Differnce between FD and Lic?

• Policyholder: The person who buys the policy and pays the premiums
• Life assured: The person whose life is insured
• Premium: The amount paid to keep the policy active
• Sum assured: The amount the insurance company pays to the nominee if the life assured dies during the policy term
• Policy tenure: The length of time the policy provides coverage
• Nominee: The person who inherits the sum assured if the life assured dies
• Accidental benefit: Paid to the nominee if the policyholder dies in an accident.

A grace period of one month is allowed where the mode of payment is yearly, half-yearly or quarterly and 15 days for monthly payment, but it should not be less than 30 days. If death occurs within this period, the insured is considered in respect of the entire sum assured.

If the policy has run for at least 3 full years and the subsequent premiums have not been paid, the policy will not be void but the sum assured will be reduced to an amount which bears the same proportion to the number of premiums paid. The concessions regarding claim in the above case are explained in the appropriate section.

Subject to the provision of section 45 of the Insurance Act 1938, in case of any untrue or incorrect statement contained in the proposal, personal particulars, declaration and related documents or any material information, wherever applicable, the policy shall be declared void and all claims to any benefit based thereon shall be forfeited. 

This policy shall be void if the life assured commits suicide at any time on or after the date on which the risk under the policy commences but before the expiry of one year from the date of commencement of the policy.

After payment of premiums for a minimum period of three years, the surrender value allowed under the policy is equal to 30% of the total premiums paid excluding the first year premium and all extra premiums.

The rate of instalment premium shown in the policy schedule will remain constant as long as the employee continues to work with the employer mentioned in the proposal. The policyholder should inform the Corporation on leaving the employment of the said employer. In case the said employer withdraws the Salary Savings Scheme, the Corporation will inform the policyholder. Thereafter the 5% discount given under the Salary Savings Scheme will be withdrawn.

After the policy is issued, in many cases the policyholder feels that the terms are not suitable for him and he wants to change them. LIC allows certain types of changes during the policy term. However, except for a few exceptions, no changes are allowed within one year of the commencement of the policy. The following changes are allowed.

• ● Change in class or period.
• ● Reduction in sum assured
• ● Change in the mode of payment of premium
• ● Removal of additional premium
• ● Change from no profit plan to profit plan
• ● Change of name
• ● Improvements in Policies
• ● Settlement option for payment of sum assured by instalments
• ● Grant of accident benefit
• ● Grant of premium waiver benefit under CDA policies
• ● Change in place and currency of payment of policy proceeds

The charges for change or alteration in the policy are called quotation charges by the Corporation and no additional charge is levied for effecting the change.

A duplicate policy provides its owner with the same rights and privileges as the original policy. The following are the requirements for issuing a duplicate policy:
1. Indemnity bond duly notarized as per the required stamp value and
2. Any one of the photo identity proof: Passport, PAN Card, Voter ID Card, Driving License, Personal Identity Card issued by a Government Organization or a reputed commercial organization and
3. Any one of the residence proof: Telephone bill, Bank A/C statement, Letter from any recognized public authority, Electricity bill, Ration card, Valid lease agreement along with rent receipt not older than 3 months, Certificate from employer as proof of residence.
4. Necessary fee towards policy preparation charges is to be paid at the branch cash counter.

However, in following cases the policyholder is required to visit the branch office to know the requirements:
1. Policies under which absolute assignment is operative or
2. In death claim cases where the title is open and exemption from strict legal evidence of title is to be considered.

The proofs of age which are generally acceptable to the Corporation are as follows:

• ● A certified extract from the municipal or other records maintained at the time of birth.
• ● Certificate of baptism or certified extract from the family Bible if it contains age or date of birth.
• ● Certified extract from school or college if age or date of birth is mentioned in it.
• ● Certified extract from the Register of Service in case of Government servants and employees of Semi-Government institutions including Public Limited Companies and Passport issued by the Passport Authorities in India.

• ● Marriage certificate in case of Roman Catholics issued by the Roman Catholic Church.
• ● Certified extracts from service registers of commercial establishments or industrial undertakings provided such extract specifically mentions that conclusive evidence of age was produced at the time of recruitment of the employee. 
• ● Birth certificate issued by Syedna of Baroda vs Maulana Badruddin Sahib 
• ● Identification card issued by the Department of Defense. 
• ● University Certificate or Matriculation / Higher Secondary Education, S.S.L. Certificate issued by a Board constituted by the State/Central Government. 
• ● Non-standard age proofs like horoscope, service records where age is not verified at the time of admission, E.S.I.S. card, marriage certificate in case of Muslim proposer, declaration of age, self-declaration and certificates by Gram Panchayats are accepted subject to certain rules.

The nominee is statutorily recognised as a payee who can give a valid discharge to the Corporation for the payment of the policy money.

The nomination will be incorporated in the text of the policy at the time of its issue. After the policy has been prepared and issued and if no nomination has been incorporated the insured can usually effect a nomination only by an endorsement on the policy. The nomination so made needs to be notified to the Corporation and registered by it in its records. The nomination need not be stamped.

Any change or cancellation of nomination needs to be given in writing only by the insured.

Nomination under a joint life policy can only be a joint nomination. Nomination cannot be made in favour of a stranger as there is no insurable interest and it may involve moral hazard. Nomination in favour of wife and children as a class is not valid. Specific names of existing wife and children should be mentioned. Where nomination is made in favour of successive nominees, viz., nominee "A" followed by nominee "B" failing which nominee "C", nomination in favour of a person in the order mentioned shall be considered. Where the nominee is a minor, the person appointed to receive the money in the event of death of the life assured during the minority of the nominee should be appointed. No nomination can be made under a policy financed out of HUF funds.

In case of first approval of nomination the date of registration of nomination shall be the date of receipt of the policy by the servicing office and in case of any other nomination or cancellation or change, the date of receipt of the policy and/or date of notice, whichever is later, shall be the date of registration.

An assignment has the effect of directly transferring the rights of the transferor in respect of the transferred property. Immediately on the execution of an assignment of a policy of life insurance the assignor gives up all his rights, title and interest in the policy to the assignee. In such cases premium/debt interest notices etc. will be sent to the assignee. If the assignment is made in favour of public bodies, institutions, trusts etc., the premium notices/receipts will be addressed to the officer who has been nominated by the institutions as a person to receive such notices. An 
assignment of a life insurance policy once validly executed, cannot be cancelled or rendered ineffective by the assignor. The scoring of such assignment or super scribing words such as 'cancelled' on such assignment does not cancel the assignment. And the only way to cancel such assignment would be to reassign it by the assignee in favour of the assignor.

There are two types of assignment:

1. Conditional assignment by which the assignor and assignee may agree that on the occurrence of a specified event not dependent on the will of the assignor, the assignment shall be suspended or cancelled either wholly or in part. 

2. Absolute assignment by which all the right, title and interest vested in the assignor in the policy are transferred to the assignee without any reversion to the assignor or his property.

The assignee may reassign the interest in the policy to the assignor during the term of the policy. Such reassignment shall have the effect of cancelling the assignment in favour of the assignee and after the reassignment is executed on the policy document, the right, title and interest under the policy shall revert to the assignor.

1. If the policyholder has paid premiums for at least 3 complete years and subsequently stops paying premiums, and in the event of death of the life assured within six months from the due date of the first unpaid premium, the policy money will be paid along with interest till the date of death. 

2. If the policyholder has paid premiums for at least 5 complete years and subsequently stops paying premiums and in the event of death of the life assured within 12 months from the due date of the first unpaid premium, the policy money will be paid in full after deducting the unpaid premiums, along with interest till the date of death. 

If the premium under a policy is not paid within the grace period of days, the policy lapses. A lapsed policy may be revived in accordance with the terms of the scheme on furnishing proof of continued insurability to the satisfaction of the Corporation and payment of all outstanding premiums together with interest at the rate of interest prescribed by the Corporation from time to time. The Corporation however reserves the right to accept on original terms, accept with modified terms or reject the revival of a discontinued policy. The revival of a discontinued policy shall be effective only after approval by the Corporation. The

cost of medical reports including special reports, if any, required for the purpose of revival of the policy shall be borne by the insured person.

The Corporation may grant a loan to the policyholder against his policy as per the terms and conditions applicable to the policy. The requirements for granting a loan are as follows:

a) Application for loan supported by the terms and conditions of the loan being placed on the policy.
b) The policy shall be assigned absolutely in favour of the Corporation 

c) Receipt of loan amount
The maximum loan amount available under the policy is 90% (85% in case of paid-up policies) of the surrender value of the policy including cash value of bonus.

"Provision has also been made on the customer portal for registration of loan request for policyholders registered for Premier Services. After registration of the request, loan documents can be submitted at any nearest LIC branch office."

• ● Loan is given against the policy as per the terms and conditions printed on the back of the policy bond.
• ● It is mentioned in the policy whether a particular policy comes with loan facility or not.
• ● The rate of interest charged on policy loan is declared by the Corporation every year and is insurance specific.
• ● Interest on loan is payable half-yearly.

The minimum period for which the loan can be given is six months from the date of its disbursement. If the loan is desired to be repaid within this period then interest has to be paid for a minimum period of six months. 
If the policy becomes a claim due to maturity or death within six months from the date of loan then interest will be charged only till the date of maturity/death.

Settlement of claims is a very important aspect of service to policyholders. Therefore, the Corporation has laid great emphasis on prompt settlement of maturity as well as death claims. The

process of settlement of maturity and death claims is detailed below:

1) In case of endowment type policies, the amount is payable at the end of the policy term. The branch office, which services the policy, sends a letter to the policyholder at least two months before the due date of payment informing the date on which the policy money is payable. The policyholder is requested to return the discharge form duly completed along with the policy document, NEFT mandate form (bank account details with supporting proof), KYC requirements etc. On receipt of these documents the payment is processed in advance so that the maturity amount is credited to the policyholder's bank account on the due date.

2) Some plans like money back policies provide periodic payments to policyholders provided the premiums due under the policy are paid by the due anniversary for survival benefits. In cases where the amount payable is up to Rs. 500,000/-, payments are released without asking for the discharge receipt or policy documents. Survival benefits up to the sum assured of Rs. 200000/- under Jeevan Anand policies are also released without a policy bond or discharge form. However, these two requirements are insisted upon in case of higher amounts.  

Death claim amount is payable in case of policies where premium is paid upto the due date or where death occurs within days of grace. On receipt of intimation of death of the life insured the branch office fulfils the following requirements:
a) Claim Form A - Claimant's Particulars containing the details of the deceased and the claimant. 

b) Certified extract from the death register 

c) Documentary proof of age, if age is not acknowledged 

d) Evidence of title to the property of the deceased if the policy is not nominated, assigned or issued under the MWP Act. 
e 

) Original policy document 

If death occurs within three years from the date of risk or from the date of revival/reinstatement, the following additional forms are required.
a) Claim Form B - Certificate of Medical Attendant To be completed by the Medical Attendant of the deceased during his last illness 

b) Claim Form B1 - If the life insured was treated in a hospital 

c) Claim Form B2 - To be completed by the Medical Attendant who treated the deceased life insured before his last illness 

d) Claim Form C - Certificate of Identity and Burial or Cremation To be completed and signed by a person of known character and responsibility 

e) Claim Form E - Certificate by Employer If the life insured was an employed person 

f) Certified copies of First Information Report, Post-mortem Report and Police Investigation Report if the death is due to accident or unnatural cause. 
These additional forms are required to satisfy ourselves on the genuineness of the claim, i.e., no material information which would affect our acceptance of the proposal has been withheld by the deceased at the time of the proposal. Further, these forms also help us at the time of investigation by the officers of the Corporation.

Double Accident Benefit is provided as an additional benefit to the life insurance cover. An additional premium of Rs.1/- per Rs.1000/- is charged for this purpose. To claim the benefit under Accident Benefit the claimant has to produce proof to the satisfaction of the Corporation that the accident has been defined as per the policy terms. Generally documents like FIR, Postmortem Report are insisted upon to claim this benefit.

Disability benefit claims include waiver of future premiums under the policy and extended disability benefit in addition to monthly benefit payment as per the terms of the policy. The essential condition for claiming this benefit is that the disability is total and permanent so as to prevent him from earning any wages/compensation or benefits as a result of the accident.