MEHFOOZ SARMAYA PLAN

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Life takes you in many directions

• Marriage
• Business ventures
• Grandchildren
• Retirement
• Education

And with each new pathway, your life insurance policy should accompany you at every step. Universal life insurance is specifically designed to respond to changing needs. In addition to flexible death benefits and premiums, universal life offers cash value growth potential.

 

You can set the amount of each premium payment based on your policy’s death benefit and financial objectives.

 

The sum assured and premiums will increase automatically by 5 percent each year, beginning from second year. The escalation in sum assured can be thought of as a cushion against inflation. However, if you do not wish to increase the premium each year by 5 percent, you may continue to pay a fixed premium. If the policy matures, or if you withdraw 100 percent of your cash value at an earlier age, you will have to choose one of the following options to receive your accumulated amount.

 

Take a Single Lump Sum and terminate the policy
Life Long Pension instead of a lump sum
A combination of Lump Sum Payment and Life Long Pension

After two policy years have been completed, and provided at least two full policy years' premiums have been paid under the policy, you can make withdrawals from your account value to meet your cash needs.

 

Supplementary Riders
The following supplementary riders can be attached to the policy:

• Accidental Death Benefit (ADB)
• Accidental Indemnity Benefit (AIB)
• Family Income Benefit (FIB)
• Term Insurance Rider (TIR)
• Major Surgical Benefit Rider (MSB)

 

Evidence of good health Normal underwriting procedure will apply. Evidence of good health or medical exams will be required if you decide to increase the premium over and above the normal escalation of 5 percent per year or attach riders to your policy providing life insurance or disability protection.

 

Benefits Payable on Death of Life Insured On the death of the life insured, provided the policy has not lapsed, the benefit payable will be either (i) or (ii), whichever is the higher amount.

• the sum insured in respect of the policy year in which the death took place
• the Account Value of the policy year in which the death took place

Outstanding amounts due to us (if any) against loans given shall be deducted from any death benefit.

 

Escalation in Sum Insured and Amount of Premiums Starting from the beginning of the second policy year, the yearly premium (excluding premiums for supplementary contracts) and sum insured will automatically increase each year by 5 percent. This can be thought of as a cushion against inflation. The policyholder can opt not to increase the premium and sum insured in the beginning of the policy year. If the policyholder exercises this right more than three times then medical evidence would be necessary.

 

Account Value The premium paid each year less any related expenses will be credited to your account. Cost of insurance, charges for management expenses and premium for any rider attached to your basic policy will be deducted. The amount in your account will be invested in secured investments. Your account will be credited with your share of investment income earned on the invested assets.

 

It should be noted here that the rate of increase in your account value is subject to the amount and timing of your premium payment and the investment income earned by the Company on the invested assets. Both these variables are unpredictable in the long range.

 

Expenses and Mortality Charges The following percentages of premiums will be deducted from your account value as management expenses. The net allocation of premiums to the account will be the premium paid less expenses.

Policy Year		Expenses as a percentage of Premium
1		90 percent
2		15 percent
3 onward		5 percent

 

After you have paid 10 or more years’ premiums, you can withdraw 100 percent of your account value less any loan outstanding, and terminate the Policy.

 

Automatic Non-Forfeiture If a premium has remained unpaid beyond the grace period, we will keep the policy in force to the end of the current policy year. Mortality and expense charges will continue to be deducted from the account value. Also the investment income will be credited to the account. The policy will lapse only if the net cash surrender value at the end of the previous Policy Year is not enough to cover necessary mortality and expense charges for the current policy year. Therefore, it is advisable to pay premium as they fall due.

 

Policy Loans After two policy years have been completed, and provided at least two full policy years' premiums have been paid under the policy, you can take out a loan against the Net Cash Value of the policy. The amount of the loan will not be more than 90 percent of the said Net Cash Value.

 

Cash Surrender Value After two policy years have been completed, and provided at least two full policy years' premiums have been paid under the policy, you may terminate the policy and ask us to pay you the following percentages of your account value, less any loan outstanding.

 

Number of Annual Premiums Paid		Percentage of Account Value
1		0 percent
2		75 percent
3		80 percent
4		85 percent
5		90 percent
6		92 percent
7		94 percent
8		96 percent
9		98 percent
10+		100 percent

 

After you have paid 10 or more years’ premiums, you can withdraw 100% of your account value less any loan outstanding, and terminate the Policy.

 

Partial Termination Instead of terminating the whole policy, you can terminate part of it. The policy will continue for the remaining proportion, all benefits and premiums being proportionately reduced.

 

Pension from an age of your choice If the policy matures, or if you withdraw 100% at an earlier age, you will have the option to take a pension from an age of your choice in lieu of the lump sum money. The rate of pension will be decided at the time of maturity according to the financial and other conditions ruling at that time. At the chosen maturity date you can elect to take a portion of your net cash surrender value in lump sum and apply the rest towards pension.

 

We have designed the Mehfooz Sarmaya Plan for the benefit of citizens in all walks of life. This plan provides you with SECURITY, TRANSPARENCY, FLEXIBILITY and LIQUIDITY.