Max New York Life College Plan

Max New York Life College Plan is a Guaranteed Return Plan; in fact it is a Traditional Money Back Child Plan such that the life of the child is insured.

The premium needs to be paid till the child is 18 years of age. Then the policy rights are transferred to the child and he starts to receive the Survival Benefits till the policy matures when he is 21 years old.

If the parent dies within the policy tenure, the premiums need to be continued since the life of the child is insured. However, if the Payor Rider has been opted for and the payor, i.e. the parent meets with death or total and permanent disability within the policy tenure, then the future premiums are paid by the insurance company.

But if the child meets with death before he is 7 years old, then only the premiums paid till date are returned. If the child dies after he is 7 years old, Sum Assured plus accrued Reversionary Bonus plus Terminal Bonus, if any, would be paid and the policy would be terminated.

• This is a Traditional Money Back Plan where the life of the child is insured and the policy vests with the child when he is 18 years of age.
• Premium needs to be paid only till the child is 18 years of age.                              
• Risk on the child’s life commences after he is 7 years old.
• There is an additional Payor Rider available, where the company would pay the premiums on behalf of the parent, if he meets with death or total and permanent disability.
• This policy provides for Bonus from second year onwards and is even eligible for Terminal Bonus on Maturity, if declared.

Death Benefit – In case of death of the Life Insured, i.e. the child, the Death Benefit would be paid and the policy would be terminated

• When age of child <7 years, Death Benefit = Total Premiums paid till date
• When age of child >=7 years, Death Benefit = Sum Assured + accrued Reversionary Bonus + Terminal Bonus, if any.

In case of death of the Payor, i.e. the Parent, the policy continues as before unless Payor Rider has been opted for, where the premiums are waived and paid by the Insurer.

Survival Benefit – Is provided as below:      

Maturity Benefit – On maturity i.e. at Age 21, the life insured would receive the remaining 40% of Sum Assured + Guaranteed Bonus + Terminal Additions (if any.

Income Tax Benefit - Life Insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable income each year under section 80C

Age of Parent = 33 years, Age of Child = 3 years

Now his policy period = 21 years –age of child = 18 years

Sum Assured = Rs.3,00,000,

Annual Premium is Rs.25438

Guaranteed Benefits:

When the Child is 18 years old = 40% of Sum Assured is paid = Rs 1,20,000

When the Child is 19 years old = 20% of Sum Assured is paid = Rs 60,000

When the Child is 20 years old = 40% of Sum Assured is paid = Rs 60,000

When the Child is 21 years old = 40% of Sum Assured is paid = Rs 1,20,000 + Bonus + Terminal Bonus

Riders – There are 1 additional rider available in this policy

• Payor Rider- If this rider has been opted for and the payor, i.e. the parent meets with death or total and permanent disability within the policy tenure, then the future premiums are waived off and paid by the insurer.

You stop paying the premium – The policy will lapse if the premium is not paid within the grace period. However, it can be revived within 3 years from the first unpaid premium.

You want to surrender the policy – If premiums for 3 years have been paid up, then surrender of policy is allowed.

Guaranteed Surrender Value = 30% of basic premiums paid – 1st year’s premium and additional premium paid (if any).

You want a loan against your policy - There is no loan available under this plan.