Bajaj Allianz ChildGain_Ver2

7/29/2019 Bajaj Allianz ChildGain_Ver2

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For Internal Circulation Only

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PRODUCT CIRCULAR

BAJAJ ALLIANZ CHILDGAIN

Department: Product Development

Version: 1


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Product Development December 2008 2

1. PRODUCT TYPE

The cost of childrens education is quite high today, and quality education is likely to become moreexpensive in the future. Therefore, it is necessary to plan for these expenses, because they are nolonger costs that can be adjusted easily from the salary. This product is to help parents/legalguardians (policyholder) to plan the educational expenses for their children.

This is a participating endowment plan with minimum guaranteed benefits payable on the childattaining specific ages after the premium payment term but during the policy term that ends with thefinal payout. The product will be marketed as a money back product for children. The main lifeAssured is the child with the policyholder (parent/legal guardian) being the counter life assured(CLA).

This plan offers the following in-built benefits:Premium Waiver Benefit: In the event of the death or accidental total permanent disability of thecounter life assured during the premium payment term, all future premiums are waived.

Family Income Benefit: in the event of the death or accidental total permanent disability of thecounter life assured during the policy term, a monthly income benefit of 1% of the S.A. per month willbecome payable to the child till the end of the policy term. The guaranteed payouts remain unaffected.The Family Income benefit is subject to a maximum of Rs. 10,000 per month per policy.

The other additional benefit available with this plan is:

Start of life Benefit

There are some additional features in this plan to provide customer advantage: Option to buyfurther insurance on Maturity.

2. PRODUCT PACKAGING

There are 4 product packages available:

o Bajaj Allianz ChildGain 21o Bajaj Allianz ChildGain 24o Bajaj Allianz ChildGain 21 Pluso Bajaj Allianz ChildGain 24 Plus

3. ELIGIBILITY AND LIMITS

Child ages between 0 to 13 attained at entry. Policyholder ages between 20 to 50 attained at entry. Limited Premium payment term of 5 to 18 years. The premium payment term is to be ascertained,

as the period from the date of commencement till the policy anniversary following the birthdaywhen the child attains 18 years of age.

Maximum age of child at maturity is 21 or 24. Policy term will be between 11 to 24 years for age 24 at maturity and 8 to 21 for age at maturity 21.

The policy term is to be ascertained as the period from the date of commencement till the due date

of the last guaranteed payout as opted. The Policy Term + Age of policyholder should not exceed 70 for this plan.


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Conditions Eligibility

Minimum age of the policyholder (CLA) 20

Maximum age of policyholder (CLA) 50

Minimum age of child 0

Maximum age of child 13

Minimum Premium Payment Term 5

Maximum Premium Payment Term 18

Maximum age of child at maturity 21 or 24 years

Minimum Sum Assured Rs. 1,00,000

Maximum Sum Assured Rs. 50,00,000

Minimum premium Rs. 5000 for yearly, Rs. 3000 forHalf yearly, Rs. 3000 for

Quarterly, and Rs. 700 forMonthly

4. BONUS

Reversionary Bonus: After every valuation under sec. 13 of the Insurance Act 1938, at the end of eachfinancial year the Company may declare a rate of reversionary bonus expressed as a percentage. This

percentage shall be applied to the sum assured plus existing declared reversionary bonuses todetermine the amount of reversionary bonus to be added to the policy at the year-end. The bonus willaccrue only during the premium payment term. No bonus will accrue thereafter.

Interim Bonus: In the event of a death claim part way through a financial year or before the valuationresult is declared, an interim bonus may be payable as per the actuarys recommendation.

Terminal Bonus: On Child Life Assured surviving to the end of the Premium Term or on death ofChild life assured after 15 (fifteen) policy years but before the end of Premium payment term alongwith the payment of the vested bonuses the Company may pay terminal bonus for in force policies asper the norms applicable at that time.

5. SURVIVAL/MATURITY BENEFIT

Under this policy the survival benefit will be in the form of payouts commencing at the policyanniversary following the completion of age 18 (when the child normally enters college). There aretwo options available for the receipt of the cash payouts. The option must be chosen at inceptiononly.

Option 1 (For ChildGain 21 and ChildGain 21 Plus)

At Age 18 20% of SA + Vested Bonus

At Age 19 25% of SA

At Age 20 25% of SA

At Age 21 35% of SA

TOTAL 105% of SA*


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Option 2 (For ChildGain 24 and ChildGain 24 Plus)Cash payouts are given at ages 18, 20, 22 and 24 of the life assured child. The payments are made onthe policy anniversary following the completion of respective ages. The guaranteed percentage of thesum assured returned at various ages are given in the table below:

At Age 18 25% of SA + Vested Bonus

At Age 20 25% of SA

At Age 22 25% of SA

At Age 24 40% of SA

TOTAL 115% of SA*

* indicate probable increase in the survival benefit depending upon the higher interest rate duringthe survival instalment.All declared reversionary bonuses plus interim bonus plus a possible terminal bonus is paid alongwith the first installment of the survival benefit. No bonus will accrue once the installmentpayments start. The policy terminates on payment of last installment of survival/maturity benefit.

6.DEATH BENEFIT (ON DEATH OF CHILD LIFE ASSURED)

In case of death of the child before the age of 7 years during the premium payment term the premiums

paid will be refunded without interest and the policy will terminate and the company will not beliable to pay any further benefits.

In case of death of the child after completed age of 7 years during the premium payment term the fullsum assured with accrued bonuses will be paid to the parent and the policy will terminate and thecompany will not be liable to pay any further benefits.

The death benefit will be the sum assured plus declared reversionary bonuses plus interim bonus (thebonus amounts being the amount accrued on the sum assured plus bonuses thereon). In case of deathafter 15 full policy years, the company may pay terminal bonus for in-force policies. The policyterminates on death of the policyholder.

In case of death of the child after the premium payment term, the outstanding cash payouts will bepaid as one lump sum to the parent and the policy will terminate.

7. IN BUILT BENEFITS

Premium Waiver BenefitIn case of death or accidental total permanent disability of the policyholder during the premiumpayment term, all future premiums are waived. However, this benefit will not be available in theevent of accidental permanent total disability after age 65 of the policyholder.

Family Income BenefitIn case of death or accidental total permanent disability of the policyholder during the term of thepolicy i.e. before the due date of the last guaranteed payout, a monthly income benefit of 1% of thesum assured is paid till the end of the policy term. The family income benefit will cease at age 21 or 24of the child (as selected by the policyholder Option 1 or Option 2) or the death of the child,whichever is earlier. However, this benefit will not be available in the event of accidental permanenttotal disability after age 65 of the policyholder. The Family Income benefit is subject to a maximum ofRs. 10,000 per month per policy.

8. OPTION TO PURCHASE ADDITIONAL INSURANCE AT MATURITY:

At Least 6 months prior to the maturity of this policy the child will have the option to purchase a withprofits endowment or an equivalent plan commencing from the maturity of the policy from Bajaj


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Allianz for twice the amount of face value of this policy without any medical examination on thepremium rates prevailing at that time.

9. ADDITIONAL FEATURE (AVAILABLE WITH THE CHILDGAIN 21PLUSAND CHILDGAIN 24PLUS)

START OF LIFE BENEFIT:

This will be an additional benefit offered under the policy, and has to be selected by the policyholder.

The benefit has to be opted for at the time of inception of the policy and cannot be addedsubsequently. In case of death or accidental total permanent disability of the CLA during the term ofthe policy, i.e. before the final payout, an amount equal to the sum assured will be paid along with thefinal guaranteed payout i.e. at age 21 or age 24, as selected by the policyholder. However, this benefitwill not be available in the event of accidental permanent total disability after age 65 of thepolicyholder. This benefit is available to a maximum limit of Rs. 10 lakhs under all ChildGain policiestaken together.

10. EXCLUSIONS

Exclusions of Family Income Benefit and Premium Waiver Benefit

a) In case of death of the Counter Life Assured due to suicide within one year from date of

Policy , the benefit of Waiver of future premiums and Family Income benefit will not beallowed. However, the assurances on the childs life will continue subject to payment of futurepremiums as stipulated.

b) In the following cases of DISABILITY of Counter Life assured the Family Income Benefit orPremium waiver benefit shall not be paid:

Disability as a result of war, invasion, civil war, rebellion or riot;

Disability as a consequence of being under the influence of alcohol or drugs other than inaccordance with the directions of a registered medical practitioner;

Disability as a result of the taking part in any naval, military or air force operation;

Disability as a result of the participating in or training for any dangerous or hazardous sportor competition or riding or driving in any form of race or competition;

Disability as a result of aviation, gliding or any form of aerial flight other than as a fare paying

passenger of a recognised airline on regular routes and on a scheduled timetable; Disability as a result of attempted self injury whilst sane or insane; Disability as a result of failure to seek or follow medical advice.

Disability as a result of the committing any breach of law;

Exclusions for Start of Life:

a) In case of death of the Counter Life Assured due to suicide within one year from date ofPolicy, Start of Life Benefit if opted will not be allowed. However, the assurances on thechilds life will continue subject to payment of future premiums as stipulated.

b) In the following cases of disability of Counter Life Assured the Start of Life benefit shall not bepaid:

Disability as a result of committing any breach of law; Disability as a result of war, invasion, civil war, rebellion or riot; Disability as a consequence of being under the influence of alcohol or drugs other than in

accordance with the directions of a registered medical practitioner; Disability as s result of taking part in any naval, military or air force operation; Disability as a result of participating in or training for any dangerous or hazardous sport or

competition or riding or driving in any form of race or competition; Disability as a result of aviation, gliding or any form of aerial flight other than as a fare paying

passenger of a recognised airline on regular routes and on a scheduled timetable;


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Disability as a result of attempted self injury whilst sane or insane; Disability as a result of failure to seek or follow medical advice.

11. NON DISCLOSUREIn case of non-disclosure or fraud or misrepresentation in any document leading to the acceptance ofthe risk, the company may at its discretion repudiate the claim, subject to Section 45 of the InsuranceAct.

12. PREMIUMSa) Premium payment term

The premium payment term is to be ascertained, as the period from the date ofcommencement till the policy anniversary following the birthday when the child attains 18years of age.

b) FrequencyThe following payment modes are available: annual, half-yearly and quarterly. Monthly ispermitted only by salary deduction. If monthly premiums are set up by deduction fromsalary and the policyholder ceases at any time to have a salary available for makingdeductions then the policyholder will have the option to pay his monthly premium directly

for a temporary period in the event of industrial strife, loss of wage due to prolonged illnessetc. The premium frequency may be changed on the request of the policyholder to annual,half yearly, or quarterly.

c) Premium frequency factorThe basic premium will be derived for annual premium payment mode. The premium forfrequencies other than annual is then given by the annual premium multiplied with thefrequency factor. The factors are:

Premium frequency Monthly Quarterly Half yearly

Frequency factor 0.09 0.26 0.51

d) Premium payment dates

The policy can be issued at any day, but the date of commencement cannot be after the 28 th ofa month. Premiums are due according to the premium payment frequency.

e) Days of grace1 month and not less than 30 days. After that the policy will lapse provided that where apolicy has acquired a surrender value it shall be kept alive to the extent of paidup suminsured. (as per Section 113 of the Insurance Act)

f) Reinstatement/RevivalPermitted, subject to underwriting, within 5 years from the due date of the first unpaidpremium subject to the payment of outstanding premiums plus 10% interest from the originalpremium due dates. The policy can be reinstated without underwriting requirements upto six

months from the due date of first unpaid premium. The underwriting requirement will bedeclaration of good health for reinstatement in the 7 th month. After the 7th month, theunderwriting requirements will be as per prevailing underwriting norms.

g) BackdatingDate of commencement of policy may be backdated up to the beginning of a financial yearsubject to the payment of back premiums plus 10% interest. In the case of backdating upto 1month, the same would be allowed free of interest.


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h) Premium discountPremium discount will be offered for all policies where the sum assured exceeds the minimalsum assured of Rs. 1,00,000 by at least Rs. 10,000. The discount is Rs. 84 for each full Rs.10,000 the sum assured exceeds the minimal sum assured for annual premium paymentmode.

i) Permissible alterationsThe premium frequency may be changed.

13. SURRENDER VALUES

The policy can be surrendered provided three full years premiums have been paid. However forpremium payment terms of 5 and 6 years, the policy can be surrendered after two full years premiumshave been paid. The surrender values during the premium payment term will depend on the amountof premium paid. The surrender value will be calculated by applying a surrender value factor to thepaidup value including accrued reversionary bonuses as mentioned below.

The guaranteed minimum surrender value is 30% of all premiums paid excluding the first yearpremium and excluding the premiums for premium waiver benefit and Family Income benefit and

additional benefit opted by the proposer.

The surrender value after the premium payment term will be the discounted value of the outstandinginstalment payments discounted at an appropriate rate of interest.


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Appendix A

Accidental permanent total disabilityDisability as a result of an accident must be total and expected to be permanent and the accidentmust result in one of:

Loss of both eyes

Loss of both arms or both hands

Loss of one arm and one leg Loss of one arm and one foot

Loss of one hand and one foot

Loss of one hand and one leg

Loss of both legs

Loss of both feet

Removal of the lower jawDisability must occur within 180 days from the date of accident. A written intimation of the accidentmust be given within 60 days of the accident.

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Documents

Bajaj Allianz ChildGain_Ver2