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Savings Plan
  Your Family’s Hopes Depend on you. Saving Plan ensures it doesn’t end with you!

Overview • Frequently Asked Questions

 

How does the Savings Plan work?

The Savings Plan is designed to save funds to meet your child's college fees or your son's/daughter's marriage expenses on payment of regular premium.

ALICO Pakistan will need the following information to quote the premium:

For subscription to Savings Plan for your child's college education fees:

  • Year(s) to College
  • Term in College
  • Expected Annual College Fee (estimated)

For subscription to Savings Plan for your child's marriage plan:

  • Target Marriage Fund
  • Your present age

You are urged to calculate on the basis of current expenses pertaining to college expenses or marriage (as the case may be) and apply indicative inflation factors to estimate the expected annual college fee or marriage funds required.

The premiums will be payable by you from the date you subscribe to the policy and may continue between 10 years to 25 years depending on the duration of the policy (as selected by you). At the end of such period, the accumulated account value will be paid to you unless surrendered prematurely in terms of the policy.

 

What if I die before the college education of my child starts or my daughter's marriage?

In the unfortunate event of death of the parent (insured) during the term of the policy, the benefits under the Term Life policy are follows:

  • The accumulated account value or the premiums paid (which ever is higher), plus.
  • A lump sum benefit of Rs. 200,000.

 

What if the cause of my death is an accident before the Policy maturity date?

In the unfortunate event of an accidental death of the parent (insured) during the term of the policy, the benefits under the policy are follows:

  • Additional Accidental Death benefit of Rs. 1,000,000 will be paid to the beneficiaries in accordance with the (Accidental Death) Terms & Conditions applicable to the policy.
  • The accumulated account value or the premiums paid (which ever is higher) plus a sum of Rs. 200,000.

 

Do I have to submit any evidence of good health or undergo a medical exam to buy this plan?

No, however evidence of good health or the need to undergo medical examination will be required only in the event that you decide to avail the Savings Plan with additional riders. For example, additional life insurance or disability protection pursuant to executing relevant supplementary agreement (or other document(s) required by ALICO Pakistan in such respect).

 

What happens to the premium I pay?

The premiums you pay each year (less premium related expenses) will be credited to your account value to be invested in secure investments by ALICO Pakistan, such as Government securities, Bonds of reputable corporations and so on. Every month, deductions will be made by ALICO Pakistan from your account in respect of administrative charges, cost of insurance, if any, and credited with investment earnings.

 

How do I pay the premium?

Premium payment could be made through Direct Debit Authority from either a Bank Account or Credit Card.

 

What percentage of the premiums I pay is allocated to my account value?

The percentage varies by policy year as follows:

Policy Year
Accumulate Account Value as a
Percentage of Premium
1
30 %
2
94 %
3 onwards
100 %

 

In addition, there will be a monthly administrative charge of Rs.100 deductible every month by ALICO Pakistan throughout the period of the policy from the account value accumulated.

 

Will my account continue to grow even If I stop premium payments?

If you stop premium payment, the monthly deductions in respect of administrative charges and insurance costs (which if availed, will be in accordance with the applicable supplementary contract/rider) in any case will continue to be made from the account value.

Your policy will lapse if the account value becomes insufficient to cover the monthly deductions. As such, it is advisable to continue premium payments under the policy for the full premium paying term, i.e., until your child enters the college or the marriage fund required is attained.

 

Would I be able to make withdrawals from my account value or take a loan against the same?

Yes, you may make withdrawals from your account value accumulated after you have subscribed to the policy for at least 5 years, subject to minimum and maximum withdrawal amount in accordance with the Terms & Conditions applicable to the Policy which allows up to 90% of the net cash surrender value to be availed as loan subject to Terms & Conditions determined by ALICO Pakistan.

But please note that the main purpose of the account value is to meet your child's college fee or your daughter's marriage expenses. It is therefore, not advisable to utilize the accumulated funds for any other purpose.

 

What is the difference between the account value and cash surrender value?

You have the option to surrender your policy at any time subject to the deduction of applicable surrender charges. Such surrender charges will be applicable on the account value accumulated and will be calculated depending on the policy year during which the policy is surrendered. The surrender charges applicable for each corresponding year during which the policy may be surrendered are listed hereunder:

Policy Year
Accumulate Account Value as a
Percentage of Premium
1
100 %
2
100 %
3 onwards
Nil

 

How will the account value grow during the premium paying period?

Please note that the growth of account value depends on:

  • The amount of premium paid and frequency of such payments i.e. whether made annually, semi-annually, quarterly; and
  • The investment yield that will be credited by ALICO Pakistan to your account value every month.

None of these factors can be predicted with assurance and with accuracy so many years in advance. However, an illustration will be provided to give you an idea of how each premium payment will increase the account value based on the policy duration selected.

Please note that all the amounts which may be shown in the illustration(s) are projections. However, the policy guarantees the insured that the account value will be credited with minimum of 4% per annum yield on investment/premium paid.

Inflation protection option is also available to customers for an additional premium charge of 5% per annum on investment/premium paid.

 

Can you tell me something about the insurance company?

Savings Plan is underwritten by ALICO Pakistan.  ALICO first started its operations in Pakistan in 1952 and continued till 1972, when the life insurance industry was nationalized. By 1971, ALICO had issued 72,000 policies and had invested more than US$36 million in the country's economy. In 1994, ALICO was the first foreign life insurer to re-enter Pakistan. It commenced its operation on May 20, 1995 with a paid-up capital of Rs.130 million which today stands at Rs.500 million. ALICO Pakistan is jointly owned by its American parent and the Pakistani public. Along with commitment, it brings to Pakistan an extensive international expertise and modern technology of its parent company.

PORTFOLIO MIX OF ALICO SAVINGS PLAN


ALICO FUND PERFORMANCE

 

 

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