Plans

Life Insurance Corporation (International), a subsidiary of India’s insurance conglomerate Life Insurance Corporation (LIC) has launched an insurance plan with guaranteed returns — Jeevan Aastha 2 — for non-resident Indians (NRIs).

Jeevan Aastha offers guaranteed returns on investments for varying terms — three years, five years and ten years. “The scheme has features of both guaranteed return and insurance coverage,” V. S. Madhu, resident manager of LIC International told reporters.

“The product, which gives a guaranteed return for periods of three years, five years or ten years, depending on the customer choice.”

Madhu said LIC is launching the product at a time when the major economies are facing stagnation and markets are highly volatile. “We are also unable to predict a time horizon for a likely recovery. This is the time investors look for safe investment opportunities.”

Jeevan Aastha is designed as a close-ended single premium product, the customer needs to pay the premium only once at the beginning of the policy.

The sum assured can be a minimum of $2,500 and a maximum of up to $48,000.

The maturity benefits are sum assured, guaranteed returns and top up premium (if any). There is also a provision for loyalty addition.

Madhu added that the rate of assured return works out to 5 per cent for a three-year plan, 5.5 per cent for a five-year plan and 5.75 per cent for a ten-year plan.

Withdrawal facility
The plan has flexible features like withdrawal facility after two years with provision for availing loans if required during the term of the policy.

Depending on the customer preference, applicants can increase the insurance element or savings element in the scheme.

The applicant can keep the insurance coverage at a lower level, while keeping the saving portion at a high level and vice versa.
Madhu said the corpus fund of Jaavan Aastha 2 will be invested in debt instruments across the world, especially in government securities and corporate bonds of AAA rated companies.

Madhu also noted that his company is targeting to raise $2.5 million from Jeevan Aastha 2, which is against $600,000 mobilised under Jeevan Aastha 1.

Jeevan Aastha is in addition to twenty other products of the company that caters to education, marriage, pension, health insurance and unit-linked policies — Fortune Building and Gold Plus.
Madhu claimed that LIC (International) has declared the highest bonus rates among the life insurance companies in the Gulf region in recent years.