Various LIC Policy And Its

Clauses
MAHESH K S
4VP19MBA23
New Bima Gold Policy
a) Name and address of the life assured:
Mrs. S
w/o Mr. N , Kumbala House
P.o Kumbala
671321

b) Policy number :
8047887890
c) Date of commencement of policy:
20/11/2015
d) Nominee under the section 39 of the insurance Act.
Mr. N
e) Premium paying term: 25 years
f) Extended term: 10 years
g) Sum assured under the basic plan: Rs. 1,00,000
h) Extended term cover benefit: Rs. 50,000

i) Accident benefit rider sum assured: Rs. 50,000

j) Installment premium for basic plan: Rs. 2276

k) Installment accident benefit raider premium: 25,000

l) Total installment premium: Rs. 2266

m) Due date of payment of last premium: 20/05/2040

n) Date of expiry of policy term: 20/11/2040

Clauses of policy

1) Payment of Premiums:
A grace period of one month but not less than 30 days is allowed where the mode of
payment is yearly, half-yearly or quarterly and 15 days for monthly payments. If death
occurs within this period, the life assured is covered for full sum assured.
2) Non-forfeiture regulations: 
If the policy has run for atleast 3 full years and subsequent premiums have not been
paid the policy shall not be void but the sum assured will be reduced to a sum which
will bear the same ratio as to the number of premiums paid bear to the total number of
premiums payable.The concessions regarding claim in the above case is explained in
the appropriate section.
3) Forfeiture in certain events:
In case of untrue or incorrect statement contained in the proposal, personal statement,
declaration and connected documents or any material information with held, subject to
the provision of Section 45 of the Insurance Act 1938, wherever applicable, the policy
shall be declared void and all claims to any benefits in virtue thereof shall cease.
4) Suicide:
The policy shall be void, if the Life Assured commits suicide (whether sane or insane at
the time) at any time or after the date on which the risk under the policy has commenced
but before the expiry of one year from the date of commencement of the policy.

5) Guaranteed Surrender Value: 

After payment of premiums for at least three years, the Surrender Value allowed under the
policy is equal to 30% of the total premiums paid excluding premiums for the 1st year and
all extra premiums.

6) Salary Saving Scheme:

The rate of installment premium shown in the schedule of the policy will remain constant
as long as the employee continues with the employer given in the proposal. On leaving the
employment of said employer the policyholder should intimate the Corporation. In case of
the Salary Saving Scheme being withdrawn by the said employer, the Corporation will
intimate the same to the policyholder. Thereafter the 5% rebate given under Salary Saving
Scheme will be withdrawn.
7) Alterations:
After the policy is issued, the policyholder in a number of cases finds the terms not suitable to him
and desires to change them. LIC allows certain types of alterations during the lifetime of the policy.
However, no alteration is permitted within one year of the commencement of the policy with some
exceptions. The following alterations are allowed.
• Alteration in class or term.
• Reduction in the Sum Assured
• Alteration in the mode of payment of premiums
• Removal of an extra premium
• Alteration from without profit plan to with profit plan
• Alternation in name
• Correction in policies
• Settlement option of payment of sum assured by installments
• Grant of accident benefit
• Grant of premium waiver benefit under CDA policies
• Alteration in currency and place of payment of policy monies
• A fee for the change or alteration in the policy is charged by the Corporation called quotation fee
and no additional fee is charged for giving effect to the alteration.
8) Duplicate Policy:
A duplicate policy confers on its owner the same rights and privileges as the original policy. The
following are the requirements for issuing a duplicate policy:

1. Insertion of an advertisement at the policyholder’s cost in one English daily newspaper

having wide circulation in the State where the loss is reported to have occurred. A copy of the
Newspaper in which the advertisement appeared should be sent to the servicing office one
month after its appearance. If no objection has been lodged with LIC regarding the policy in
question, a duplicate policy will be issued after complying further requirements, i.e., Indemnity
Bond and payment of charges for preparing duplicate policy and stamp fee. 
2. However, the requirement of advertisement and Indemnity Bond may be dispensed with or
modified in certain circumstances as given below :

• loss of policy by theft

• destruction of policy by fire
• loss of policy while in custody of an office of government
• mutilated or damaged policy
• policy in torn and a part of it is missing
• policy partially destroyed by white ants
9) Age Proof accepted by LIC:
The Proofs of age, which are generally acceptable to the Corporation, are as under:
• Certified extract from Municipal or other records made at the time of birth.
• Certificate of Baptism or certified extract from family Bible if it contains age or date of birth.
• Certified extract from School or College if age or date of birth is stated therein.
• Certified extract from Service Register in case of Govt. employees and employees of Quasi-Govt.
institutions including Public Limited Companies and Pass port issued by the Pass port Authorities in India.
10) Alternative Age Proofs which are accepted:
• Marriage certificate in the case of Roman Catholics issued by Roman Catholic Church.
• Certified extracts from the Service Registers of Commercial Institutions or Industrial Undertakings
provided it is specifically mentioned in such extracts that conclusive evidence of age was produced at the
time of recruitment of the employee. 
• Certificate of Birth granted by Syedna v. Molana Badruddin Sahib of Baroda 
• Identity Cards issued by Defence Department. 
• A true copy of the University Certificate or of Matriculation/Higher Secondary Education, S.S.L.
Certificate issued by a Board set up by a State/Central Government. 
• Non- standard age proof like Horoscope, Service Record where age is not verified at the time of entry,
E.S.I.S. Card, Marriage Certificate in case of Muslim Proposer, Elder’s Declaration, Self-declaration and
Certificate by Village Panchayats are accepted subject to certain rules.
11) Nomination:
The nominee is statutorily recognized as a payee who can give a valid discharge to
the Corporation for the payment of policy monies.

Nomination will be incorporated in the text of the policy at the time of its issue.
After the policy is prepared and issued and if no Nomination has been incorporated
the assured can ordinarily affect the nomination only by an endorsement on the
policy itself. A nomination made in this manner is required to be notified to the
Corporation and registered by it in its records. A nomination is not required to be
stamped
12) Assignment:
An assignment has an effect of directly transferring the rights of the transferor in
respect of the property transferred. Immediately on execution of an assignment of
the Policy of life assurance the assignor forgoes all his rights, title and interest in the
Policy to the assignee.
There are two types of assignments:

1. Conditional Assignment whereby the assignor and the assignee may agree that
on the happening of a specified event which does not depend on the will of the
assignor, the assignment will be suspended or revoked wholly or in part. 

2. Absolute Assignment whereby all the rights, title and interest which the assignor
has in the policy passes on to the assignee without reversion to the assignor or his
estate in any event.
13) Re-assignment:
Status of your policy indicates if your policy is in force or has lapsed due to non-
payment of premium. It also provides other important information with respect to
your policy, for your reference.
Concessions for claims during the lapsed period:
1. If the policyholder has paid premiums for atleast 3 full years and subsequently
discontinued paying premiums, and in the event of death of the life assured within
six months from the due date of the first unpaid premium, the policy money will be
paid in full after deduction of the unpaid premiums, with interest upto date of the
death. 

2. If the policyholder has paid premiums for atleast 5 full years and subsequently
discontinued paying premiums and in the event of death of the life assured within
12 months from the due date of first unpaid premium, the policy money will be paid
in full after deducting the unpaid premiums, with interest upto date of the death. 
14) Revivals:
If the premium under a policy is not paid within the days of grace the policy lapses.
Revival is a fresh contract wherein the insurer can impose fresh terms and
conditions. A policy can be revived under the following types of revival:

1. Ordinary Revival 
If a revival of the policy is effected within 6 months from the due of first unpaid
premium no personal statement regarding health is required and the policy is
revived on collection of delayed premium plus interest. The rate of interest to be
charged for such delayed premium will depend on the date of commencement of the
policy.
2. Revival on non-medical basis 
For revival of the policy on non-medical basis the amount to be revived should not
exceed the prescribed limit for non-medical assurance taken by the life assured.
3. Revival on medical basis 
If a policy cannot be revived under ordinary revival or revival on non-medical basis
it can be revived with medical requirements. The medical requirements will depend
upon the amount to be revived.
15) Policy Loans:

The Corporation can grant a loan to the policyholder against his policy as per the
terms and conditions applicable to the policy. The requirements for granting a loan
are as under :

a) Application for loan with an endorsement of terms and conditions of the loan
being placed on the policy.
b) Policy to be assigned absolutely in favour of the Corporation 

c) A receipt for the loan amount

The maximum loan amount available under the policy is 90% of the Surrender
Value of the policy (85% in case of paid up policies) including cash value of bonus.
16) Claims settlement procedure:
The settlement of claims is a very important aspect of service to the policyholders.
Hence, the Corporation has laid great emphasis on expeditious settlement of
Maturity as well as Death Claims.

The procedure for settlement of maturity and death claims is detailed below :
Maturity Claims:
1) In case of Endowment type of Policies, amount is payable at the end of the policy
period. The Branch Office which services the policy sends out a letter informing the
date on which the policy monies are payable to the policyholder at least two months
before the due date of payment. The policyholder is requested to return the
Discharge Form duly completed along with the Policy Document. On receipt of
these two documents post dated cheque is sent by post so as to reach the
policyholder before the due date. 
2) Some Plans like Money Back Policies provide for periodical payments to the
policyholders provided premium due under the policies are paid up to the
anniversary due for Survival Benefit. In these cases where amount payable is less
than up to Rs.60,000/-, cheques are released without calling for the Discharge
Receipt or Policy Document. However, in case of higher amounts these two
requirements are insisted upon.

Death Claims:
The death claim amount is payable in case of policies where premiums are paid up-
to-date or where the death occurs within the days of grace. On receipt of intimation
of death of the Life Assured the Branch Office calls for the following requirements:
a) Claim form A – Claimant’s Statement giving details of the deceased and the
claimant. 

b) Certified extract from Death Register 

c) Documentary proof of age, if age is not admitted 

d) Evidence of title to the deceased’s estate if the policy is not nominated, assigned
or 
issued under M.W.P. Act. 

e) Original Policy Document 

Double Accident Benefit Claims:

Double Accident Benefit is provided as an inject to the life insurance cover. For this
purpose an extra premium of Rs.1/- per Rs.1000/- S.A is charged. For claiming the
benefits under the Accident Benefit the claimant has to produce the proof to the
satisfaction of the Corporation that the accident is defined as per the policy
conditions. Normally for claiming this benefit documents like FIR, Post-mortem
Report are insisted upon.
Disability Benefit Claims:
Disability benefit claims consist of waiver of future premiums under the policy and
extended disability benefit consisting in addition of a monthly benefit payment as
per policy conditions. The essential condition for claiming this benefit is that the
disability is total and permanent so as to preclude him from earning any
wage/compensation or profit as a result of the accident 
Claims Review Committees:
The Corporation settles a large number of Death Claims every year. Only in case of
fraudulent suppression of material information is the liability repudiated. This is to
ensure that claims are not paid to fraudulent persons at the cost of honest
policyholders.
THANK YOU