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MetLife Endowment Savings Plan

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MetLife Endowment Savings Plan Review

MetLife Endowment Savings Plan is a traditional, participating Endowment Assurance Plan which aims to create savings for the policyholder. The policyholder can reap dual benefits of savings and insurance protection through the plan.


Highlights of the MetLife Endowment Savings Plan

  • This is a traditional Endowment Plan wherein simple bonuses are declared.
  • Premiums for the plan can be paid either for a limited tenure or for the complete duration of the plan as per the policyholder’s choice.
  • Simple reversionary bonuses enhance the benefits payable under the plan.

COMPARE THIS PLAN WITH OTHER ENDOWMENT PLANS

 


Working of the MetLife Endowment Savings Plan

  • The policyholder chooses the amount of premium he wishes to pay for the plan. Based on the premium amount, the Base Sum Assured is calculated.
  • The Base Sum Assured is calculated as follows:
    Annual Premium * Multiplier Factor
  • The Multiplier Factor depends on the age of the insured, the chosen plan tenure and the chosen premium payment tenure.
  • Premiums are to be paid for a limited tenure or for the complete duration of the plan.
  • 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.


Benefits and Features of MetLife Endowment Savings Plan

  • Maturity Benefit – When the plan matures and the premiums have been duly paid, the Sum Assured along with the simple reversionary bonuses and any Terminal Bonus will be paid to the policyholder. 
  • Death Benefit – If the insured dies during plan term and the policy is in force, the death benefit payable would be higher of the following:
    • Death Sum Assured + accrued reversionary bonuses + Terminal Bonus (If any)
    • 105% of all premiums paid till the date of death.
    The Death Sum Assured under the plan would be higher of the following:
    • Base Sum Assured
    • 10 times the annual premium paid.
  • Bonus – Simple reversionary bonuses are declared under the plan which are added from the third policy year if due premiums are paid. A Terminal Bonus may also be declared and added by the insurer on maturity or death. 
  • 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 @12% 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 Endowment Savings 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 PPT 5 years – 54 years
PPT 10 years or regular pay – 60 years
Maturity Age (Last Birthday) NA 75 years
Plan tenure PPT 5 years  and Regular Pay – 10 years
PPT 10 years – 15 years
PPT 5 years – 20 years
PPT 10 years – 25 years
Regular Pay – 30 years
Premium payable  
Premium Mode Regular Pay PPT 5 years PPT 10 years
Yearly Rs.15,000 Rs.24,000 Rs.30,000
Half-yearly Rs.12,000 Rs.12,000 Rs.15,000
Quarterly Rs.6000 Rs.6000 Rs.7500
Monthly Rs.2500 Rs.2500 Rs.5000
No limit
Premium Paying Term (PPT) 5 years, 10 years or equal to plan term
Sum Assured PPT 5 years – Rs.1.64 lakhs
PPT 10 years – Rs.2.54 lakhs
Regular Pay – Rs.1.45 lakhs
Rs.5 crores
Premium payment mode Monthly, quarterly, half-yearly and annually
 


Additional Benefits of MetLife Endowment Savings 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 premiums payable at different combinations of age, term and Premium Payment Term (PPT) given a Base Sum Assured level of Rs.10 lakhs.



The premium rates are also tabulated hereunder for a quick reference:
Age PPT 5 years PPT 10 years Regular Pay
Term - 15 years Term - 20 years Term - 15 years Term - 20 years Term - 15 years Term - 20 years
30 years 6,340 7,090 11,810 13,211 15,930 21,730
40 years 6,300 7,000 11,700 13,010 15,700 21,190
50 years 6,170 6,780 11,340 12,480 15,090 19,950



Exclusions in MetLife Endowment Savings 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 Endowment Savings Plan

Premiums have to be paid for at least 2 years if the Premium Paying Term is 5 years or 3 years for other Premium Paying Terms. After this compulsory period, the policyholder can surrender the policy or make it paid-up.

Making the policy Paid-up

If at least2 or 3 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:

Reduced Paid-up Value = {Base Sum Assured * (number of premiums paid/total number of premiums payable)} + accrued bonuses

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 calculated as follows:
    {Death Sum Assured *(number of premiums paid/total number of premiums payable)} + accrued reversionary bonuses
  • Maturity Benefit – The Reduced Paid-up Value would be paid on maturity.


Surrendering the policy

Surrender is allowed only after the policy becomes paid-up, i.e. after2 or 3 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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