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Max Life Online Term Plan Plus

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Max Life Online Term Plan Plus

Max Life Online Term Plan Plus is another plan which is popular with customers. Being a term insurance plan, it offers large cover at low premiums. The plan is aggressively priced and offers 3 basic variants. Of course, you can add riders to make the term plan very comprehensive.

 

Our expert  Deepak Yohannan's thoughts on Max Life Online Term Plan Plus Plan. 




The plan has 3 variants to choose from:
  1. Basic Life Cover - Nominee will get the Sum Assured on death of the policyholder
  2. Basic Life Cover + Monthly Income - Nominee will get the Sum Assured on death of the policyholder + nominee will get a monthly income of 0.4% of Sum Assured for the next 10 years
  3. Basic Life Cover + Increasing Monthly Income - Nominee will get the Sum Assured on death of the policyholder + nominee will get a monthly income of 0.4% of Sum Assured for the next 10 years. The monthly income increases by 10% simple interest every year.
We will understand these variants better with the help of examples later.

All the above variants have these attractive additional benefits which can be taken to make the plan more comprehensive and offers you some flexibility. You may need to pay extra premiums for these benefits.
 
  1. Pay til 60 - You can choose to pay till the age of 60 years and enjoy the life cover till the end of the policy term. Basically make premium payments only in your working days and enjoy the cover without any financial burden in your retirement days. Good option in my opinion. 
  2. Option to increase cover amount at important milestones - You have the option to increase your life cover once you are married, when you have children or when you are taking a home loan. This option needs to be selected at the time of making the purchase. Then as and when you increase the cover, additional premium would be calculated basis your age and amount of additional cover.
  3. Accelerated Critical Illness Benefit - On being diagnosed with a list of 40 critical illnesses, you will get 50% of the Sum Assured (max 50 lakhs) and the balance cover will continue. You don’t have to pay any of the future premiums. I strongly recommend taking this.


Key Features

  • Completely online application process
  • Choice of 3 death benefit options
  • Choice of Max Life Comprehensive Accident Benefit Rider and Max Life Waiver of Premium Plus Rider
  • Tax benefits on premiums paid u/s 80C
COMPARE THIS PLAN WITH OTHER TERM PLANS
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Key Benefits

  • Death Benefit:The death benefit under Max Life Online Term Plan Plus is highest of:
    • 10 times the annualised premium
    • 105% of all the premiums paid as on date of death
    • Minimum guaranteed sum assured on maturity
    • Absolute amount assured to be paid on death
      Under this Plan, the ‘Minimum guaranteed sum assured on maturity’ is zero. Further, absolute amount assured to be paid on death will depend on the Death Benefit option chosen by the Life Insured at inception of the policy.
      • Option 1) Sum Assured:100% of the policy Sum Assured as chosen at inception of the Policy, paid immediately on death of Life Insured.Effective Total Protection Value: 100% of Sum Assured
      • Option 2) Sum Assured plus Level Monthly Income:100% of the policy Sum Assured as chosen at inception of the Policy, paid immediately on death of Life Insured.Plus
        0.4% of the policy Sum Assured per month, for 10 years 
        Effective Total Protection Value: 148% of Sum Assured
      • Option 3) Sum Assured plus Increasing Monthly Income:100% of the policy Sum Assured as chosen at inception of the Policy, paid immediately on death of Life Insured.
        Plus
        Increasing monthly income for 10 years wherein the first year monthly income shall be 0.4% of the policy sum assured and shall increase every year by 10% p.a. (simple interest) of the first year monthly income.
        For e.g.: A policy with Sum Assured of Rs. 1,00,00,000 is sold on 10 January 2016 and the Life Insured dies on 25th June 2016. In this case, the first monthly income will be paid on 10th January 2017 (i.e. the first Policy Anniversary post the date of death of the Life Insured) and thereafter on 10th of each month, for a period of 10 years. 
        Effective Total Protection Value: 169.6% of Sum Assured

Following table illustrates the monthly income payable to the beneficiary:

 

Time Period Monthly Income payable on 10th of each month
10 Jan 2017 till 10 Dec 2017 Rs. 40,000
10 Jan 2018 till 10 Dec 2018 Rs. 44,000
10 Jan 2019 till 10 Dec 2019 Rs. 48,000
10 Jan 2020 till 10 Dec 2020 Rs. 52,000
10 Jan 2021 till 10 Dec 2021 Rs. 56,000
10 Jan 2022 till 10 Dec 2022 Rs. 60,000
10 Jan 2023 till 10 Dec 2023 Rs. 64,000
10 Jan 2024 till 10 Dec 2024 Rs. 68,000
10 Jan 2025 till 10 Dec 2025 Rs. 72,000
10 Jan 2026 till 10 Dec 2026 Rs. 76,000

Notes:The monthly income will be payable each month on the anniversary date, starting from the first Policy Anniversary post the date of death of the Life Insured.
For e.g.: A policy is sold on 10 January 2016 and the Life Insured dies on 25th June 2016. In this case, the first monthly income will be paid on 10th January 2017 (i.e. Policy Anniversary following the date of death of the Life Insured) and thereafter on 10th of each month, for a period of 10 years.

Under ‘Option 2 – Sum Assured plus Level Monthly Income’ and ‘Option 3 - Sum Assured plus Increasing Monthly Income’ mentioned above, you have the option to commute the outstanding income payments at any point in time. You will have to submit a written request for the same to the Company. On receipt of such a request, the Company shall pay present value of all future monthly incomes discounted at the rate of 5.5% p.a. to you.
  • Maturity Benefit:There is no maturity benefit or surrender benefit under the plan.
  • Tax Benefit:Premiums paid towards this plan up to Rs.1,50,000 will be entitled to benefits under Sec 80C of the Income Tax Act.
    The proceeds on and after death of the policyholder to the nominee will be tax exempted under Sec 10(10D).

HAVE ANY DOUBTS THAT NEED TO BE CLARIFIED?

 


Riders

The following riders are available with Max Life Online Term Plan Plus:
  • Max Life Comprehensive Accident Benefit Rider: This rider provides additional cover by way of rider Sum Assured in case of Death or Dismemberment (impairments are listed under the Rider contract) due to accident. This rider needs to be added at the time of purchase of the base policy.
  • Max Life Waiver of Premium Plus Rider: Get waiver of all future premiums under a policy and all other attaching riders on happening of earlier of either of the following events provided the base policy and attaching riders are in force:
    Critical Illness; or
    Dismemberment; or
    Death (only when Life Insured and Policyholder are different individuals, rider benefit will be paid on death of the Policyholder)
Note:
1) Total rider premium cannot be more that 100% of the base plan’s premium (including extra premium, if any)
2) Under Comprehensive Accident Benefit Rider, the rider Sum Assured cannot exceed base plan’s Sum Assured.


Eligibility and other Conditions

  Minimum Maximum
Entry Age 18 years Regular Pay - 60 years
Pay till 60 - 50 years
Maximum maturity Age 85 years
Annual Premium Rs.2,200 Rs. 2,18,44,600
Sum Assured 25 lacs 100 crores
Policy Term 10 50
Premium Payment Term Same as policy term
Premium Modes Yearly, Half-yearly, Quarterly and Monthly
 

So let us understand this plan better with the help of a few examples.

# 01 - Basic Life Cover

Suppose Sooraj Nath from Mumbai has taken this plan with Basic Life Cover. He does not consume any form of tobacco.

Age - 30 years
Cover Amount - 1 crore
Policy Term - 35 years

His annual premium will be Rs. 9,204 which he has to pay for 35 years.

Benefits under this option are:

  • Lumpsum payment on Death - Sooraj’s nominee will get Rs. 1 crore in case he dies anytime during the policy term and the policy is terminated.


# 02 - Basic Life Cover + Monthly Income

Suppose Sooraj Nath from Mumbai has taken this plan with Basic Life Cover + Monthly Income. He does not consume any form of tobacco.

Age - 30 years
Cover Amount - 1 crore
Policy Term - 35 years

His annual premium will be Rs. 12,272 which he has to pay for 35 years.

Benefits under this option are:

  • Lumpsum payment on Death - His nominee will get Rs. 1 crore in case he dies anytime during the policy term and the policy is terminated.
  • Monthly Income - His nominee will get Rs. 40,000 every month for the next 10 years.


# 03 - Basic Life Cover + Increasing Monthly Income

Suppose Sooraj Nath from Mumbai has taken this plan with Basic Life Cover + Increasing Monthly Income. He does not consume any form of tobacco.

Age - 30 years
Cover Amount - 1 crore
Policy Term - 35 years

His annual premium will be Rs. 13,570 which he has to pay for 35 years.

Benefits under this option are:

  • Lumpsum payment on Death - His nominee will get Rs. 1 crore in case he dies anytime during the policy term and the policy is terminated.
  • Monthly Income - His nominee will get the following monthly income for the next 10 years.
 
Year 1 Rs. 40,000 monthly
Year 2 Rs. 44,000 monthly
Year 3 Rs. 48,000 monthly
Year 4 Rs. 52,000 monthly
Year 5 Rs. 56,000 monthly
Year 6 Rs. 60,000 monthly
Year 7 Rs. 64,000 monthly
Year 8 Rs. 68,000 monthly
Year 9 Rs. 72,000 monthly
Year 10 Rs. 76,000 monthly


In case, the nominee wishes to get the future payments in lumpsum, that too can be done. The present value of all future payments discounted @ 5.25% will be paid out.


# 04 - Basic Life Cover with Pay till 60 option

Suppose Sooraj Nath from Mumbai has taken this plan with Basic Life Cover + Pay till 60 option. He does not consume any form of tobacco.

Age - 30 years
Cover Amount - 1 crore
Policy Term - 35 years
Premium Payment Term - 30 years

His annual premium will be Rs. 9,676 which he has to pay for 30 years. He does not need to pay premiums for the balance 5 years of his term. So no payment after retirement age.

Benefits under this option are:
  • Lumpsum payment on Death - Sooraj’s nominee will get Rs. 1 crore in case he dies anytime during the policy term and the policy is terminated.

# 05 - Basic Life Cover with Option to increase cover at important milestones

Sooraj will have to select this option at the time of making the purchase. He will then have the option of increasing the cover in the event of any or all of the following:
  • Marriage (only once!) - can increase by 50% of Sum insured; Max 50 lakhs
  • Child Birth (twice only) - can increase by 50% of Sum insured; Max 25 lakhs for each child birth
  • Home loan (only once) - can increase by 50% of Sum insured; Max 50 lakhs
The following conditions will have to be met while availing this option:
  • Your base policy should be of 50 lakhs or more
  • You should have paid 3 years of premiums continuously
  • You have to avail this before you complete 45 years of age (last birthday)
  • Only 1 increase can be done in a year
  • You have to increase the cover each time by at least 25 lakhs
  • The overall increase is capped at 50 lakhs
  • No medical tests required when you do this increase

# 06 - Basic Life Cover with Accelerated Critical Illness Benefit

Suppose Sooraj Nath from Mumbai has taken this plan with Basic Life Cover + Accelerated Critical Illness Benefit. He does not consume any form of tobacco.

Age - 30 years
Cover Amount - 1 crore
Policy Term - 35 years
Critical Illness Cover - 10 lakhs (He can choose upto 50 lakhs of cover).

His annual premium will be Rs. 12,886 which he has to pay for 35 years. 

Benefits under this option are:
  • Lumpsum payment on Death - Sooraj’s nominee will get Rs. 1 crore in case he dies anytime during the policy term and the policy is terminated.
  • Accelerated Critical Illness Benefit - Sooraj will get a lumpsum payment of Rs. 10 lakhs in case he is diagnosed with any of the 40 critical illness listed below. The balance 90 lakhs cover will continue with a reduced premium value. Also note the following:
    • In case of angioplasty only 5 lakhs is payable
    • This benefit is applicable only till the age of 75 years
    • The benefit is applicable for a maximum of 40 years
    • There is a waiting period of 90 days for this benefit

Click here for the list of 40 Critical Illness covered in Max Life Online Term Plan Plus Accelerated Critical Illness Benefit.

If you have any questions on this plan, please comment below and we will be happy to share our thoughts.

Additional Details

Surrender

The policy does not acquire any Surrender Value throughout the Policy Term and therefore there is no amount payable to you upon surrender.


Revival

A lapsed policy can be revived by you within 2 years from the due date of the first unpaid installment of the premium and before the expiry of policy term. The revival of policy shall take effect only after approval by the Company as per the Company’s Board approved Underwriting Policy and will be communicated to you in writing, only if:
i) You give us a written request;
ii) You produce an evidence of insurability of Life Insured acceptable to us and bear the cost for the same; and
iii) You pay all overdue Premiums with late payment fee and/or interest at such rates as may be determined by the Company from time to time.

Grace Period

A grace period of thirty (30) days from the due date for payment of each premium will be allowed for all premium paying modes except for monthly mode, where a grace period of only fifteen (15) days will be allowed. During the grace period, the Company will accept the premium without interest.

Free Look Period

The company offers a period of thirty (30) days from the date of receipt of the policy document, to review the terms and conditions of the policy, where if you disagree to any of those terms and conditions, you have the option to return the policy stating the reasons for your objection. The premium paid will be refunded to the policyholder post a deduction of a proportionate risk premium for the period of cover and the expenses incurred by the Company on medical examination of the life insured and stamp duty charges.

 
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