Aviva iGrowth Plan
Aviva iGrowth Plan Review
Aviva iGrowth Plan is a Unit Linked Plan which has dual benefits. The plan invests the premiums in the market which provides attractive returns and also provides life insurance coverage for security purposes.
Key Features
This is a Unit Linked Plan which is available online without undergoing any medical check-ups. The plan can be purchased by simply submitting a Declaration of Good Health.
Premiums under the plan are payable for the entire tenure of the plan.
Loyalty additions are added to the Fund Value in the last three policy years.
There is an inbuilt accidental death benefit option under the plan which pays an additional Sum Assured in case of accidental death.
The plan has an option of 3 funds for investments according to the policyholder’s risk appetite.
Benefits
On maturity, the Fund Value available on the maturity date would be paid to along with the Loyalty Additions accrued under the policy.
In case of death of the insured, higher of the following would be payable as death benefit along with the accrued Loyalty Additions:
- Sum Assured
- 105% of the total premiums paid till death
- Fund Value as on the date of death
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 dies due to accident, in addition to the above benefits, an additional Sum Assured would be paid which would be equal to the base Sum Assured subject to a maximum of Rs.50 lakhs.
Being a ULIP plan, bonus is not declared.
- The plan accumulates Loyalty Additions in the last 3 years of the policy if regular premiums are being paid under the plan. The rate of the Additions would depend on the plan tenure and is as follows:
| Policy tenure | Rate of Loyalty Additions |
| 10 years | 1.25% |
| 15 years | 2.70% |
| 20 years | 3% |
Loan is not available under the plan.
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.
Apart from the inbuilt Accidental Benefit Rider, no other riders are available with the plan.
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.
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 maximum of Rs.500. The minimum amount of switching and the amount in the fund after switching should be Rs.5000
This facility enables the policyholder to redirect subsequent premiums to another chosen fund. Two redirections are allowed in a year after which the minimum allocation in the chosen fund should be 10%.
Reduction of Sum Assured – The policyholder can reduce the chosen Sum Assured only after 3 years of the plan inception. This reduction is allowed if the chosen Sum Assured initially was 20 times the premium in which case the reduced Sum Assured would become 10 times the annual premium.
Grace Period – A grace period of 30 days is allowed for annual, half-yearly and quarterly payment of premium and 15 days for monthly mode of premium payment.
Free Look Period – A cooling off period or a free look period of 30 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
How it works
- The policyholder decides on the premiums he wants to pay and the fund in which the premiums are to be invested.
- There are 7 fund options to choose from which are:
- Balanced Fund II
- Bond Fund II
- Enhancer Fund II
- 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.
Applicable charges in Aviva iGrowth 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 | Policy tenure 10 and 15 years | Policy tenure 20 years |
| 1 to 4 | 5.00% | 4.00% |
| 5 | 4.50% | 3.00% |
| 6 onwards | Nil | Nil |
- Policy Administration Charge – A monthly charge of 0.10% of the annual premium is deducted from the fund value at the start of each month in the first five policy years after which the charge increases to 0.30% of the annual premium. In both 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 |
| 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 alteration or any other miscellaneous service a charge of Rs.100 would be applicable.
Let's Understand The Plan With An Example:
Please note:
Minimum premium is Rs.35,000 and maximum age is 18 years and maximum age is 50 years
The value with assumewd rates of returns@4% and 8% p.a. are not guaranteed and they are not the upper or lower limits of returns of the 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.
Eligibility
The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
| Minimum | Maximum | |
| Entry age (Last Birthday) | 18 years | 50 years |
| Maturity Age (Last Birthday) | NA | 60 years |
| Plan tenure | 10, 15 or 20 years | |
| Premium payable | Rs.35,000 | Rs.5 lakhs |
| Premium Paying Term | Equal to plan tenure | |
| Sum Assured | 10 or 20 times the annual premium subject to a minimum of Rs.3.5 lakhs | Ages 18-40 years – 50 lakhs Ages 41 to 50 years – 30 lakhs |
| Premium payment mode | Monthly, quarterly, half-yearly, yearly | |
Surrender Value
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
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 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.
Exclusions
- 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.
Claim Process
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.
