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Aviva Affluence Plan

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Aviva Affluence Plan Review

Aviva Affluence is a Unit Linked Insurance Plan which has been designed for wealth creation requirements for individuals. The plan also provides life insurance benefits along with the wealth creation objective it serves.


Highlights of the Aviva Affluence Plan

  • This is a Unit Linked Plan which does not earn bonuses.
  • Premiums under the plan are payable for the entire tenure of the plan or for a limited period. 
  • Maturity Booster additions and Increasing Milestone Boosters are added under the plan which increases the Fund Value.
  • There is an inbuilt accidental death benefit option under the plan which pays an additional Sum Assured in case of accidental death.
  • There are 7 funds from which the policyholder can choose one or more funds for investing his premium based on his risk appetite.
  • The plan also has the option of Systematic Transfer Plan to protect the returns from market volatility.
  • Systematic Partial Withdrawals are available for withdrawing funds in a systematic manner.


Working of the Aviva Affluence Plan

  • The policyholder decides on the premiums he wants to pay and the fund in which the premiums are to be invested.
  • The Sum Assured would be expressed as a multiple of the annual premium paid and the multiple would depend on the policy tenure and age of the policyholder.
  • There are 7 fund options to choose from which are:
    • Balanced Fund II
    • Bond Fund II
    • Enhancer Fund II
    • Growth Fund II
    • Infrastructure Fund 
    • Protector Fund 
    • PSU Fund
  • The policyholder can also choose the Systematic Transfer Plan of investment which manages the investment portfolio automatically. Under the Systematic Transfer Plan feature, which is available if at least 10% of the allocated premium is invested in Protector Fund II, the funds are switched by the company from the Protector Fund II to the Enhancer Fund II on a weekly or monthly basis as directed by the policyholder. This switching continues from the date on which the feature is selected till the entire plan tenure except in the last 2 years. In the last 2 years, the funds are switched from the Enhancer Fund II to the Protector Fund II to protect the returns. The policyholder can choose this feature either at inception or at any policy anniversary except in the last 3 years. This feature can also be opted out of if the policyholder so desires.
  • If the policyholder dies during the tenure of the plan the death benefit is paid.
  • If the plan attains maturity, the maturity benefit is paid.


Benefits and Features of Aviva Affluence Plan

  • Maturity Benefit – On maturity, the Fund Value available on the maturity date would be paid to the policyholder along with the Maturity Booster Additions added and any accrued Increasing Milestone Boosters. 
  • Death Benefit – In case of death of the insured,  higher of the following would be payable as death benefit:
    • Sum Assured including the top-up Sum Assured 
    • 105% of the total premiums paid till death including top-up premiums paid
    • Fund Value as on the date of death including top-up premium Fund Value
      The Sum Assured would be reduced by the amount of partial withdrawals made in the preceding 2 years if the policyholder is below 60 years. If the age is above 60 years, partial withdrawals made after attaining 58 years of age would be deducted from the Sum Assured.
      If the insured is aged between 18 years and 60 years and dies due to accident, in addition to the above benefits, an additional Sum Assured would be paid which is called the Accidental Death Sum Assured. The Sum Assured would be equal to the base Sum Assured subject to a maximum of Rs.50 lakhs.
  • Bonus – Being a ULIP plan, bonus is not declared.
  • Loyalty Additions – Maturity Booster Additions are added to the Fund Value on maturity. The rate of the Additions would depend on the premium paying tenure and is as follows:
Premium Paying tenure Rate of Maturity Booster Additions
5 years 0.60%
7 years 0.65%
10 years 0.70%
15 years 0.75%
16 and above 0.80%
 
  • Increasing Milestone Boosters (IMB)– The plan attracts IMB if the policyholder survives till the policy tenure where the IMB accrues and if all due premiums have been paid till that year. Policy anniversaries which coincide with the maturity date do not attract IMBs. The policy anniversaries on which the IMBs are added and the rate of such IMBs are as follows:
Policy Anniversary IMB expressed as a % of Fund Value
10th 0.50%
15th 0.55%
20th 0.60%
25th 0.65%
 
  • Loan –Loan is not available under the plan.
  • Tax benefit – Premiums paid under the plan would be exempt from tax under Section 80C up to a limit of Rs.1.5 lakhs. The death benefit or the maturity benefit received would also be tax exempt under Section 10(10D) of the Income Tax Act.


COMPARE THIS PLAN WITH OTHER ULIP PLANS


Eligibility Criteria of Aviva Affluence Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
 
  Minimum Maximum
Entry age (Last Birthday) 2 years 50 years
Maturity Age (Last Birthday) 18 years PPT 5 years – 60 years
PPT 7/10/15 years – 65 years
PPT 16 to 30 years – 70 years
Plan tenure 15 years 30 years
Premium payable Rs.1 lakh No limit
Premium Paying Term 5, 7, 10, 15 years or Equal to plan tenure
Sum Assured For ages below 45 years – higher of 10 times the annual premium or 0.5*plan term*annual premium
For ages 4 years and above – 10 times the annual premium
Ages below 45 years:
PPT 5/7/10 years - higher of 10 times the annual premium or 0.5*plan term*annual premium
PPT 15 to 30 years – annual premium * plan tenure
Ages 45 years and above:
PPT – 5/7/10 years – 10 times the annual premium
PPT 15 to 30 years – plan term * annual premium
Premium payment mode Yearly
 


Applicable charges of Aviva Affluence Plan

Being a ULIP plan, there are certain charges applicable. The charges include the following:
  • Premium Allocation Charge – This charge is deducted on receipt of each premium before the premium is credited into the fund. The charges is:
Policy year Regular premium Top-up Premium
1 9% 2%
2 7%
3-10 6%
11 and above 2%
 
  • Policy Administration Charge – A monthly charge of 0.02% of the annual premium is deducted from the fund value in the 2nd to 5th policy years after which the charge increases to 0.20% of the annual premium in the 6th year. From the 7th year onwards the charge would be increased by 2.50% per annum. In all cases, the maximum charge should not exceed Rs.400 per month.
  • Fund management Charge – These charges depend on the type of fund selected and are charged on a daily basis. The applicable charges are:
Fund Type Charge
Balanced Fund II 1.35% per annum
Bond Fund II 1.35% per annum
Enhancer Fund II 1.35% per annum
Growth Fund II 1.35% per annum
Infrastructure Fund 1.35% per annum
Protector Fund 1.35% per annum
PSU Fund 1.35% per annum
Discontinuance Policy Fund 0.50% per annum
 
  • Discontinuance Charge – Applicable for policies in which premiums are discontinued. The charges are:
Year of Discontinuance Annual Premiums above Rs.25,000
1 Lower of 6% of annual premium or Fund Value up to a maximum of Rs.6000
2 Lower of 4% of annual premium or Fund Value up to a maximum of Rs.5000
3 Lower of 3% of annual premium or Fund Value up to a maximum of Rs.4000
4 Lower of 2% of annual premium or Fund Value up to a maximum of Rs.2000
5 year onwards Nil
 
  • Mortality charge – This charge is deducted on the first day of each month based on the Sum at Risk and the policyholder’s age
  • Miscellaneous Charges – For any miscellaneous service applicable charges would be levied.


Additional Benefits of Aviva Affluence Plan

  • Riders – Apart from the inbuilt Accidental Benefit Rider, no other riders are available with the plan.
  • Partial Withdrawals – Partial withdrawals are allowed in the plan after a completion of 5 policy years. Four free withdrawals are allowed in one year. The minimum amount of partial withdrawal is Rs.5000 and the balance in the fund after the withdrawal should not fall below twice the annual premium. The withdrawals would be first affected from the top-up fund value and thereafter the Fund Value of the regular premium. 
  • Systematic Partial Withdrawals – The partial withdrawals can be made systematically through this feature. The policyholder should make a written request to avail the benefits of this feature. This facility can be availed in any policy year except in the last 3 years provided that the Fund Value is more than Rs.5 lakhs when the feature is availed. The withdrawals can be any amount ranging from 3% to 12% of the Fund Value subject to a minimum of Rs.15, 000 annually and the balance in the fund after the withdrawal should not fall below twice the annual premium.
  • Switching – This facility enables the policyholder to change between funds either partially or completely whenever desired. Twelve free switches are free every policy year after which a charge of Rs.0.50% of the amount switched would be levied subject to a minimum amount of Rs.25 and a maximum of Rs.500. 
  • Premium Redirection – This facility enables the policyholder to redirect subsequent premiums to another chosen fund. No charge is levied for availing of this facility.
  • Top-up Premiums – Top-ups are allowed where extra premiums can be paid into the fund in any policy year except in the last 5 years. The top-up premiums would have a top-up Sum Assured which would be 1.25 times the top-up premium paid. A minimum of Rs.5000 should be paid as top-up premium and the maximum top-up premium paid should not exceed the aggregate premiums paid under the plan till the date of top-ups. Top-up premiums have a lock-in premium of 5 years.
  • Grace Period – A grace period of 30 days is allowed for payment of premium during which the plan does not lapse. 
  • Free Look Period – A cooling off period or a free look period of 15 days (30 days in case of distant marketing channels) is granted to the policyholder after the policy issuance to review the policy terms and conditions. If found unsatisfactory, the plan can be cancelled within this period and the premium paid would be refunded after deducting the relevant mortality charge, service tax, cess and stamp duty paid

Plan Details

Let's Understand The Plan With An Example:



You also have an option of Systematic Withdrawal to fund your child's education if required.

Please note:
Minimum Annual Premium is Rs.1,00,000
Available Policy Term: 15 years to  30 years 
Premium Payment Terms available:5,7,10,15 or equal to policy term
Systematic Withdrawal is available after completion of 5 policy years.

The value with assumed rates of return @4% and 8% are not guaranteed and they are not the upper or lower limits of returns of the Funds selected by the policyholder and that the performance of the Funds is dependent on a number of factors including future investment performance.

 

Exclusions in Aviva Affluence Plan

  • If the policyholder commits suicide within 12 months of policy commencement or renewal, the available Fund Value would be paid to the nominee.
  • In case of Accident Benefit, the accident should not be due to alcohol and drug abuse, war and civil commotion, radiation, aviation, non-compliance of medical advice, infection, self-inflicted injury, criminal acts, or hazardous sports and hobbies or for ailments or conditions for which medical treatments were received 48 months prior to policy commencement or revival.


Non-Payment of premium in Aviva Affluence Plan

If the premiums are not paid within the Grace Period, the policy would lapse. The lapsed policy can be revived, surrendered or made paid-up as per the policyholder’s choice.

Making the policy Paid-up

The policy can be converted into a paid-up policy only if 5 full years’ premiums have been paid. After conversion, the policy would acquire a paid-up value which would be:

Paid –up Value = Sum Assured * (number of Premiums Paid / total number of premiums payable)

The Accidental Sum Assured would also be reduced on a similar basis when the policy is paid-up.

A paid-up policy would attract mortality charges, charges for the inbuilt riders, Fund management Charges and Policy Administration charges.

The death benefit payable under a paid-up policy would be higher of the following:
  • Paid-up Sum Assured including any Top-up Sum Assured
  • Fund Value including any top-up Fund Value
  • 105% of premiums paid including any top-up premiums paid till death


Surrendering the policy

  • Within the first 5 policy years
The policy has a 5 year lock-in period. If premiums are discontinued within the first 5 years, the funds in the Fund Value would be transferred to the Discontinuance Policy Fund after deducting the Discontinuation charges. This fund would earn a minimum interest of 4% per annum. The money would remain in the Discontinuance Policy Fund till the completion of 5 years and the Fund Management charges would be deducted as and when applicable. If the policyholder dies during this period, the Fund Value as on the date of death would be paid. Otherwise, after the completion of the lock-in period of 5 years, the available Fund Value would be paid
  • After 5 years
If the plan is surrendered any time after the completion of 5 years, the available Fund Value would be paid without deduction of any charges 


Revival 

Revival is allowed within 2 years from the date of the first unpaid premium. The policyholder would be required to pay the outstanding premium and any interest charged by the insurer to revive his policy.
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