Fund Value is the value obtained by multiplying the number of units and the NAV of the fund on a particular date.
It is the amount payable on maturity subject to the policy being in-force on the date of maturity. The risk cover ceases and the unitised fund value is paid to the policyholder.
If the life assured dies during the policy term (subject to policy being in-force), the death benefit payable will be any one of the following:
Sum assured and unitized fund value
Higher of sum assured and unitized fund value
The death benefit may also be customised in certain plans like Children’s Plan.
In case of paid-up policies, the death benefit payable shall be the sum of the paid-up sum assured and the unitized fund value.
*As per the new IRDAI guidelines, the death benefit payable at any point of time shall be at least equal to 105% of the total premiums paid till the date of death*
*Discontinuance – Before completion of 5 years*
If a policyholder does not pay premiums before the grace period, following options are available:
To revive the policy within a period of two years from the date of discontinuance, or
To completely withdraw the policy without any risk cover.
Once the policy is discontinued, the risk cover will cease and the fund value less the applicable discontinuance will be moved to the Discontinued Policy Fund.
The minimum guaranteed interest rate applicable to the “Discontinued Policy Fund” shall be 4% p.a.
A fund management charge of 0.50% p.a. will be levied for the amount in the Discontinued Policy Fund.
If the policyholder does not take any option, policy will be assumed to be completely withdrawn and fund value will be paid out at end of lock-in period by default.
In the instances where the revival period is not completed at the end of the lock-in period, the policyholder can opt to receive the proceeds either.
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