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Aviva Live Smart Plan

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Aviva Live Smart Plan Review

Aviva Live Smart is a Unit Linked Insurance Plan where the policyholder can enjoy market linked returns along with getting life insurance protection too.


Highlights of the Aviva Live Smart Plan

  • This is a Unit Linked Plan which does not earn bonuses.
  • 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.
  • Loyalty Additions are added to the plan to enhance the fund value.


Working of the Aviva Live Smart 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 II
    • PSU Fund
  • 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.


COMPARE THIS PLAN WITH OTHER ULIP PLANS


Benefits and Features of Aviva Live Smart Plan

  • Maturity Benefit – On maturity, the Fund Value including any top-up Fund Value available on the maturity date would be paid to the policyholder along with the accrued Loyalty Additions.
  • Death Benefit – In case of death of the insured, the death benefit payable would be higher of Sum Assured or 105% of total premiums paid till death + Fund Value available under the plan.
    The death benefit would also include higher of the top-up Sum Assured or 105% of total top-up premiums paid + top-up Fund Value available under the plan.
    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 – Loyalty Additions are added to the Fund Value and are expressed as a percentage of the Fund Value. The additions are added from the 10th policy year and thereafter every 5 years provided the due premiums under the plan have been paid. The rare of Loyalty Additions added at different plan intervals are as follows:
Policy Term % of Fund Value added as Loyalty Addition
End of 10th year 0.75%
End of 15th year 0.75%
End of 20th year 1%
End of 25th year 1%
End of 30th year 1.50%
 
  • 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.


Eligibility Criteria of Aviva Live Smart 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 65 years
Plan tenure 15 years 30 years
Premium payable Rs.50,000 No limit
Premium Paying Term 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
Plan term * annual premium
Premium payment mode Yearly



Applicable charges in Aviva Live Smart 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 3%
 
  • 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 0.30% of the annual premium from the 6th year onwards. 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 Live Smart 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. 
  • 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.
  • Reduction of Sum Assured – The Sum Assured can be reduced if the policyholder has chosen the Sum Assured multiple which is higher than the minimum multiple allowed.
  • 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 can use this money to pay off your outstanding liabilities.

Please note:
Minimum Annual premium is Rs.50,000. The value with assumed rates of returns @4% and 8% p.a. 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 Live Smart 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 Live Smart 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 Paid-up Value or 105% of all premiums paid till death + Fund Value. Higher of any Top-up Premium Sum Assured or 105% of top-up premiums paid including the top-up Fund Value would also be payable.


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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