Star Union Dai-ichi Life’s Prabhat Tara Plan A Unit Linked Insurance Plan Tara Plan Child ULIP Plan.pdf · Star Union Dai-ichi Life’s Prabhat Tara Plan A Unit Linked Insurance

Star Union Dai-ichi Life’s Prabhat Tara Plan A Unit Linked Insurance Plan

2008

Draft Marketing Brochure

1 In this policy, the investment risk in investment portfolio is borne by the policyholder.

“My child has big dreams for his future. I want to give him the best education available

in India and abroad. I will do whatever it takes to fulfill his aspirations”.

Securing the future and the aspirations of a Child is important responsibility of all

parents. Star Union Dai-ichi Life launches its Prabhat Tara Plan that is aimed to assist

parents in securing the future needs of their children. The risk cover is on the life of the

insuring parent (with child as the beneficiary) ensures that the parent’s objectives are

met even in the unfortunate event of his or her death during the term of the policy.

Why choose Prabhat Tara Child Plan?

a. Your regular contributions grow at attractive market returns until your child reaches

25 years of age. A sizeable lump sum would then be available for him or her to kick

off one’s independent life.

b. It is a triple benefit insurance plan providing (i) sum assured payable in the

unfortunate event of the insured parent, (ii) waiver of future premiums – company

will pay the premiums instead towards the policy which keeps the fund growing as

intended by the insuring parent, and (iii) payment of 1% of the sum assured every

month as a family income benefit.

c. Option to attach additional rider benefits viz. Accidental Death and Permanent

Disability Rider, and Critical Illness rider which make the plan more attractive.

d. The plan provides you with a flexible option to meet your changing requirements.

1. Eligibility Criteria

a) Entry Age: The insuring parent’s age must be between 19 yrs to 57 yrs (Age at

last birthday) at the time of entry into the plan while the beneficiary child’s age

must be between 0 yrs to 15 years.

b) Maximum Age at Maturity: 65 years of life assured, 25 years for child.

2. Product Features

a) Policy Term: Minimum Policy Term must be equal to; (i) 8 years or (ii) 18

years minus age of the child at entry, whichever is higher. Maximum policy

term shall not exceed 25 years.


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b) Regular Premium Payment Term: Equals 18 minus age of the child at the

time of entry calculated as on last birth day for regular premium.

c) Limited Premium Payment term is also available: 3 yrs, 5 yrs, or 7 yrs.

d) Minimum Annualized Basic Premium:

Term Min. Premium*

3 years 90,000

5 years 60,000

7 years 48,000

Up to 18 years of the child 18,000

*Higher premium in multiples of Rs.1000

e) Maximum Premium : No Limit

f) Top Up Premium:

Minimum Top Up Rs.5000

Maximum Top Up

(cumulative)

25% of the basic premium

paid till date of the top-up

The Life cover Sum Assured will be exclusive of

any top-ups made

g) Sum Assured:

Minimum Sum Assured 5 times the basic premium

Maximum Sum Assured 25 times the basic premium

Changes in the Sum Assured allowed at each policy anniversary date starting from 3rd policy anniversary

3. Policy Benefits

a) Death of the Insured Parent: In the unfortunate event of death of the Life assured

during the term of the policy, the death benefit payable is as under

Basic Sum Assured is payable immediately to the nominee.

Waiver of future premiums up to age 18.

Rider benefit, if any, is also payable

Monthly Income Benefit: An amount equal to is 1% of the Basic Sum Assured will be payable every month. The first payment will be made at the end of the month following the death of the Life Assured and will cease at the end of the policy term.


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Benefits are payable after deducting the mortality/PPWB/ Monthly Income Benefit/ rider charges due but not paid for the entire policy year in which death occurs.

Future regular basic premiums scheduled after date of death will be waived.

Other policy benefits continue as per the original plan schedule.

b) Maturity Benefit: Maturity Benefit is payable on survival of the insured parent up to

the date of maturity.

On the maturity of the policy the fund value will be paid to the policy holder/beneficiary and the contract ceases to exist.

The maturity benefits may be paid in one lump sum at the time of maturity or as per settlement options.

If one of the settlement options is chosen, then the fund value will remain invested in the existing funds. During the settlement period, the investment risk in the investment portfolio is borne by the Life Assured/Assignee, as the case may be. In case of death during settlement period: Balance Fund Value is payable to the nominee.

Payments will be received by the Life Assured/Assignee, as the case may be, in the form of yearly, half-yearly, quarterly or monthly instalments. Half-yearly, Quarterly and Monthly modes are available only through ECS credit

4. Risk Commencement Date: The risk commences on the date later of (1) underwriting acceptance of the proposal; (2) the date of its clearance of cheque/draft for proposal deposit payment.

5. Guaranteed Additions: Applicable in respect of all single as well as limitedand regular

premium policies with terms 15 years and above; such policies are eligible for guaranteed additions at the end of 5th, 10th, 15th 20th and 25th policy year by the way of free allocation of units. The policy must have been in full force as on the date of respective policy anniversary with all the premiums due having been paid up to date.

6. Surrender Benefit: The policy will acquire surrender value after at least one full year’s

premiums are paid. However, the surrender value will be payable only after completion of 3 years. It is important to note that no surrender benefit is available for life cover and riders and hence surrender is applicable only to the Fund value.

7. Partial Withdrawal Benefit: Partial withdrawal is allowed from the 4th policy year onwards subject to certain conditions. Partial withdrawal is not allowed during the first three years of the policy. Partial withdrawals are subject to certain conditions. Please also refer to the section under “Investment of Funds”.

8. Rider Benefits: The following rider benefits are available during the term of the policy, provided they are opted by the policyholder at the time of joining the basic policy; the riders cannot be attached at a later stage. Once a rider benefit is paid all the attached riders will terminate and only the base policy will continue.


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a) Accidental Death cum Accidental Total & Permanent Disability Rider:

In the unfortunate event of the life assured dying due to an accident before completing 65

years of age, or during the contract period under this rider whichever is earlier, an additional

amount equivalent to the basic sum assured (subject to the maximum of Rs.50 lakhs

under all policies issued by SUD Life is payable.

In the unfortunate event of the life assured suffering from Total & Permanent Disability due to

accident, before completing 65 years of age or during the contract period under this rider

whichever is earlier, the Life Assured will be paid the Sum Assured under this rider in 10 equal

half yearly instalments and the Life Assured exits all other riders.

b) Critical Illness Rider: In the unfortunate event of the life assured suffering from any of the diseases listed in the policy or undergoing any of the surgeries listed in the policy, before completing 60 years of age or during the contract period under this rider whichever is

earlier, an amount equivalent to the 50% of the basic sum assured at the inception of the

policy becomes payable subject to certain terms and conditions.

Rider Features Accidental Death & PDB Critical Illness

Minimum Age at entry 19 19

Maximum Age at Entry 60 55

Age at maturity 65 60

Minimum Term 5 5

Maximum Term Term of Basic cover /65 years of Term of Basic cover/65 years

of age, whichever is earlier

Term of Basic cover/60 years

of age, whichever is earlier

Minimum Sum

Assured Rs.50,000 Rs.10,000

Maximum Sum

Assured (subject to

overall ceiling)

Basic SA at inception subject

to an overall ceiling of Rs.50

lakhs.(under all SUD Life

Policies).

50% of Basic SA at inception

subject to an overall ceiling of

Rs.20 lakhs (under all SUD

Life Policies).

Overall ceiling across

all Individual products Rs.50 lakhs Rs.20 lakhs

9. Top Up Facility: Top-up premiums are allowed at any point in time during the policy term, subject to minimum of Rs.5000 (and upward, in multiples of Rs.1000). However the cumulative top-ups during the term of the policy are limited to 25% of the single premium or cumulative regular premium paid as on the date of Top-up. Top-ups will go entirely for savings and will not impact the amount of the Life cover sum assured.

10. Policy Loan: No loan provision will be granted by the Company against this policy.

11. Option to Vary the Sum Assured: Available from the 4th policy year. This option can be exercised only 3 times during the policy term subject to certain terms and conditions.

12. Option to Vary the Premium: Available subject to certain terms and conditions. The increase in regular premium will automatically impact the life cover. Hence, mortality charges will be re-calculated as per new risk cover.


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Grace Period & Discontinuance of Premiums:

Grace Period: A grace period of 30 days is allowed for payment of quarterly/half-yearly and yearly premiums, and a 15 days for monthly premium options. After the grace period, the status of the policy will depend if first unpaid premiums pertain to the first three policy years or to the fourth and subsequent year.

Unpaid premium pertains to the first three policy years:

(a) If the premiums are not paid within the grace period, the life cover, PPWB, Monthly Income Benefit and rider covers cease or lapse immediately and future mortality, PPWB, monthly income benefit and rider charges will not be deducted.

(b) Fund Management Charges and Policy Administration charges continue to be deducted. No new premium or top up premium shall be accepted. Only revival facility is available.

(c) Partial Withdrawal/Switch facility is not available; Surrender allowed if first year premium has been paid.

(d) If not revived within the revival period, (within 3 years from the first unpaid premium) Surrender Value, if any is paid after deduction of the applicable surrender charges to the policyholder and the policy is terminated.

Unpaid premium pertains to the fourth or subsequent policy year:

i. Automatic Life Cover, PPWB, Family Income benefit and rider covers continue till the end of the revival period (3 years from the first unpaid premium) subject to (ii) below and all charges such as mortality charges, rider charges, if any, Fund Management Charge and Policy Administration Charge continue to be deducted. No new premium or top up shall be accepted. Only revival facility is available.

ii. However if the Fund Value reaches an amount equivalent to one full year’s premium plus applicable surrender charges before the end of the revival period, the policy ceases immediately and Fund value is payable.

iii. Partial withdrawal and Surrender are allowed; Switch facility is not allowed. No new premium or top up will be available.

iv. If the policy has not been revived before the end of the revival period, the policyholder has the option to either: a. Obtain the Surrender value immediately, or b. Request for continuance of the policy with the life cover and rider cover, if any. The

policy will continue either till the date of maturity or till the Fund Value reaches a minimum of one full year’s premium and surrender charges, if any, whichever is earlier. However no further premiums would be accepted during this period. No new premium or Top Up payment shall be accepted during the discontinuance period.

c. in both the cases mentioned in (ii) above, the company will pay the Fund value available to the policyholder and the policy terminates. There are no extra charges for availing this facility.


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Policy Revival

The policyholder or assignee may revive the lapsed policy by making a written application within a

period of 3 years from the due date of the first unpaid premium subject to proof of continued

good health and other terms and conditions to the satisfaction of the company. However, the

decision to revive a policy will be in absolute discretion of the company.

If there are unpaid premium(s) during first three policy years and the policy is revived, then the life cover and rider cover will recommence from the date of revival of the policy and the mortality/rider charges will be collected only from the date of revival.

Unpaid basic premiums will be recovered on the revival and will be invested based on the NAV as on the date of revival.

Cost of medical expenses incurred for revival facility (if any) will be borne by the Life Assured / Assignee, as the case may be, through cancellation of units subject to maximum of Rs 3,000/-.

13. Beneficiaries under this plan:

Maturity Benefit: The policyholder/life assured under the policy would receive the proceeds on maturity date. If the policy has been assigned, the proceeds would be payable to the assignee(s) under the policy.

Death Benefits: In the unfortunate event of the life assured under the policy, the nominee will receive the proceeds due to him or her under the policy.

Nomination: The child is to be nominated under the policy and a separate Appointee must be appointed.

14. Child Substitution: In case of unfortunate event of death of the beneficiary child the

substitution/nomination is permitted.

15. Risk Commencement Date: In case of life cover policies the risk commences on the date

later of (1) underwriting acceptance of the proposal; (2) the date of its clearance of

cheque/draft for proposal deposit payment

16. Investment of Funds

This is a unit-linked product, wherein the policyholder chooses from 4 funds and remits an

annualized premium at the proposal stage. When the proposal is accepted the premium will

be adjusted for all charges, including mortality charges, rider charges, monthly income benefit

charges, premium payor benefit charges and extra-mortality charges. The balance amount

will be available for allocation amongst the four funds viz. Equity Fund, Bond Fund, Growth

Fund and Balanced Fund.

On the close of business of every business day, Star Union Dai-ichi Life will declare the Net

Asset Value (NAV) of the four funds separately. However, the rider premiums will continue to be

deducted and rider covers will continue.


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The policy holder chooses the funds and their allocation percentages. The minimum allocation

rate is 10% per fund with maximum of 100% (with no condition of multiple.) If the allocation

percentages are not specified or the percentage is less than 100%, the same will be ascertained

before allocating the premiums (regular premiums or Top-up premiums).

INVESTMENT

TYPE/ASSETS

FUND TYPE

Equity Growth Bond Balanced

Equity & Equity

Related

instruments

80-100% 40-100%

(70%)* 0

0-60%

(30%)*

Money Market

Instruments 0-20%

0-60%

(30%)*

0-20% 40-100%

(30%)* Debt Instruments 0 80-100%

Risk Profile High Medium-High Low-Medium Medium

*A Target Ratio in respect of Growth and Balanced Funds will be maintained by automatic

rebalancing of the portfolio of funds as soon as ratio deviates from the target by ±10% as

mentioned in the parentheses.

Switching:

Switching will be available at any point of time. However, the facility is not available if there

are unpaid premiums and during the settlement option after maturity. Any amount of fund or

any percentage of fund value can be switched out. While reinvesting a minimum of 10% of the

amount switched out must be reinvested in each of the selected funds. Minimum amount of

switch is Rs. 10,000 with no condition of multiple. All switches are free of cost. There are no

restrictions on the number of switches.

Premium Redirection:

The policyholder has the choice of altering the allocation percentages (redirection of funds) for future

premiums and top-up premiums starting from the second policy year onwards by giving a notice in

writing to the Company at least two months prior to the date of the premium payment. Redirection

will not affect the existing units. Redirection facility is available free of cost and is available once in a

policy year.


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Charges under the Policy

All charges are subject to revision with prior approval of IRDA a) Premium Allocation charges:

Annual Contribution

Year 1 Year 2 &3 Year 4

onwards

Up to 1,99,999 35% 10% 2%

2,00,000-4,99,999 35% 9% 2%

5,00,000-9,99,999 30% 8% 2%

10,00,000-19,99,999 25% 6% 2%

20,00,000& above 20% 5% 2%

Top-up will be charged 2% of the top up premium

b) Policy Administrative charges

Policy Administrative charges equal to Rs.50/- per month for the financial year 2008-2009 increasing by 2% per annum on the first business day of the policy month following after 1st April of each year. Policy Administrative charges are calculated on the first business day of each policy month and deducted from the Fund value by cancelling appropriate number of units of each fund. The redemption of units of each fund shall be in the same proportion as the value of units held in that fund is to the total value of units held across all funds. The units shall be redeemed at the prevailing unit price.

c) Fund management charges The annual fund management charges for each fund are as follows: Equity fund: 1.5% of the Fund value Bond fund: 1% of the Fund value Growth fund: 1.4% of the Fund value Balanced fund: 1.2% of the Fund value

These charges may be increased with prior notice to the Policyholder up to a maximum of 2% of the Fund value subject to the approval from the regulator. Fund management charges are calculated and recovered on a daily basis from Fund value.


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d) Surrender charges: No surrender benefits are payable during the first 3 policy years; the

surrender value is payable only after completion of the third policy anniversary, after deduction of the surrender charges given below:

Policy

year

Percentage of

fund value

charged

1 No Surrender

Value

2 5%

3 3%

4 2%

5-10 1%

11 onwards nil

e) Switching charges

All switches are free of cost. There are no restrictions on the number of switches.

f) Partial Withdrawal charges

First 2 withdrawals in a policy year are free of cost, subsequent withdrawals are charged @

Rs.100.00. The amount will be recovered from the withdrawal amount and not by

redemption of units.

g) Mortality Charges

Mortality charges are recovered on a monthly basis, on the first working day of the each policy month by the way of cancellation of appropriate number of units. Mortality charges are worked out in accordance with the age of the life assured and the definition of sum at risk.

h) Premium Payor Waiver Benefit (PPWB) Charges

Premium Payor Waiver Benefit charges are recovered on a monthly basis – on the 1st

working day of each policy month by the way of cancellation of appropriate number of units.

Premium Payor Waiver Benefit Charges will attract service tax.

i) Monthly Income Benefit Charges

Monthly Income Benefit charges are recovered on a monthly basis, on the 1st working day of

each policy month by the way of cancellation of appropriate number of units. Monthly

Income Benefit charges will attract service tax.

j) Rider Charges The charges for riders opted under the policy viz. Accidental Death and Accidental Total and Permanent disability rider and/or Critical Illness rider will be by the way of cancellation of


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appropriate number of units.

k) Medical examination expenses in case of increasing sum assured facility and revival: Cost

of medical expenses incurred for increasing sum assured facility and revival facility, if any

will be borne by the policy holder through cancellation of units subject to maximum of

Rs.3,000/-.

Terms & Conditions

A. UNIT Price

The unit pricing (calculation of the NAV, Net Asset Value) shall be computed as per the IRDA

guidelines – based on whether the company is purchasing (appropriation price) or selling

(expropriation price) the assets in order to meet the day to day transactions of unit allocations

and unit redemptions:

When Appropriation price is applied: The NAV of funds shall be computed as: Market value of investment held by the fund plus the expenses incurred in the purchase of the assets plus the value of any current assets plus any accrued income net of fund management charges less the value of any current liabilities less provisions, if any. This gives the net asset value of the fund. Dividing by the number of units existing at the valuation date (before any new units are allocated), gives the unit price of the fund under consideration.

When Expropriation price is applied: The NAV of funds shall be computed as: Market Value of investment held by the fund less the expenses incurred in the sale of the assets plus the value of any current assets plus any accrued income net of fund management charges less the value of any current liabilities less provisions, if any. This gives the net asset value of the fund. Dividing by the number of units existing at the valuation date (before any units are redeemed), gives the unit price of the fund under consideration.

B. Exclusions

a) Suicide Claim provisions. If the Life Assured, whether sane or insane, commits

suicide, within one year from the Date of Issue of the Policy, the Policy shall be void.

In such event, the Fund Value, shall be payable, and all benefits under the policy will

cease.

b) Exclusions under Riders:

i. Exclusions for Accidental death and total and permanent disability rider:


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STAR UNION DAI-ICHI Life shall not be liable to pay the ‘Benefits’ to the Life assured, who

opts for accidental death and TPD/ Pure Term rider, if death/TPD of life assured is caused

due to any of the following events:

a) intentional self injury, attempted suicide, insanity or immorality or whilst the Life assured is under the influence of intoxicating liquor, drug or narcotic substances;

b) injuries resulting from riots, civil commotion, rebellion, war (whether war be declared or not), invasion, hunting, mountaineering, steeple chasing or racing of any kind, bungee jumping, river rafting, scuba diving, paragliding or any such adventurous sports.

c) accident while the life assured is engaged in aviation or aeronautics in any capacity other than that of a fare paying or part paying or nonpaying passenger in any air craft which is authorized by the relevant regulation to carry such passengers & flying between established aerodromes, the life assured having at that time no duty on board the air craft or requiring descent there form

d) any breach of law by the Life assured. e) arising from employment of the life assured in the armed forces or military service of

any country at war (whether war be declared or not) or from being engaged in duties of any para-military, security, naval or police organization

ii. Exclusions for Critical Illness Rider:

STAR UNION DAI-ICHI Life shall not be liable to pay the ‘Benefits’ to the Life Assured, who

opts for critical illness rider in the following events:

a) The illnesses which are not included as critical illnesses or in respect of any of those illnesses the symptoms of which have occurred or would have been diagnosed for which the insured

person received treatment during the first six months from the date of commencement

of risk.

b) Pre existing injuries or illnesses, treatment for which is not taken from recognized hospitals or doctors.

c) The illnesses/diseases has resulted from any other illnesses/diseases for which the insured persons has previously received treatment, or which had previously been diagnosed or which he was aware of, at the commencement of the Policy or within the first six months from the date of policy.

d) be caused by intentional self injury, attempted suicide, insanity or immorality or whilst the Life Assured is under the influence of intoxicating liquor, drug or narcotic substances; or,

e) take place as a result of accident while the Life Assured is engaged in aviation or aeronautics in any capacity other than that of a fare-paying passenger in any aircraft which is authorised by the relevant regulations to carry passengers and flying between established destinations, or,


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f) be caused by injuries resulting from riots, civil commotion, rebellion, war (whether war be declared or not), invasion, hunting, mountaineering, steeplechasing or racing of any kind; or,

g) result from the Life Assured committing any breach of law. The benefit under the Critical Illness Benefit Rider will be paid only on the Life Assured

surviving 30 days from the date of diagnosis of the Critical Illness

1. Free look period:

The Policyholder has a period of 15 days from the date of the receipt of the policy document to

review the terms and conditions of the policy and where the Policyholder disagrees to any of the

terms and conditions, he/she has the option to return the policy stating the reasons for his/her

objection, when he/she shall be entitled to a refund of the amount in accordance with prevalent law.

Currently, the amount payable on free look cancellations is calculated as follows:

Fund Value + (Premium Allocation Charges + Mortality Charges, if any + Rider Charges, if any +

Policy Administration charges) already deducted MINUS (Stamp Duty + Medical expenses +

Payment Instrument Collection charges).

2. PROHIBITION OF REBATES (SECTION 41 OF INSURANCE ACT 1938)

No person shall allow or offer to allow, either directly or indirectly, as an inducement to any

person to take out or renew or continue an insurance in respect of any kind of risk relating to lives

or property in India, any rebate of the whole or part of the commission payable or any rebate of

the premium shown on the policy, nor shall any person taking out or renewing or continuing a

policy accept any rebate, except such rebate as may be allowed in accordance with the published

prospectuses or tables of the insurer:

Provided that acceptance by an insurance agent of commission in connection with a policy of life

insurance taken out by himself on his own life shall not be deemed to be acceptance of a rebate

of premium within the meaning of this sub-section if at the time of such acceptance the insurance

agent satisfies the prescribed conditions establishing that he is a bona fide insurance agent

employed by the insurer.

Any person making default in complying with the provisions of this section shall be punishable with

fine which may extend to five hundred rupees.

3. SECTION 45 OF INSURANCE ACT 1938 – INDISPUTABILITY CLAUSE

No policy of Life Insurance shall, after the expiry of two years from the date on which it was

effected, be called in question by an Insurer on the ground that a statement made in the proposal

for insurance or any report of a medical officer or referee or friend of the Insurer or in any other

document leading to the issue of the Policy, was inaccurate or false, unless the insurer shows such

statement Was on material matter or suppressed facts which it was material to disclose and that it


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was fraudulently made by the policy holder and that the policy holder knew at the time of making it

that the statement was false or that it suppressed facts which it was material to disclose.

Provided that nothing in this section shall prevent the insurer from calling for proof of age at any

time if he is entitled to do so, and no policy shall be deemed to be called in question merely because

the terms and conditions of the policy are adjusted on subsequent proof that that the age of the life

insured was incorrectly stated in the proposal.

Note: “Material” shall mean and include all important, essential and relevant information in the

context of underwriting the risk to be covered by the corporation.

4. Income Tax Benefits: As per the current laws, income tax benefits are available under Section 80C and Section 10(D) of

Income Tax Act, 1961.

ALL UNIT LINKED LIFE INSURANCE PLANS ARE DIFFERENT FROM TRADITIONAL INSURANCE

PLANS AND ARE SUBJECT TO DIFFERENT RISK FACTORS.

Star Union Dai-ichi Life Insurance Company Limited is the name of the Insurance Company and “Prabhat Tara” is

the name of this plan. Neither the name of the insurance company nor the name of the plan in anyway indicates the

quality of the plan, its future prospects or returns.

Documents

Star Union Dai-ichi Life’s Prabhat Tara Plan A Unit Linked Insurance Plan Tara Plan Child ULIP Plan.pdf · Star Union Dai-ichi Life’s Prabhat Tara Plan A Unit Linked Insurance