In the month of April -13 Insurance Regulatory and
Development Authority had issued circular regarding changes in Traditional
Products of Life Insurance Industry. After major changes in UlLIP products
Authority has going to do major changes in designing of traditional product. No
doubt the action of Authority has itself confirmed that traditional product will
be much customer friendly and will be able to give more advantages to the customer.
Only one drawback of this regulation is that the commission of insurance
advisors will be less as they are now getting.
Authority has setup the deadline for Insurance
Companies to withdraw all existing traditional product and launch new
traditional product before 1st October 2013. After submission Insurance
Companies and Life Council request regarding the extension of deadline,
Authority has extended the deadline 31st December2013. Many insurance
Companies already filled traditional product under new regulation with
authority and authority very quickly is giving their approval. After receiving approval
from Authority some insurance companies are launching traditional product under
new guidelines.
To creating awareness between general people, we
are committed to bring critical analysis of new traditional product on this
blog WWW.LCIWORLD.BLOGSPOT.COM. TO
maintain this sprit and educate to general people about life insurance products,
we are today analysing AVIVA WEALTH BUILDER PLAN and giving our opinion about
this product to all of you.
“ALL ABOUT Aviva wealth BUILDER PLAN”
Aviva wealth BUILDER:
Aviva Life
Insurance has launched Non-linked Non Participating traditional Insurance plan
that doubles your premium at maturity along with risk coverage during policy
term. The brief details of the Plan are as under:-
Entry Age
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5 years to 50 years
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Policy term and Premium
paying term
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Maturity Age
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Minimum premium
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Regular Premium Rs. 50000
per year
Single Premium Rs. 150000/-
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Maximum premium
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Rs. 1 Crore
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Sum Assured
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Maximum/Minimum Sum Assured
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Premium payment mode
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Single or Yearly
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If at least two years’ regular premiums have not been paid – Policy Shall lapse
Policy holder can re-instate the policy within two years from first unpaid due
premium. If policy not re-instated after two years 30% of premium paid excluding
extra premium will be paid to policy holder.
If at least two years regular premiums have been paid – and policy holder not submit
premium policy shall be paid-up and policy holder will be eligible for paid-up
sum assured benefits.
Surrender: A single premium policy can be surrender any time during policy term
and a regular premium policy can be surrender after two years of premium paid.
Loan: Not available
Free look period: if a Customer not satisfied with the term and conditions of policy he
can submit the request for policy cancelation within 15 days from receipting of
the policy bond.
Service tax: Service tax will be charged to the Customer which is over and above of
premium.
Benefits:
Maturity Benefits: Double of the all premium paid during policy term.
Death Benefits: Sum Assured paid to the Nominee.
Example for Maturity Benefits:-
Ques -1. Name – Anubhav Mishra, Age -05, Policy Term 13, Premium paying term –
Single Premium -1.5 lacs.
Ans -1. Sum Assured – 3 Lacs. , Maturity age -18 years, Maturity Amount – 3 lacs
Return - 5%
Ques -2. Name – Rahul Mishra, Age -05, Policy Term 15, Premium paying term – 5, yearly
Premium -0.5 lacs
Ans -2. Sum Assured – 5 Lacs. , Maturity age -20 years, Maturity Amount – 5 lacs
Return - 5%
Ques -3. Name – VIvek Mishra, Age -05, Policy Term 17, Premium paying term – 10, yearly
Premium -0.5 lacs
Ans -3. Sum Assured – 10 Lacs. , Maturity age -22 years, Maturity Amount – 10 lacs
Return - 6%
Our Recommendation :- After going through critical analysis it’s found that the policy is
attractive but not very attractive you need to pay premium less than policy
term and you will be able to get double of the your premium in all mode
(Single/Regular). The return at entry age at minimum premium based is 5%. But return
is slightly better in 10 year premium paying term that is 6%. The return calculated
without including service tax in premium. If we calculate adding with service
tax return will be less. Many other companies are still not launched their new traditional
product, if you want to invest in traditional policies you need to wait till 31st
December thereafter you have option to choose better policies.
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