GST Rates (Service Tax) On LIC Policy

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https://wwwlicagent.blogspot.in/


Goods and Services Tax or GST has come into effect from July 1st, 2017 earlier GST on LIC Policy in the form of Service Tax .GST is a biggest tax reform in India history .It impact every one and all industries then How LIC can keep themselves apart from it. GST rate on LIC should be abolish,because LIC is paying huge dividends to Govt.

GST is also chargeable on the Interest Charged for Delayed Premium that late fees .we can say now GST will be applicable on Interest charged on delayed receipt of premium.

Rate will be applicable according to the type of premium collected. Here Types of premium means Mode of premium (yearly ,half-yearly,quarterly,monthly)

If you paid LIC premium by Bank Cheque ,but for any reasons your cheque bounced

(known as CDA ) then also GST is applicable .CDA Charges will be 18%.

There are few  tax exemptions are in GST as decided by GST council

( i) Services of life insurance business provided by way of annuity under the NPS regulated by PFRDA

( ii) Services provided by IRDAI to insurers under IRDAI

(iii) Services of life insurance business provided under following schemes

  1. Janashree Bima Yojana(JBY)

  2. Aam Aadmi Bima Yojana (AABY

  3. Life micro-insurance product as approved by the Insurance Regulatory and Development Authority, having maximum amount of cover of fifty thousand rupees;

  4. Varishtha Pension Bima Yojana

  5. Pradhan Mantri Jeevan Jyoti Bima Yojana

  6. Pradhan Mantri Jan Dhan Yojana

  7. Pradhan Mantri Vaya Vanadan Yojana

  8. Any other insurance scheme of State Government as may be notified by Government of India on recommendation of GSTC

New RATE Of GST on LIC POLICIES


 

 

PLANS
of LIC

 

Earlier
service tax

 

New
Rates w.e.f. 1.7.2017

 

Term & Health Products and ULIP charges

15%

18%

 

 

 

NB premium(including Single Premium) of Life and
Pension products and First year premium of Annuity products

 

3.75%

4.50%

Renewal premium

1.875%

 

2.25%

Single premium of Annuity Products

1.50%

1.80%

 

 

 

 

Surrender of LIC Insurance policy

Posted on by avinash

 LIC POLICY Surrender

If you don’t want to continue LIC policy for any reason then LIC gives you an option to surrender your Policy. There are Lock in period for 3 years in Endowment Plan and 5 years for ULIP plan. LIC policy is not allowed in LOCK in period. It does not matter of policy term but it is clear that delay in surrender gives you better amount. Normally LIC agents in Mumbai are doing all this procedure for surrender of LIC policies.

Where can you surrender your LIC policy

ü LIC parent Branch: Where you have taken your policy, you may go there and do all procedure.

ü LIC Customer Zone: LIC has opened several Customer Zone to help its customer.Here one can get any service related to LIC policies irespestive of parent branch. It is compulsory that Customer has to visit by own along with ID card.You can find Customer Zone in your locality with the help of internet.

ü LIC agent: Just do a call to LIC agent,he will do all documentation of behalf of you.

Documents Require To surrender LIC Policy

Ø Original Policy Paper (Bond Paper)

Ø  Surrender Form (No.5074)Surrender Value(Form No.5704)

Here and take the printout

Ø Your Bank cancelled cheque (your name should be printed on cheque)

If Your Name is not printed on cheque or you don’t have Cheque Book then

 Submit bank passbook photocopy.

Ø NEFT form :Fill all bank details , so that amount will go directly to you.

Ø Aaadhar Card and PAN card self attested zerox copy

Ø One questionnaire form also should be fill in LIC office.

How to Calculate Surrender Amount?

The exact value will be conveyed to you through servicing branch or you can also collect it through SMS/LIC customer care.but  you can also calculate it by own.

{(Total Premium Paid in years/total premium Payable years)X Sum Assured } + Accrued Bonus } X Surrender Factor

 Suppose Mr A has take a policy of rs 30 Lac for 30 years  terms. Now Having paid for 10 years , Mr A wants to surrender it.

{(10/30) X 30 lac} + Bonus } LIC surrender Factor}

 

Note:Once you submit the all necessary documents, then wait for 5-10 days they transfer the fund to your bank account.

 

If you plan to surrender your endowment policy, bear in mind all the money you have paid that you may never get back.

What is Riders in LIC Policies

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Insurance rider is a kind of add-on benefits to the primary policy, which offers extra benefits with a bit extra premium over the policy subject to certain condition.On such way to maximize the policy benefits on your LIC policy and You may customize it to suit your specific needs is by opting for rider. 

So Rider is for extra benefits with extra cost. But extra premium will not affect Maturity.
Suppose i took DAB (double accidental benefit ) rider alongwith my LIC policy, If i die due to accident then my family will get double of sum assured.

Types of RIDERS in LIC

1.PWB (Premium waiver benefit)

2.A.B(Accidental Benefits)

3.A.D& D.B (Accidental Benefits and Disability benefits)

4. T.R.(Term rider)

5. C.I.R (Critical illness Rider)

1.PWB (Premium waiver benefit)

PLANS available for PWB: 832, 834 & 848.

  • If father/mother take policies for child they can take pwb rider, in this rider if proposer dies then next premium will be waived.
  • It can be included at time of INCEPTION or LATER (atleast min 5 years ppt/term must be left before Date Of Maturity (DOM)
  • The death of the proposer must be before the completion of 18 yrs of age.
  • All the future premiums will be waived till Prem Paying Term/Policy Term.

2) A.B(Accident Death Benefit)

  • Plans numbers available for this Riders are 827, 835, 843, 844 (845, 847, 848).
  • It covers Accidental death before the DOM or 70 yrs of age.
  • For plans in the bracket till ppt only.

3. A.D.& D.B(Accidental Death & Disability Benefit)

Plans available for this Riders are 814, 815, 820, 821, 830, 833, 836, 838, 845, 846, 847 & 848.

  • AD & DB covers both Accidental death and disability due to Accident.
  • Disability means due to any of the 4 out of 6 activities couldn’t be performed mention below.

1) Dressing
2) Feeding
3) Washing
4) Toileting
5) Mobility
6) Transfering

Benefits of Disability riders

1) Waiver of future premiums
2) AB sum assured divided by 120 and payable mly for 10 yrs
3) SB if any payable
4) Maturity benefits payable.
If Death occurs before Maturity Death Claim also payable.

4) T.R(Term Rider) benefits

Plans available for this Riders are: 814, 815, 820, 821, 830, 833, 836, 845, 847 & 848..

  • An Additional S. A is payable on Death of the P.H before maturity by any way.

5) C.I.R(Critical Illness Rider)

  • Plans available for this Riders are: 814, 815, 820, 821, 830, 836, 838, 845, 847 & 848.
  • On the 1st diagnosis of any of the 15 diseases mentioned in the circular dt 19.12.2016 N.B Dept. The CIR S.A is payable to the PH ON survival after 30 days of the Diagnosis.
  • Min. 1 lakh
  • Max. S.A. Overall limit 25 lakhs per person.

(If we take Cancer Cover plan this benefit is upto 50 lacs.)

 

NEFT FORM FOR LIC

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NEFT (National Electronic Fund Transfer) is a compulsory form when you are taking LOAN , Surrender previous policy , Maturity of Your LIC policies etc. LIC transect of money only through NEFT to customers. Its a National wide system to transfer a Fund as per RBI guidelines.

How to fill NEFT form

Mention all policies numbers in the form .

Put bank details where You want Your money should come

Like

  1. Bank name
  2. Bank branch address
  3. Account types: saving/current
  4. Bank account no
  5. IFS CODE
  6. MOBILE NO
  7. EMAIL ID

Enclosed paper alongwith NACH

Cancelled cheque YOUR should be printed

OR

BANK PASSBOOK XEROX

PAN card zerox

Advantage of submitting NACH

Once you submit NEFT, LIC will never demand again for further transactions. No any extra charge made by LIC. Each payments from LIC through NEFT will create one unique transaction reference.

Where to submit NEFT Details

Servicing LIC branch : address is prescribed to policy BOND paper.

Customer zone: LIC has customer zone at different locations at several place. You may find customer zone near by to you.

Through EMAIL : you can mail with attachments of NEFT and cancelled cheque and PAN.

LIC term insurance is costlier than others

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Insurance Premium of term insurance plan of LIC is very costly than other insurer in India. What would be the reason?If 30yrs old person gets term insurance than Yearly premium would be rs 19000 for 1cr sum assured policy even though private insurer charge approx 10 to 11k only.
Few reasons to ponder prior to take LIC term insurance:

LIC CLAIM RATIO: LIC CLAIM statement is the highest in the world Its 98.3% as per IRDA data. We all know LIC has huge customers but maintaining greatest CLAIM RATIO .

Government’s backing: LIC is paying huge dividends to government from its Yearly profit . On the contrary Government provides sovereign Guarantee on each policies . Which is not available in PRIVATE INSURER.

Mortality Rate: it is basic ingredient to calculate premium of any policies . But we know that mortality Rate is common for all insurer. Private company must not reduce it. Even though longevity of every citizen has been increased and on an average people living 72 years normally.Which is common for all insurance company

Admin Charge: LIC has the lowest administration charge amongst almost all insurers. Salary of LIC staff,Offices and all other expenditure is very less in LIC.It is visible to all.

Note: The only reason for high premium of its Guaranteed CLAIM payments. One can take online term insurance from LIC with reduced premium.

Methods to pay LIC PREMIUM

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LIC OFFICE: One can pay LIC PREMIUM at LIC office by cheque or cash. It is very traditional method.

LIC’s PREMIUM POINT: LIC has opened some premium points to collect premium. It may be near to Your house. LIC agents and LIC DEVELOPMENT OFFICER can open premium points to collect premium.

Banks: Whether you are playing in Yearly/half yearly/Quarterly/monthly mode, you can pay by NACH from banks.

Online payments: LIC has given facilities to pay premium online by Debit/credit card or net banking. There are two option on LIC site , one is to register and pay ,and second option is to pay directly. Having paid premium, you will get receipt through email.

Pay tm:Now you can pay your LIC insurance premium through PayTM app also.You have to select insurer and then put in policy number. After submitting the details u can see the basic details and u can verify and proceed. Receipt will be downloaded in your phone/profile.

WHY To Get LIC PLAN in Yearly Payment mode premium

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There are five modes of PREMIUM payments available  for LIC insurance plan like Yearly,half yearly, Quarterly, monthly and single premium. Why should we select yearly MODE of LIC insurance plan?  It will give few additional benefits. One can make their payment as they want. but if we pay premium for LIC plan in yearly mode in the month of March then we will have some benefits.

Suppose  we select date-backing of my LIC PLAN to April, age reduces & Prem every year reduces, in 15-20 years, this Rs _________ is the total Difference in Prem, with Yly premium MODE, there is every year discount of 2%, total discount in 15-20 years would be Rs ___.

  • By back-dating, I shall get you extra 6% on Maturity Value of 25-50 Lacs, how ?

  • By Getting Maturity 1 year earlier, that AMT can be invested in Bank FDs,

    FD would earn 6% Interest,

  • By back-dating, OUR loan, in case of emergency, would get due early, 2 years instead of 3,

  • By back-dating, our loan amt increases, Because of more Premium, more bonus & more loan,

  •  By back-dating, In case of death, more death benefit coz of more bonus,

  • By Back-dating, In case of Money Back plan, every SB 1 year earlier,

In case of Umang, 3’Extra Benefits –

(I) 1 SB Extra,

(II) 1 Bonus Extra (after PPT),

(III)Higher FAB ( 1 year higher Term),

Some plan may be available only now by dating back to April because of higher age.

HNI Clients buy Life Insurance:EVEN IF THEY DON’T NEED IT !

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Now why do they buy it then? (The Million Dollar Question)
 
  1. Liquidity:  A lot of wealthy families are “Asset Rich” but liquid poor. The Life Insurance policy becomes a quick tool to create liquidity when any key person in the family passes away to ensure Hard Assets are not liquidated in a “Fire Sale”. It also protects the reputation of the family
  1. Income Replacement: AND I get this question asked a lot…  But don’t the Super Rich have passive incomes and established businesses?? Well they do, But when the primary breadwinner passes away, these income sources may start to dry up, so the Life Insurance provides a quick buffer to help stabilize the income flow. 
  1. Wealth Transfer: We all work very hard to build HARD Assets; It is essential that these HARD Assets are transferred to the next generation without loosing value. Taxes, Transfer fees, Probate costs, Lawyers, Trusts, Foundations, the more complex the structure the more fees the estate has to pay. Life Insurance ensures those payments are made without touching any of the assets in the estate. Hence ensuring full Wealth Transfer.
  1. Hedge against the Future: But don’t the SUPER RICH already have a secured future? Well just like a car, every estate needs to have Shock-Absobers, Seat Belts and Airbags. You may be in a Rolls Royce, but you would still need the essential protections from uncertainity. Life Insurance is the Shock Absober in the Estate Value. It hedges the pot holes on the way. Life is unpredictable and so is your estate value. 
  1. Life Insurance as an Asset!! Life Insurance is not considered an expense on the Super Rich Income Statement; one of the reasons why a lot of people think the Super Rich don’t have it..It is on the Balance Sheet as an Asset. No wonder a lot of people have the Myth that Life Insurance is only for the Poor and not the Rich. Life Insurance is an option (for all the traders and accountants out there) which is always “in – the – Money” which means; it will always have value for an estate even at its worst performance. Its a Liquid Asset/Property on the Balance Sheet of the SUPER RICH

LIC Term Insurance Plan: New Anmol Jeevan And New Amulya Jeevan Plan

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LIC’s Term Insurance is a protection plan which gives only financial protection to the insured’s family in case of his/her unfortunate demise.
There are two Term Insurance Plans are in LIC of India

  • Anmol Jeevan
  • Amulya Jeevan

Eligibility Conditions And Other Restrictions for Anmol Jeevan

  • Minimum Sum Assured: Rs. 6,00,000
  • Maximum Sum Assured:  Rs. 24,00,000
  • (The Sum Assured shall be in multiples of Rs. 1, 00,000/-)
  •  Minimum age at entry   18 years (completed)
  • Maximum age at entry    : 55 years (nearest birthday)
  • Maximum cover  age     : 65 years (nearest birthday)
  • Minimum policy term : 5 years
  • Maximum policy term    : 25 year

Eligibility Conditions And Other Restrictions for Amulya Jeewan Plan

  • Minimum Sum Assured  : Rs. 25,00,000
  • Maximum Sum Assured : No uper limit
  • (The Sum Assured shall be in multiples of Rs. 1, 00,000/-)
  • Minimum age at entry         : 18 years (completed)
  • Maximum age at entry        : 60 years (nearest birthday)
  • Maximum cover  age : 70 years (nearest birthday)
  • Minimum policy term : 5 years
  • Maximum policy term   : 35 years

Features and benefits:


Death Benefit: In case of unfortunate death of the Life Assured during the policy term Sum Assured shall be payable.


Maturity Benefit: On survival to the end of the policy term, nothing shall be payable.

 

Paid -Up value– Both policy can not be Paid Up.

 

Surrender Value: No Surrender Value will be available under this plan.

Taxes: Income Tax benefits (80 c) are available 

Cooling-off period:If the Policyholder is not happy with the “Terms and Conditions” of the policy, the policy may be returned to us within 15 days from the date of receipt of the policy .


Suicide: This policy shall be void if the Life Assured (whether sane or insane) commits suicide within 12 months from the date of commencement of risk or from the date of revival, an amount equal to 80% of the premiums paid till the date of death (excluding any taxes, extra premium, if any,), provided the policy is inforce, shall be payable. The Corporation will not entertain any other claim under this policy.

Revival of Policy: If Premiums are not paid on time with in grace period then then the policy ,A lapsed policy can be revived with in the two consecutive years from the date of first unpaid premium.

 

 

Suppose A Person age 35 yrs old took this Term Insurance for 35 years
Plan Amulya jeevan (823)
Sum Assured :5000000
Premium With Tax 18.0% :

Yearly : 23128 (19600 + 3528)  Halfly : 11795 (9996 + 1799)

TERM INSURANCE FROM LIC IS COSTLY THAN OTHER INSURER, BEFORE HAVING THIS PLAN ONE MUST HAVE A LOOK CLAIM RATIO REPORT FROM IRDAI

LIC Jeewan Umang : A whole life Insurance Plan Features,Benefits and Maturity

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LIC Jeevan Umang Plan Number 845 is limited Premium ,non linked(not market linked) with profit plan .
Plan provides annual survival tax free returns from the end of Premium Payable term to till 100 years of policy holder along with risk cover. Jeevan Umang is a solution regular income with complete  protection of family.

Umang consists all three benefits that is

  • Survival benefits,
  • Death cover and
  • Maturity benefits
 
 
Survival benefits

Survival Benefit

From the end of your premium payable term you will get 8% of Sum assured amount till your 100yrs.
As for example ,if you take a Jeevan umang policy of 10 lac for 20 yrs  then after 20 yrs you will get 8% of 10 lac (Rs 80,000) till your 100 years.

Death cover

If death occurs between the date of policy taken to till 100 yrs of policy holder ,then

 Sum assure + Vested Bonus + Final addition bonus will be paid
 

Maturity Benefit

At the age of 100 yrs

Sum assure + Vested Bonus + Final addition bonus will be paid

 

 

Suppose a person age 35 years take this LIC plan for 20 years for Sum assure Rs 5 lac than after 20 years he will ge 8% of 5lac (Rs 40000) till his 99 yrs and at his age of 100 ,he will get 5 lac +Bonus + Final Addison Bonus.
In between 100 years of this policy if death occures he will ge 5 lac +bonus+ FAB

LIC Jeevan Umang Plan Features

Minimum Policy =2 lac
Minimum Age 90 days 
Maximum age 55 years
Riders available
LOAN available