 Broadly insurance can be classified in two categories: First - Life Insurance which matures in event of death of the insured/policyholder. On occurrence of such an event the insurance company pays a sum of money assured to the nominee/beneficiary (person nominated by the policyholder). Life Insurances are of two types: Traditional Plans - which contain Endowment Plan , Cash Back Plan, Term Plan , (Term Life Insurance) and Whole life policy. And Unit-linked Insurance Plans - are of 4 types - Endowment cum Ulips, Children Plan , Retirement Plan or Pension plan and investment/saving plans. Second - General insurance. All insurance policies other than life insurance policies come under general insurance segmentation. (Also known as non-life insurance policies). These policies include Home Insurance, Auto Insurance, Travel Insurance, Marine Insurance, Theft Insurance, Office insurance and Health insurance Health insurance is most acquired policy in general insurance segment. Health insurances are of 3 types - Comprehensive Plan - which include Mediclaim and Fixed benefits plan, Accidental Insurance and Critical Care plan . |
Life Insurance Corporation has launched a new single premium scheme, Jeevan Astha, to provide a guaranteed minimum compounded annual
return of 7.71% for 5 year period and 7.18% for 10-year period. Under the scheme, if you deposit Rs 1 lakh in the five-year scheme, you will get a minimum amount of Rs 1,45,000 and if you go for 10-year scheme, you will get Rs 2,00,000 on maturity.
In the five-year policy, the guaranteed addition will be 9% of the principal every year. That means, in five years, for every Rs 1,000 investment, Rs 90 will be added to the principal amount. In the case of 10-year policy, the guaranteed addition will be 10% of the principal every year. Therefore, the amount deposited will get doubled on maturity. Besides this, on completion of the policy term, the corporation will also pay loyalty addition, which will depend on the profitability of the scheme. If the corporation earnes substantial profit, it will distribute 95% of the amount to
LIC policy-holders . As the amount mobilized in the scheme will be invested in debt instruments like government bonds, if the interest rates remained high, the scheme may fetch loyalty addition to the policy holders.
Besides this, policy will also get an
insurance cover of six times of the amount that you will deposit on the first year and 9% of the deposited amount if you have invested in the 5-year scheme and 10% of the amount if you went for 10-year scheme. After the first year of the operation , the insurance cover will double the amount you have deposited plus the guaranteed addition for the period in which the policy remained effective. As the first year’s insurance coverage is more than five times of the premium paid, the amount invested in the scheme will also get the tax benefits.
The amount deposited in the scheme will get deducted from your taxable income . But, it will be part of the overall limit of Rs 1 lakh investments made under section 80C in the instruments like provident fund and mutual fund units. At the same time, on maturity, the entire amount will become tax free. Because of this, the pretax return of an investor whose income lies in the 30% tax bracket will be around 11%, even if he does not take the section 80C benefit. If one avail the section 80C benefit also, the return will be higher.
The scheme will remain open till January 21, 2008. A senior corporation official said that the scheme is targeting to mobilize Rs 25,000 crore. According to a source, on the first day of the launch of the scheme, the corporation raised over Rs 50 crore. As the investments in stock market and realty are not fetching good return, the scheme is getting good response and the official said that the corporation is hopeful of mobilizing the targeted amount. '
