look on them.
Working Capital Financing - the types
Trade credit is the credit given by bank to business on the basis of the firm’s reputations and credit worthiness. This system of working capital allows the business to buy or purchase products without making immediate payment and the credit is given on short term basis. There is a free period for the companies to capitalize on, once the free period is over, a fee is charged and the calculation is based on the period of the credit used.
Cash Credit/ Bank Overdraft
This is the most widely used of all the working capital financing by the companies. The facility is given by banks which sanctions a specific amount to business to make payments. The cash credit works mainly because the business is charged interest on the amount used by the company, not on the total sanctioned amount. The companies wisely utilise the facility by depositing a part or the full amount to avoid interest and at the same time gets the benefit of carrying the business without any hassle.
Working Capital Loans
A working capital loans is quite like term loans and is given by financial institutions to companies for investing it on permanent financial needs, not on the temporary or daily financial operations. In this kind of working capital financing, the company has the flexibility to make the payment on installments or the full amount at the closure of the loans.
Purchase/Discount of Bills
This type of finance is also widely used by small companies as it comes out to be more lucrative than others. Regardless of the company’s size and magnitude, a company is bound to generate some bills including recurring charges. These bills work as a document for the sellers who approach the bank with the bills and are given an amount after applying the discount on the bills and the interest. The amount is collected by the bank from the debtor on the maturity date of the bills.
This is popularly known as non-fund based working capital financing where the companies avail bank’s guarantee to minimise the risk or failure of delivering the task undertaken by the company or the services promised by the companies. The guarantee can be revoked by the holder in case of non-performances and the bank makes money by charging commission and may ask for some security before issuing the guarantee.
Letter of Credit
Like Bank Guarantee, this too is known as non-fund based working capital financing. The difference between the two is very marginal. In the former the bank guarantee is revoked and the payment is made to the holder in case of non-performance of the opposite party while in Letter of credit, the payment is made to the opposite party, if the party performs as per the agreement and terms of the Letter.
This is more of a conventional source of funding on a short term basis. The concept works on an arrangement where a company sells its accounts to a third party at a price which is lower than its actual value. This is where third party becomes a ‘Factor’ and renders factory services to the company. The third party (Factor) takes care of the financing as well as hold the right to collect the money from the debtors. Factoring Working capital is again divided into two categories- one is with recourse and the other without recourse. The former comes into the picture when the debtor fails to make the payment which is then taken care by the company and in the latter it is borne by the third party in case of non-payment.
The above working capital financing are the most popular ones and are widely used not only by small business enterprises but also big companies. The nature of finance is solely dependent on the size and the value of the company, along with its credibility in the market. The companies with good number of plants would require some of the above working capital financing to make sure the financial transactions are smooth. Having said that, these are not the only working capital financing modules, but there are others like public deposits, corporate deposits and commercial paper. So, if you are operating a business then you need to do a thorough research and consult with the bank representative to understand what kind of working capital would suit the demand and requirement of your business. In addition, one must also make sure the documents required by the banks before you apply for any such options. Once you understand the process and the complexities of the working capital financing and choose the right option then it could be extremely beneficial for you to operate your business.
Life is too precious to be careless about. Everyone wants a life free of any sort of bad incidents or accidents. Since we you are not born with a far sight and cannot control things beyond your power, you should ensure some preventive measures so that a catastrophic event like a health problem, a car accident, or a death in your family must not wipe out everything you have worked so hard to earn.Insurance is a way of protecting you against these financial losses. For a payment (premium), an insurance company will take the responsibility of compensating your financial losses.
What type of insurances should I have? There are various types of insurance policies available to suit your growing needs and lifestyle, but you need to be careful while choosing them. To help you out, we have compiled a list of some major and popular insurance policies available now-a-days.
Life Insurance - Life is a big “question mark”, you have no idea the challenges you have to face unless you reach that point. But the one stagnant fact that remains is “death”. You are a mortal and thus every heartbeat is precious and takes you one step closer to your death. You cannot control the time of your death, but what you can try to control is the events that follow after it. Events that might hamper the ones you love and want to see happily secured. This is where Life Insurance comes into play. When you buy life insurance, you're paying for the peace of mind that your family will be taken care of in the event of your sudden demise. Life Insurance is a must for adults who have people depending on them financially, such as minor children or a spouse who does not work or even have aged parents. Though it is a morbid thought, but if something happens to you it is their future that will be jeopardized. So if you die during your earning years, your family members will be left with the huge burden to pay the regular bills, pending debts (if you have any), household utility expenses etc. Unless you're very wealthy, these payments may be impossible for your family to make with the loss of your steady income. This cash, that the life insurance will provide, also known as the “death benefit”, replaces your income and can help your family meet many important financial needs like funeral costs, daily living expenses and college funding. Life insurance can pay your dependents money as a lump sum or as regular payments if you die. It gives you the assurance that your dependents will be looked after if you are no longer there to provide for them. The amount of money paid by the insurance company depends on the money scheme.
Health Insurance - Living a healthy illness free life is what everyone dreams of. But that is when reality strikes and you realize that health is something that you cannot negotiate with. Everybody faces some or the other health issue in their entire lifespan. These days, with prices touching the sky so has the cost of treatment. Even a simple visit to a doctor has become expensive. And god forbids, if you are diagnosed by some illness then starting from the hospital admission till the process of your recovery, the bills that your treatment will generate will make you sweat. This is where Health Insurance helps you. It is designed to take care of a portion of your medical and surgical expenses. Depending on the type of health insurance coverage you either need to pay the required cost of your treatment out of your pocket and then the insurance company will reimburse you, or they make payments directly to whoever is treating you. Health insurance can be directly purchased by an individual, or it may be provided through an employer. Medicare and Medicaid are programs which provide health insurance.
Car Insurance - When you buy a car there are high chances that you might be in an accident that can harm your vehicle. The accident might be caused by you or by a third party but the loss incurred can bring tears to your eyes.Worst case scenario, your car might get stolen! Then what? This is when Car insurance (also known as auto or motor insurance), is applicable. The premium of the insurance is dependent on certain parameters like value of the car, type of coverage, vehicle classification etc. Car insurance will give you the peace of mind of driving miles and miles. It will also save you from shelling out huge chunks of money all of a sudden.
Home Insurance - The safety of a house is the most important thing today. With the escalating rate of real estate, having a house is almost equivalent to having liquid cash. Thus this insurance is a must for all those people owning a house. A homeowner’s insurance should cover everything from the structure of your house to your belongings in case of an unforeseen accident. But if you live in an area of the country which is prone to any natural calamity like flooding, earthquakes etc., you may need to buy additional coverage that is not included in your primary policy. Some homeowners insurance is designed for renters, typically. It is referred to as the "renters insurance", and only covers the belongings inside the house. Nobody likes to think about what would happen in the event someone gets injured on his or her property, but accidents happen. And unfortunately, so do lawsuits, even among friends. A typical homeowner’s insurance policy provides liability coverage when someone not living with you is injured while on your property.
Disability Insurance - When people start working often they like to stay in denial that someday something bad might happen that can make them unfit to work for quite a long period of time and thus get stripped off their income source. As a major strata of the society relies on their job for their livelihood, it is a good thing to have a backup. Disability insurance pays some or all of a worker's salary if that worker becomes disabled and is unable to work at his or her job. This disability can come from accidents or injuries on the job, as well as from other illnesses such as cancer or a heart attack. Disability insurance can reimburse disabled workers for some of the income they lose while recovering from illnesses and injuries. Disability insurance is of two types
1. Short-term disability insurance: This usually covers disabling illnesses for up to six months, while long-term disability insurance can cover much of a worker's salary for an entire lifetime, if necessary.
2. Long-term disability insurance: This can cover most of the worker's salary for an entire lifetime, if necessary.
Depending on the type of job one has, the premium can be expensive or moderate. Jobs having higher life risks tend to demand more premium. But is better to pay more money to have a secure future in case of an emergency rather than losing your home or worse.
Long term care insurance - This insurance is exactly as the name suggests. It covers the expenses for people who are aging and need help with daily activities. It covers nursing home expenses or to provide for an attendant. This is the sort of insurance you do not think about until you tend to become older.It is apt for those who do not have anybody to look after them. It is advisable to do it as early as possible because the older you get, the more expensive you get to be insured.
Travel Insurance - This insurance covers any sort of hazards you might go through while travelling. It minimizes the cost of considerable financial risks of traveling like accidents, illness, missed flights, canceled tours, lost baggage, theft, terrorism, travel-company bankruptcies, emergency evacuation, and getting your body home if you die. The various types of travel insurances are as follows:
1. Medical Emergencies and Evacuation
2. Trip cancellation
3. Baggage & personal belongings
4. Personal liability
5. Coming home early & resuming your trip
So if you are travelling alone or going to an unknown place you should definitely have some sort of travel insurance done.
According to your needs, you need to carefully plan which insurances are best suited for you from the above provided list. Insurance cannot be bought hastily and needs a lot of planning beforehand. But if you do manage to buy the right kind of insurances, then surely it will benefit you in the long run financially. So start planning for a better future.
It is very difficult to decide which top is good for me or which locality may be suited better for residence. However, it is not that difficult when it comes to choosing your health insurance. The way you choose things according to your comfort, you must also choose your health insurance according to your needs and requirements. Do not compromise anywhere and be very wise before falling prey to false schemes. As far as possible take the Government health insurance scheme which is trust worthy and better. There is no better health insurance than the one which gives you complete safety and security in your old age. It can be one of the safest bets you will ever put your money on.
However here are some ways through which you can choose a very good health insurance for yourself:-
a) Know the amount you can put in: - It is not that difficult to decide which insurance you ant when you are sure of the amount you can invest and put in the scheme. It is necessary that you be completely sire of the required amount. Suppose if you are planning to put more then you must be in a position to pay the premium. Also it must not be so less that it does not even fulfill your requirements. Keep looking for schemes that keep coming. For example the attest scheme that has come by Prime Minster Narendra Modi demands 12 Rupees a year to be put in the scheme for a health insurance of 3 lakh for natural death and the other one asks for Rs.325 a year for death due to any cause for the same amount. Thus, be aware.
b) Which type of insurance plan is the best and its provider network:-You must keep all of this in mind before choosing any insurance plan. There can be different plan and different of those types which may be providing different levels of coverage for good care. You need to have a thorough check of the inside and outside of the plan's network of hospitals, pharmacies or even hospitals. You can even keep a check of the medical service providers.
c) Type of the insurance plan and also provider network: - There will be hundred voices out there to tell you what health insurance you may need or not. However, carefully analyze the pros and cons of each before choosing. It is really required that you choose a very good health insurance which is going to suit your needs ultimately well and be of good help to you. Thus, make a wise choice of your health insurance.
d) Keep in mind the benefits: - You cannot choose to say no to the benefits which will be provided by the health insurance. Thus be very prompt while you choose any health insurance. See to it that it is definitely going to cover the pre-existing conditions and also simultaneously offer the various free preventive services required.
It is required of you to be quick and prompt whenever you choose any health insurance. Do not settle down for age or think of circumstances which are not required when you take any health insurance for yourself. Make sure you do not make it so late to book one that the right time would have passed away and similarly be sure that you have invested the right amount which is going to help you at the right time. Ultimately the right health insurance is only that which will help you or take care of your financial need when in need. You will need not borrow or ask for money from anyone-That is the deal.
It is good that you have a health insurance. A health insurance gives you the assurity that your medical aid will be taken care of even if you have no money to pay at the same time. In India, though the culture is not very common, many well-known and famous companies do assure of a good health insurance. All employees today must be benefitted with a good health insurance. It is rightfully essential that your health insurance needs are taken care of. However it is equally important that you choose a good health insurance. Here are some ways you can choose a good health insurance:-
a) Choose a good insurance company :- It is necessary that you choose a very good insurance company. It has to be a general insurance company. Such a life insurance should be invested in good policies that will be able to reimburse the family members of those who die due to unforeseen circumstances. A company if good will also be able to offer to you some good policies which other companies would not be able to provide.
b) Plan according to what you see in the future:- If in the future you are seeing circumstances wherein you would be needing money for your aging parents, then you will demand that. Suppose if you are newly married, may be you would want to demand money for the couple. Thus, your health insurance would completely depend upon what and who are in your family.
c) Choose the right amount when it comes to insurance It is very, very important that you choose the right amount when it comes to giving insurance. It should be the maximum amount that a person can be reimbursed or covered for in a single policy year. It thus turns out to be the base year for all future medical claims. If you are taking a small amount you must keep in mind that it must meet your requirement and if in case it turns out to be too big then you should be able to pay the premium.
d) Check the hospitals listed It is really necessary that you choose the right hospital when you make the decision. It is required that the hospitals which have been listed do come in the limit or the area mentioned. The required hospital must be according to standards that you mention. Thus, getting a health insurance is also a tricky task because you need to manage every single detail very well. With some hospitals, there are certain departments which are specifically meant for treating some illness. Thus, have a range of hospitals noted in this insurance.
e) Make a wise and informed decision about the type of health insurance It is wise to ask questions than be in the zone that all your queries are going to get answered. It is wrong to presume that everything is going to be taken care of. You really need to be sure that all your needs are met and your medical claims are attained at the times of need. Take a family floater plan if possible as that aids economically and holistically. Choose a cashless policy over any normal type if reimbursement policy.
It is necessary that you have a good health insurance to comfort you and benefit you when you are old or when you have to face some unforeseen circumstance. Having paid some amount when you have it is better than being left helpless at the end. It is required to have a health insurance because 'If you have lived your life self-independently, why depend on others for nothing.'
Life is vulnerable, and every day counts risks. Insurance helps you to lessen the impact of damages by promising to compensate monetarily under various policies, all you need to do is to choose policies wisely. Be it a life Insurance policy, medical insurance, vehicle insurance, business or any other kind of insurance, you need to have a clear idea of terms and conditions, risks covered, and the situations where your insurance company might deny coverage legally.
While you need to be wise while selecting the policy, you need to be wiser while selecting the policy provider i.e. the insurance company. Going for a wrong insurance company might make the post-loss stressful situation even worse. So in case you are zeroing in for buying an insurance policy, here are a few points that you should consider for selecting the insurance company.
Things to look out in an insurance company.
Reputation of the company - It's always better to go for a company with a good reputation in terms of ratio and ease of claim settlements. Seek help of your friends and family members, ask their experiences on how easy and effective it was to get benefits in loss scenarios. Look out for the reviews of shortlisted insurance companies on internet.
Customer support - Make sure the provider you are going to select has a robust customer care infrastructure in place. A knowledgeable representative will be able explain the details in real terms. With time your needs of coverage will keep changing, and only an insightful knowledge of rates and coverage details will enable you make right decisions. A company with strong customer support mechanism will always prove handy in such situations.
Financial ratings - Financial companies like Moody's and AM Best keep releasing their ratings for Insurance companies time to time. Any company with rating lower than B+ should be dealt with caution. Though the companies with lower ratings offer better prices, but remember effectivity is your priority here.
Experience and consistency - Does the company you selected keep going in and out, or is a long term player? From how many years it's providing services consistently? Try to find out the answers before you finalize the insurance company. A company with consistent services and good reputation will always care for its customer's satisfaction.
Choosing the right insurance company and policy might save a lot of money and headache in long term. Even if costs more, it will pay-off better when needed. Remember, an Insurance policy should be effective, both in terms of flexibility and coverage.
Which is your favorite insurance company? Which one you have selected for your next policy? Let us know via comments.
About Jeevan Jyoti Bima Yojana: Jeevan Jyoti Bima Yojana is a combination of Whole Life plans and Endowment Assurance. It provides financial support and protection against death throughout lifetime of life assured with provision of payment of lump sum at the end of term in condition of survival
Available Premium: Premium payable monthly, quarterly, half-yearly and yearly trough salary deductions as opted by the person throughout selected term of LIC Bima Yojana or till earlier death.
Jeevan Jyoti Bima Yojana Bonuses: This is profit plan and participates in profits of Corporation’s life insurance business. It gets a share of profit in form of bonuses. Or this profit is simple Reversionary bonus which is declared at the end of financial year. This is declared per thousand Sum Assured in the end of year. Once the bonuses declared, they form part of guaranteed benefits of policy plan. Bonuses will be added during selected term and if it occurs earlier. Additional bonus may be payable provided LIC Policy has run for fixed minimum time period.
Recent Budget: Pradhan Mantri Jeevan Jyoti Bima Yojana To provide social security to public, finance ministry is proposing to rope in private sector insurance companies in promoting host of initiatives announced in current budget 2015-16.
“We will involve willing private sector insurance firms in popularising Pradhan Mantri Suraksha Bima Yojna, Pradhan Mantri Jeevan Jyoti Bima Yojana and Atal Pension Yojana (APY), ” Financial Services Department Secretary Hasmukh Adhia said PTI in interview.
This Jeevan Jyoti Bima policy will provide life insurance cover:
1. Individuals those are decided to join this policy scheme before 50 years can continue to have risk of age cover up to 55 years subjected to premium payment.
2. Individuals before 18 years and max 5o years with an account in bank are eligible to take this policy.
3. 330/- is premium payment will be mage every year which is auto debited in installment
4. In case of anyone death this scheme will cover 2, 00, 000/-.
5. The payment will ge auto debited by the bank from account of subscribers.
6. There will be two options will be given at the time of opening new account. One option would be go for auto renewal every year.
7. This life insurance scheme or plan will be given by LIC Corporation and all other life insurers who are willing to get this scheme or those want tie up with bank
Jeevan Jyoti Bima Yojana Eligibility: This scheme is available for age group 18-50 years. Those are eligible to open an account in bank. If the bank account is opened before 50 years then life cover would be active upto 55 years, in case if all term premiums are paid on time.
How to get this scheme: Interested person require linking the bank account and Asdhaar card to apply for LIC Jeevan Jyoti Bima Yojana. Once this formality will be done then a simple form for scheme will be fill up every year. This form will be submitted to bank before 1st JUNE to get all the benefits of this scheme.
Where to get the Scheme?
Desired person can get this scheme from all government insurance companies. For example you can get this scheme from LIC agents. Some private insurance companies offer this scheme. They have tie-up with government banks like SBI etc.
Annual Premium for Jeevan Jyoti Bima Yojana : The person has to pay 330/- per year in favor to intact this scheme.
Nomination for Jeevan Jyoti Bima Yojana : Nominee name should be given in the form with the details of relationship with account holder. If nominee is minor then guardian name can be mentioned in the form.
Premium payment mode: The annual premium will be auto-debited from bank account and will be paid once instance of scheme. There is no other option to pay premium.
Risk coverage under this scheme: The risk cover in this scheme is 2, 00, 000/- in case of accidental or natural death.
• The risk coverage terms will come with 2 options:
• Policy holder must have to renew the policy every year.
• Premium will be auto debited from bank account.
• You can opt longer term 2 to 4 years and every year the bank account of policy holder will be auto debited for premium payable.
Contribution by the Government in this scheme: In this scheme contribution by the government will be decided every year separately. This contribution will come in various public welfare funds from unclaimed money.
Taxation: This scheme is tax free under 80C section and the proceeds amount will receive tax free under section 10. But if proceeds from policy exceed than 1 Lakh and no form 15G of 15h is submitted to insurer. There shall be TDS deduction at rate of 2% from total proceeds.
Pradhan Mantri Suraksha Bima Yojana will be launched soon for poor and social lives to provide them security to citizen. This scheme will cover 2 Lakh accidental or natural death. This scheme or plan holder just has to pay 12/- which will be deducted from account under PMJDY (Pradhan Mantri Suraksha Bima Yojana).
Under Atal Pension Yojana provides a defined pension which is depending on its period and contribution. In this scheme, government will contribute 50% of beneficiaries' premium limited to 1000/- every year, in new accounts opened before December for five years.
New Jeevan Anand Policy:
New Jeevan Anand, was launched by Life Insurance corporation of India. It is a guaranteed return endorsement plan that comes with attractive bonus facility. On maturity of policy, the policyholder will get a Basic Sum Assured with all vested Simple Reversionary Bonus and Final Addition Bonus.
New Jeevan Anand (Table 815) provides you an insurance cover for your entire life. In this plan, the sum assured with the bonus plus Final Additional Bonus will be paid back to the insured person at the end of the term of policy. But the term of New Jeevan Anand policy will continue till the death of the insured person or till the age of 100yrs, whichever occurs earlier.
If the life insured person survives for 100 years of age, a sum assured in the policy will be provided to him at the end 100th age. If the person expires before the age of 100 years, a Sum assured shall be given to his nominee. It provides risk coverage for the whole life of the insured person. This relaxed the person from any worry about the future.
Along with the basic features, an Accidental Death Benefit rider is also available in the New Jeevan Anand Policy with payment of Rs.100/- per 1 Lakh sum assured every year. This is an optional rider, which twice the sum assured to the nominee in the case of accidental death.
Service Tax is applicable on the paid premium of New Jeevan Anand policy, at the rate of 3.09% for first year of policy and 1.545% after that.
Key Features of New Jeevan Anand policy:
Parameters of LIC NEW JEEVAN ANAND Plan:
1) AGE limit:
i) Minimum age : 18 years
ii) Maximum age: 50 years
2) Sum Assured
i) Minimum SUM ASSURED: Rs. 1, 00, 000/-
ii) Maximum SUM ASSURED: No Limit
3) New Jeevan Anand Policy Term:
i) Minimum Term :15 years
ii) Maximum Term : 35 years
4) Premium Paying Mode:
i) Monthly (SSS, ECS), Quarterly, Half yearly, Yearly
Benefits offered in LIC New Jeevan Anand:
Maturity Benefit- Policy Holder will be paid Sum Assured + Simple Reversionary Bonus + final additional bonus if any.
(a) Premium Tax Benefits: Yes, under section 80C
(b) Maturity Amount Tax Benefits: Yes, under section 10(10D)
(c) Death Benefits Tax: Yes, under section 10(10D)
Death Benefit:- It is an attractive benefits comes with the New Jeevan Anand policy. In this, if the policy holder dies within the term of Policy then Nominee will be given the Death Benefit (i.e. Sum Assured on Death) plus the Simple Reversionary Bonus (SRB) plus FAB (final additional bonus).
Income Tax Benefit – the New Jeevan Anand Policy plan also offers Income Tax Benefits under Section 80 C for premiums and Section 10 for Maturity returns.
Loan on Policy – the policy holder can also apply for the loan after payment of 3 full year premium.
Housing Loan Surity – HLS is also available with the cover of New Jeevan Anand policy plan.
Rebates offered in New Jeevan Anand Policy:
Various tax rebates are offered in the policy plan for the benefit of the policy holder. Check the following tax rebates for more details.
Mode of Rebate:-
Rebate (if Sum Assured):
Date of risk Commencement:- In case of children holding the age less than 8 years, the date of risk commencement starts either from achieving 8 years of age or from 2 years of taking the policy.
Other details of New Jeevan Anand policy plan:
New Jeevan Anand Policy bond:
The policy bond is a legal document that is given after the acceptance of proposal for insurance. The risk coverage starts after the acceptance of the proposal and conditions and privileges of policy mentioned in the New Jeevan Anand policy bond. It is an important document referred for/ to the various servicing interactions with the policy holder. So, one should keep the policy bond safe. It will be needed at time of settlement that is claimed on the policy. The policy bond is also required if you are applying for a loan. All policy holder are advised to inform their Parents/spouse/ Children about where the policy is kept. In case if you are handing over your policy bond to anyone weather person or in an office, please take a written acknowledgement for the same and keep a Xerox copy of the policy for reference.
As per the latest IRDA norms LIC of India has launched a new policy plan “New Jeevan Nidhi Plan” in the Deferred Pension Plans category. New Jeevan Nidhi is a non-ulip pension plan offered by LIC with a combination of various protection and saving features. This article will help you to know more about this new policy plan, so read it carefully before investing in the plan.
New Jeevan Nidhi policy is a pension plan that offers you the guaranteed Additions of Rs.50/- on per thousand Basic Sum assured for each year, for the first five years and then a Simple Reversionary Bonus declared by LIC.
LIC NEW JEEVAN NIDHI is a regular premium pension plan in which premium needs to be paid for the accumulation period. At the end of the accumulation period, the maturity comprising the sum assured, plus accused bonus and final additional bonus will be converted into a pension. After the accumulation period, the vesting period will start in which pension will be paid at regular intervals for the life insured. After the expiry of the life insured, a package will be paid to the nominee of the policy. Service Tax at the rate of 3.09% for 1st year and 1.545 % form second onwards is applicable on the premium paid for New JeevanNidhi Policy.
Salient Features of LIC New Jeevan Nidhi Plan
LIC New Jeevan Nidhi Policy Plan Benefits:
This policy plan comprise of many attractive and amazing benefits to the nominee. As we have already highlighted the key features of the LIC new Jeevan Nidhi plan. Now it’s time to focus on the benefits offered by this new policy plan launched by Life Insurance Corporation of India.
Benefit on Vesting:
Vesting the amount that is equal to the Basic Sum Assured with Guaranteed Additions, Simple Reversionary and Final Additional bonus, if any, will be made available to the Life Assured.
Guaranteed Additions: The New Jeevan Nidhi policy provides Guaranteed Additions of Rs.50/- at per thousand Sum assured for every completed year, continuously for the first five years of the policy.
Optional Benefit: Accident Benefit Rider: Accident Benefit Rider is an optional rider, which is available by payment of additional premium along with the regular premium policies. In the case of accidental death, this Benefit will be payable as package along with the death benefit with the basic plan. In case of disability arising due to accident, an amount equal to the Accident Benefit will be paid as monthly instalments for over 10 years and future premiums will be waived. If the New Jeevan Policy becomes a claim by the policy vests before the expiry of 10 years, the instalments for disability benefit which have not fallen due will be paid in a package.
The Accident Benefit may be opted for an amount upto the Basic Assured Sum. This is a subject to minimum for Rs. 25, 000 and maximum of Rs. 50 lakh. This benefit will be only available till the age of 65 years or the vesting age, whichever is earlier.
Payment of Premiums: Premiums of New Jeevan Nidhi policy can be paid regularly as per your choice at monthly, quarterly, half- yearly, or annually through the ECS or SSS mode over the policy term. Or, a single premium can also be paid.
Policy loans: There is no loan facility will be available under this plan.
Revival: If premiums are not paid within a period of policy then the policy will be lapsed. A lapsed policy can be revived from the first date of unpaid premium and before the vesting date by paying all the premiums together with interest. It is the subject of submission of satisfactory evidence for continuesinsurability. The Life Insurance Corporation reserves all the right to accept at original terms, revised terms or decline the revival to a discontinued policy. The revival for discontinued policy will take effect only after it is approved by the Corporation. It is specifically communicated to the life assured. If you opted for Accident Benefit Rider, shall be revived with the basic plan, not in isolation.
What happens if?
If the Life Assured is not satisfied by the 'Terms and Conditions' of policy, he/she may return the policy within a period of 15 days from the receipt date of the policy. On receipt of same, the Corporation shall liable to cancel the policy and will return the amount of premium deposited after deducting some expenses such as risk premium and stamp duty and expenses incurred on medical examination.