LIFE INSURANCE CORPORATION OF INDIA CENTRAL OFFICE

Transcription

1 LIFE INSURANCE CORPORATION OF INDIA CENTRAL OFFICE Dept: Actuarial/PS "Yogakshema" Jeevan Bima Marg, Mumbai Ref: Actl/2157/4 Date: 4 th March 2009 To, All HODs of Central Office, All Zonal Offices, All Divisional Offices, All Branch Offices (through D.Os) MDC, ZTCs, STCs, and Audit & Inspection Deptts. of Zonal Offices. RE: GRANT OF LOAN UNDER JEEVAN SAMRIDHI PLAN (Table Nos. 154, 155, 156 AND 157). This is further to our earlier circulars Ref: Actl/1902/4 dated 19th Sept and Ref: Actl./1928/4 dated 7/1/2004 regarding grant of loans under Money Back plans (Table Nos. 73, 74, 75 & 93) and (Table Nos. 76, 103, 106,107 & 108) respectively. It has now been decided to extend loan facility under Jeevan Samridhi plan (Table Nos.154, 155, 156 and 157) subject to the following: (1) Loan can be granted after three policy years subject to a maximum of 90% and 85% of surrender value in case of in-force and paid-up policies respectively. (2) Whenever survival benefit falls due under the policies where loan has been granted, the survival benefit amount will be adjusted first towards payment of accrued interest and repayment of outstanding loan. If any survival benefit is due within six months of taking a loan against his policy, interest for the exact period along with the amount of loan needs to be deducted from the Survival Benefit payment due to the policyholder. (3) Currently, the rate of interest to be charged on loans granted is 9 % p.a. compounding half-yearly and the same would be subject to review from time to time by the Corporation.

2 2 (4) Branch offices should be vigilant to ensure that foreclosure action is taken where two half-yearly instalments of loan interest (excluding instalment for the broken period) on the loan granted have not been paid and the policy is in paid-up condition. Foreclosure action must be initiated in such cases in the same way as it is done for loans granted under policies issued under other plans of the Corporation. However, the policies which are in force for the full sum assured should not be foreclosed even if there is a continuous default in payment of loan interest. The Policyholder should be informed before initiating any foreclosure action against a policy. (5) All existing policyholders of Jeevan Samridhi plan ( Table Nos. 154,155,156 & 157) should be informed about the facility of loan under their policies as per the draft enclosed. (6) An endorsement, as given in the Annexure, shall be required to be enclosed to the said letter with a request to the policyholder to keep the same attached to the policy bond and treat the existing para on Loans under the heading Conditions and Privileges Within Referred To of the policy document as cancelled. Policyholders seeking loans under Jeevan Samridhi policies should also be asked to execute a letter of agreement as per the format Form No 3599 B (Revised) enclosed. Please note that all other terms and conditions under Jeevan Samridhi plan will remain unchanged. This circular comes into force with immediate effect. Secretary I/c (Actuarial)

3 Life Insurance Corporation of India Branch. Ref No: Date: To, Sri/Smt. Dear Sir/Madam, Re: Availability of loan under your Jeevan Samridhi Policy No.. We are pleased to inform you that loan facility shall now be available under your above mentioned Jeevan Samridhi Policy after completion of three policy years and after atleast three full years premiums have been paid under the policy. We are enclosing an endorsement to this effect which shall replace the existing clause: Loans : No loan will be granted under this policy. We would request you to keep this endorsement attached to your policy bond. Thanking you, Yours faithfully Sr./Branch Manager Encl: Endorsement.

4 Annexure Endorsement Notwithstanding anything mentioned to the contrary, it is hereby declared and agreed that loans shall be granted under this policy provided atleast three full years premiums are paid and three policy years have elapsed from date of commencement. Loan will be granted within the surrender value of the policy subject to the following terms and conditions and on such further terms and conditions as the Corporation may fix from time to time and subject to production of satisfactory title: 1. The policy shall be assigned absolutely to and held by the Corporation as security for repayment of advance(s) and of the interest thereon. 2. Interest on the advance(s) shall be paid compounding half-yearly to the Corporation at the rate to be specified by the Corporation when the relative advance is made. The first payment of interest to be made on the next Policy anniversary or on the date six months before the next policy anniversary, whichever immediately follows the date on which the relative advance is made and every half-year thereafter. In case the loan is repaid within six months, a minimum interest for a period of six months will be charged. However, if the interest for the period of six months is more than Rs. 2000, an interest for a minimum period of two months or for the actual term of the loan or Rs 2000, whichever is higher, will be charged. 3. The Corporation shall be entitled to recall for repayment of the advance(s) with all due interest by giving three months notice. In the event of failure to repay the advance(s) when required or to pay the interest on the due dates as herein above mentioned or within 30 days after each due date respectively, the policy shall be held, without the necessity of any notice being given, to be forfeited to the Corporation and the Corporation shall be entitled to apply the surrender value allowable in respect of the policy in payment of the advance(s) and interest. 4. In case the policy shall mature or become a claim by death or is surrendered, the Corporation shall become entitled to deduct the amount of the outstanding advances together with all interest due thereon from the policy moneys. 5. Whenever survival benefit falls due under the policy where loan has been allowed, the survival benefit amount will be used first towards payment of accrued interest and repayment of loan outstanding, in that order. Date : Place: Sr/ Branch Manager

5 Form No 3599 B (Revised) Form of letter of agreement (Loan under Jeevan Samridhi Plan) Sr/Branch Manager Life Insurance Corporation of India, Branch No,. Date: Dear Sir, Re: Loan under Policy no. With reference to my application dated for a loan under the above policy which has been issued under Jeevan Samridhi plan (Table No: 154/155/156/157), I hereby agree that in the event of a claim arising under the above mentioned policy which may either be periodical survival benefits, maturity claim or a death claim, the Corporation may adjust the instalment of Sum Assured then payable towards payment of the accrued interest and the repayment of loan outstanding, if any. However, if any balance of the aforesaid instalment of Sum Assured is available after the entire accrued interest and loan outstanding is liquidated by such adjustment, such balance should be payable to me or to my nominee Sri/Smt in the event of my death, as the case may be. Yours faithfully, (Signature ) Name: Address : Contact No: address :