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MetLife College Plan

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MetLife College Plan Review

MetLife College Plan is a traditional, participating Money Back Child Plan designed for a child’s education. The plan provides financial assistance through insurance cover and savings so that the policyholder can fund his child’s education easily.


Highlights of the MetLife College Plan

  • This is a traditional Endowment Plan wherein simple reversionary bonuses are declared.
  • Premiums for the plan are payable for the entire chosen tenure.
  • The plan also acts as a Money back Plan where benefits are paid out in the last three years of the plan tenure so that the child’s education can be funded.
  • Simple reversionary bonuses and Terminal Bonus enhance the benefits payable under the plan.


Working of the MetLife College Plan

  • The policyholder chooses the amount of premium he wishes to pay for the plan and the plan tenure. Based on the premium amount, age and tenure, the Sum Assured multiple and the Base Sum Assured are calculated.
  • Premiums are payable for the entire plan duration.
  • Bonuses accrue from the 3rd year of the plan.
  • On death during the period, the death benefit is paid.
  • On maturity, the maturity benefit is paid.
  • Survival Benefits are paid in the last three years of the plan.


COMPARE THIS PLAN WITH OTHER CHILD PLANS



Benefits and Features of MetLife College Plan

  • Maturity Benefit – When the plan matures and the premiums have been duly paid, the Maturity Sum Assured along with the simple reversionary bonuses and any Terminal Bonus will be paid to the policyholder. The Maturity Sum Assured would be equal to 40% of the base Sum Assured chosen at plan inception.
  • Death Benefit – If the insured dies during plan term and the policy is in force, the death benefit payable would be the Death Sum Assured + accrued reversionary bonuses + Terminal Bonus (If any).
    The Death Sum Assured under the plan would be higher of the following:
    • Base Sum Assured
    • 10 times the annual premium paid
    • Minimum guaranteed Sum Assured on Maturity
    • 105% of all premiums paid till death
      After the death benefit is paid, future premiums would be waived off and paid for by the company. The policy would continue till the maturity date and the Survival Benefits and Maturity Benefit would accrue under the plan. The Maturity Benefit payable would be 40% of the Sum Assured and bonuses which are declared after the death of the insured. A Terminal Bonus might also be declared and paid under the plan.
  • Survival Benefits – In the last three years of the plan tenure, if the due premiums have been paid and the policyholder is alive, 20% of the Sum Assured is paid as Survival Benefits.
  • Bonus – Simple reversionary bonuses are declared under the plan which are added from the third policy year if due premiums are paid. These bonuses are expressed as a percentage of the Sum Assured. A Terminal Bonus may also be declared and added by the insurer on maturity or death. Terminal Bonus accrues after the 5th policy year and is expressed as a percentage of the accumulated simple reversionary bonus.
  • Loan –Loan can be taken on the policy after the policy has acquired a Surrender Value. The maximum amount of loan available is 90% of the acquired Special Surrender Value net of any unpaid premiums. The loan would also attract interest @10.50% per annum.
  • 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 received would also be tax exempt under Section 10(10D) of the Income Tax Act.


Eligibility Criteria of MetLife College Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
  Minimum Maximum
Entry age (Last Birthday) 20 years 45 years
Maturity Age (Last Birthday) NA 69 years
Plan tenure 12 years 24 years
Premium payable Yearly – Rs.18,000
Other modes – Rs.30,000
Rs.42,44,482
Premium Paying Term (PPT) Equal to plan term
Sum Assured Rs.2,12,040 Rs.5 crores
Premium payment mode Monthly, quarterly, half-yearly and annually



Additional Benefits of MetLife College Plan

  • Riders – The plan does not have any riders available.
  • 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 mode, the allowed period 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


Premium Illustration

The following chart shows the Base Sum Assured available corresponding to the premium amount, age and tenure chosen by the policyholder.



The Sum Assured levels are also tabulated hereunder for a quick reference:
Age Premium - Rs.20,000 Premium - Rs.30,000 Premium – Rs.50,000
Term - 15 years Term - 20 years Term - 15 years Term - 20 years Term - 15 years Term - 20 years
35 years 310,000 416,800 465,000 625,200 775,000 1,042,000
45 years 295,000 386,200 442,500 579,300 737,500 965,500



Exclusions in MetLife College Plan

  • If the insured commits suicide within a year of policy issuance, 80% of the premiums paid would be refunded and the policy would become void.
  • 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 MetLife College Plan

Non-payment of premiums results in lapsing of the plan wherein no benefits are payable. If, however, the premiums for at least the first 3 years have been paid, the plan allows reduced benefits. The policyholder can, under this situation, surrender the policy or make it paid-up.

Making the policy Paid-up

If at least3 full years’ premium has been paid, the policy would become a paid-up policy if future premiums are not paid. The Sum Assured under the plan would be reduced and the policy would acquire a reduced Paid-up Value which is calculated as follows:

Bonuses are not declared under a Reduced Paid-up Policy and the benefits payable are reduced and are as follows:
  • Death Benefit – The death benefit would be higher of the following:
    • Reduced Paid-up Death Sum Assured + accrued bonuses 
    • Minimum guaranteed Sum Assured on maturity which is equal to Reduced Paid-up Maturity Sum Assured
    • Absolute amount assured payable on death which is equal to the Reduced Paid-up Death Sum Assured
    • 105% of all premiums paid till death Reduced Paid-up Death Sum Assured = {Death Sum Assured *(number of premiums paid/total number of premiums payable)}
      Reduced Paid-up Maturity Sum Assured = {Maturity Sum Assured *(number of premiums paid/total number of premiums payable)}
      After the payment of the reduced Paid-up Death Benefit, the policy would be terminated.
  • Survival Benefit – 20% of the reduced Paid-up Sum Assured would be paid as Survival Benefits in the last 3 years of a paid-up policy. The reduced Paid-up Sum Assured would be calculated as follows:
    Reduced Paid-up Sum Assured = {Base Sum Assured *(number of premiums paid/total number of premiums payable)}
  • Maturity Benefit – The Reduced Paid-up Maturity Sum Assured and accrued bonuses would be paid on maturity.


Surrendering the policy

Surrender is allowed only after the policy becomes paid-up, i.e. after3 full years’ 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)+ (discounted value of accrued bonuses)
  • The SSV factors would be declared by the company based on its performance 


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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