With a majority of insurers having lower premium for term insurance plans than those offered by the Life Insurance Corporation (LIC) of India, premium correction for LIC’s term plans were long overdue. Finally in the first week of August, 2019, the government sector life insurance behemoth replaced its Amulya Jeevan plan with the new and cheaper term plan – Jeevan Amar.

Not only the premium of Jeevan Amar plan is lower than that of Amulya Jeevan, but the new term insurance plan has much wider features and flexibility in both premium payments and getting death claims compared to the old plan, which has been withdrawn just before the introduction of Jeevan Amar.

Here is a comparison of some features of Amulya Jeevan and Jeevan Amar plans:

Maximum Term: The maximum term under Amulya Jeevan was 35 years, but under Jeevan Amar, one may take life cover for 40 years.

Maximum Entry Age: In Amulya Jeevan the maximum entry age was 60 years, but in case of Jeevan Amar, people up to 65 years of age may apply for the term plan.

Maximum Maturity Age: The maximum maturity age under Amulya Jeevan was 70 years, but in case of Jeevan Amar, policyholders may enjoy life cover up to the age of 80 years.

Accident Benefit Rider: There was no provision of accident benefit rider in Amulya Jeevan, but under Jeevan Amar, an applicant may opt for double accident benefit (DAB) at inception of the policy or at any time during the premium payment term (PPT), provided the outstanding PPT is at least five years. The cover under this rider shall be available during the premium paying term only or up to the policy anniversary on which the age nearer birthday of the life assured is 70 years, whichever is earlier. So, this benefit is not available under single premium option. However, the limit for DAB is Rs 1 crore, taking all the policies issued by LIC of India together, except the Jeevan Shiromani policy, where DAB up to Rs 2 crore is allowed.

LIC JEEVAN AMAR: KNOW YOUR POLICY BEFORE PURCHASING

Level of Sum Assured: Under Amulya Jeevan, the amount of sum assured (SA) used to remain fixed throughout the policy term, but in case of Jeevan Amar, applicants have the option to choose either level SA or increasing SA. Under level SA, the amount of SA remains same during the policy period, while under increasing SA, the amount of SA remains same for first 5 policy years and then increases by 10 per cent every year till the 15th policy year or end of the policy, whichever is earlier. The increased SA can’t be more than double the basic SA.

Mode of Premium Payment: There were only two modes to pay premium – yearly and half-yearly – were available under Amulya Jeeva, while in case of Jeevan Amar, along with the yearly and half-yearly modes, applicants have options to choose whether to pay single premium, limited premium or regular premium.

Grace Period: The grace period for paying premium without any interest was 15 days under Amulya Jeeva, which has been increased to 30 days for Jeevan Amar.

Revival Period: The maximum time period allowed to revive a lapsed Amulya Jeevan policy was 2 years, while the revival period for Jeevan Amar policy will be up to 5 years.

Surrender Value: There was no surrender value under Amulya Jeevan plan, but under Jeevan Amar, surrender value will be payable in case of single premium and limited premium plans, subject to terms and conditions.

Payment of Death Claim: Under Amulya Jeevan, death claims were paid only in lump sum, but in case of Jeevan Amar, along with the lump sum, choices are there to opt for death claims in installments as well as partly in lump sum and partly in installments, which may be selected at the proposal stage or at the currency of the policy.