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Aviva Dhan Nirman Plan

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Aviva Dhan Nirman Plan Review

Aviva Dhan Nirman is a traditional, participating Savings Plan which is designed to provide life insurance protection and a steady source of annual income through regular payouts.


Highlights of the Aviva Dhan Nirman Plan

  • This is a traditional Savings Plan where bonuses are declared.
  • Guaranteed annual payouts, expressed as a percentage of the annual premium, are paid after the completion of the premium paying tenure.
  • Simple reversionary bonuses are provided under the plan every year. 
  • The policyholder can choose any term from a choice of 4 available terms and premiums are paid for a limited tenure.
  • Higher Sum Assured levels also attract premium rebates.


Working of the Aviva Dhan Nirman Plan

  • The policyholder chooses the policy tenure, Sum Assured and the premium paying frequency. Based on the above criteria, the premium paying term and the insured’s age, the premium is calculated. 
  • Premiums are to be paid for a limited tenure which depends on the policy tenure chosen.
  • Guaranteed payouts are paid after the completion of the premium paying term till the end of the plan tenure except in the last year.
  • On death during the period, the death benefit is paid.
  • On maturity, the maturity benefit is paid.
COMPARE THIS PLAN WITH OTHER ENDOWMENT PLANS


Benefits and Features of Aviva Dhan Nirman Plan
  • Maturity Benefit – When the plan matures and the premiums have been duly paid, the maturity benefit payable would be the Maturity Sum Assured and the vested reversionary bonuses including any Terminal Bonus declared. The Maturity Sum Assured would be a multiple of the annual premium depending on the plan tenure chosen. The table shows the Maturity Sum Assured for each plan tenure:
Policy term Maturity Sum Assured
18 years 8 times the annual premium
21 years 7 times the annual premium
25 years 6 times the annual premium
30 years 5 times the annual premium
 
  • Death Benefit – If the insured dies during plan term and the policy is in force, the death benefit payable would be highest of the following:
    • 10 times the annual premium
    • Maturity Sum Assured
    • Sum Assured under the plan
    • 105% of all premiums paid till death
      The death benefit would also include the vested reversionary bonuses and any Terminal Bonus.
  • Survival Benefits – If the policyholder survives till the end of the premium paying term and if all due premiums have been paid the insurer would pay regular annual payouts after the end of the premium paying term and till the end of the plan tenure. These payouts are called Survival Benefits and are paid every year except in the last policy year. The rate of such payouts would be 150% of the annual premium paid under the plan.
  • Bonus – Simple reversionary bonuses are declared under the plan every year staring from the end of the first policy year. Bonuses are declared for plans where premiums are regularly paid. A terminal bonus may also be declared under the plan on maturity or death depending on the company’s performance.
  • Loan –Loans are 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 and the survival benefit would also be tax exempt under Section 10(10D) of the Income Tax Act.


Eligibility Criteria of Aviva Dhan Nirman Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
 
  Minimum Maximum
Entry age (Last Birthday) 4 years 50 years
Maturity Age (Last Birthday) NA 75 years
Plan tenure 18, 21, 25 or 30 years
Premium payable annually Rs.14,486 Rs.998,000
Premium Paying Term (PPT) 14, 15, 16 or 18 years
Sum Assured Rs.2 lakhs Rs.1 crore
Premium payment mode Monthly, half-yearly, quarterly and annually



Additional Benefits of Aviva Dhan Nirman Plan

  • Riders – Riders are not available under the plan.
  • Premium Rebates – Sum Assured levels of Rs.5 lakhs and above earn premium rebates. The rate of rebate depends on the choice of the plan term and are as follows:
Plan term Rebate per thousand Sum Assured
18 years Rs.4.50
21 years Rs.5.00
25 years Rs.6.00
30 years Rs.7.50
 
  • Grace Period – A grace period of 30 days is allowed for payment of premium after the due date for annual, half-yearly and quarterly modes of premium payment. For monthly modes, the grace period allowed is 15 days. The life cover under the policy would continue during the grace period.
  • Free Look Period – A cooling off period or a free look period of 15 days 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:
Mr.Sharma is a 30 year old salaried employee. Mrs.sharma.29, is a homemaker.Recently they were blessed with a beautiful daughter.She is 3 months old now
Mr.Sharma wishes that his daughter receives quality education and becomes asuccessful and independent career women. He wants to save money while he is at the peak of hie earning capacity and wants to ensure a regular stream of income starting with his daughter's college going years.

Mr.Sharma take Aviva Dhan Nirman for a Sum Assured of Rs.5 lacs by selecting a Policy Term option of 21 years for which he has to pay an Annual Premium of 
Rs.44,020 (exclusive of service tax) for 15 years.


In the above example the bonus amounts would be around Rs.1.90 lacs and Rs.6.06 lacs under the assumed investment returns of 4% and 8% respectively. Kindly note that the under these scenarios the bonus rates have been calculated in such a way so that they are consistent with the assumed investment return assumption of 4% per annum and 8% per annum. These assumed investment returns and the expected bonuses are neither guaranteed nor the upper or lower limits. The actual future bonus will depend on number of factors including future experience of the 
'with profit' portfolio of the Company.


Premium Illustration

The graph below shows the premiums payable at different combinations of plan tenures, Premium paying terms (PPT), Sum Assured and age of the life insured. The premiums mentioned are exclusive of any taxes.



The associated premium table is as follows:
 
Age Policy Term - 18 years PPT - 14 years Policy Term - 21 years PPT - 15 years Policy Term - 25 years PPT - 16 years
Sum Assured - 2.5 lakhs Sum Assured - 5 lakhs Sum Assured - 2.5 lakhs Sum Assured - 5 lakhs Sum Assured - 2.5 lakhs Sum Assured - 5 lakhs
35 years 23,920 45,590 23,750 45,000 22,825 42,650
40 years 24,300 46,350 24,245 45,990 23,400 43,800



Exclusions in Aviva Dhan Nirman Plan

  • If the policyholder commits suicide within a year of policy issuance 80% of the premiums paid would be returned and no death benefit would be payable.
  • If suicide is committed within a year of policy revival, higher of 80% of the premiums paid till death or the Surrender Value acquired would be paid provided the policy is in force.


Non-Payment of premium in Aviva Dhan Nirman Plan

Premiums have to be paid for at least 2 years otherwise the policy would lapse without accruing any benefits if it is not revived within the revival period. After the first 2 years’ premiums and have been paid and later premiums are not paid, the policyholder can surrender the policy or make it paid-up.

Making the policy Paid-up

If at least2 full years’ premium has been paid, the policy would become a paid-up policy if future premiums are not paid. The benefits under the plan would be reduced and would be called Paid-up benefits. Future bonuses would not be declared under the plan
  • Death Benefit – Paid-up Sum Assured + vested reversionary bonuses + Terminal Bonus if any
    Paid-up Sum Assured = Death Sum Assured * (number of premiums paid/ number of premiums payable)
  • Survival Benefits – If the policy has lapsed and the premium payment term is also completed, the policy accrues regular annual payouts. The payouts under a lapsed policy would be calculated as follows:
    150% of the annual premium * (number of premiums paid/ number of premiums payable)
  • Maturity benefit – On maturity, the following Paid-up value along with the vested reversionary bonuses and any Terminal Bonus would be paid to the policyholder:
Policy term Maturity Sum Assured
18 years 8 times the annual premium * (number of premiums paid/ number of premiums payable)
21 years 7 times the annual premium* (number of premiums paid/ number of premiums payable)
25 years 6 times the annual premium *(number of premiums paid/ number of premiums payable)
30 years 5 times the annual premium *(number of premiums paid/ number of premiums payable)



Surrendering the policy

Surrender is allowed only after the policy becomes paid-up, i.e. after 2years’ premiums have been paid. On surrendering the policy, higher of the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV) would be paid.
  • GSV = {(Basic Premium paid excluding taxes * GSV Factor) – survival benefits already paid} + {GSV Factor of bonus * vested reversionary bonus}
  • The SSV factors would be declared by the company based on its performance and would be calculated as follows:
    SSV = [{Total benefits payable * (number of premiums paid/ number of premiums payable)} + vested reversionary bonuses – Survival benefits already paid] * SSV Factor
The total benefits payable would depend on the plan tenure and would be calculated as follows:
 
Policy term Maturity Sum Assured
18 years 14 times the annual premium
21 years 16 times the annual premium
25 years 19.50 times the annual premium
30 years 23 times the annual premium



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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