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TATA AIA Life Insurance Fortune Maxima Plan

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TATA AIA Life Insurance Fortune Maxima Plan Review

TATA AIA Life Insurance Fortune Maxima is a Unit Linked insurance Plan which provides life insurance coverage for the whole life of the insured and also provides market-linked returns.


Highlights of the TATA AIA Life Insurance Fortune Maxima Plan

  • This is a Unit Linked Plan which runs till the insured reaches 100 years of age.
  • Premiums under the plan can be paid either for a limited duration or once at the commencement of the plan.
  • The plan has six funds to choose from according to the policyholder’s investment strategy.
  • The policyholder can choose any of the 6 available funds or invest as per the pre-defined Enhanced SMART investment strategy available under the plan. 
  • Riders available under the plan enhance the coverage. 
  • Top-up premiums are allowed for enhancing the investment. 
  • Regular Loyalty Additions payable under the plan help to boost the Fund Value.


Working of the TATA AIA Life Insurance Fortune Maxima Plan

  • The policyholder decides on the amount of annual premium he wants to pay, the premium payment term and mode and the investment strategy.
  • If the policyholder wants to invest as per his strategy, there are five available funds for investment which are as follows:
    • Large Cap Equity Fund
    • Whole Life Mid Cap Equity Fund
    • Whole Life Aggressive Growth Fund 
    • Whole Life Stable Growth Fund
    • Whole Life Income Fund
    • Whole Life Short-Term Fixed Income Fund 
  • The premium paid, net of the applicable allocation charge is invested based on the policyholder’s investment strategy.
  • Under the enhanced Systematic Money Allocation and Regular Transfer (SMART) strategy, the policyholder chooses between a debt fund and an equity fund. The net premium is first parked in the chosen debt fund. From there, the money is systematically transferred to the selected equity fund. This strategy protects the entire investment from market volatility as the entire investment is not subject to equity exposure. This feature is available for single pay and annual pay plans. 
  • 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.


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Benefits and Features of TATA AIA Life Insurance Fortune Maxima Plan

  • Maturity Benefit – On maturity, the Fund Value including the Loyalty Addition would be paid to the policyholder. 
  • Death Benefit – If the insured dies when the plan is in-force, higher of the following is paid as death benefit:
    • Sum Assured or 
    • Fund Value as on the date of death or
    • 105% of the total premiums paid till death or
    • 10 times the annual premium
      Furthermore, higher of the following, if applicable, is also paid on death:
    • Top-up Sum Assured
    • Top-up premium Fund Value
    • 105% of the top-up premiums paid
      If the insured dies before attaining 60 years of age, the Sum Assured would be reduced by the amount of partial withdrawals made in the two years immediately preceding death
      If the insured dies after crossing 60 years of age, the Sum Assured would be reduced by the amount of partial withdrawals made from the Fund Value in the two years before attaining 60 years and all withdrawals made after attaining 60 years.
  • Loyalty Additions – For limited pay plans, Loyalty Additions are added @ 0.20% of the available Fund Value every year from the 11th policy year and till the end of the plan tenure. For Single Pay plans, the rate of Loyalty Additions is increased to 0.35% of the Fund Value and these additions start from the 6th policy year and continue till the end of the term. Loyalty Additions are added only when premiums are paid as and when they are due. 
  • Bonus – Being a ULIP plan, bonus is not declared.
  • 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 TATA AIA Life Insurance Fortune Maxima Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
  Minimum Maximum
Entry age (Last Birthday) 30 days 60 years
Maturity Age (Last Birthday) NA 100 years
Plan tenure (100 – entry age) years
Premium payable Single Pay – Rs.1 lakh
Limited Pay – Rs.50,000
Rs.5 lakhs
Premium Paying Term Single Pay or Limited Pay of 7-10, 15 or 20 years
Sum Assured Single Pay – 1.25 times the single premium
Limited Pay – higher of 10 times the annual premium or 0.5*term*annual premium where the term would be (70-entry age)
Premium Paying Mode Yearly, half-yearly, quarterly and monthly or Single Pay



Applicable charges in TATA AIA Life Insurance Fortune Maxima 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 the annual premium before the premium is credited into the fund. The charge is equal to 3% of the single premium paid for Single Pay plans and 1.5% of top-up premiums. For limited pay plans, the allocation charge is as follows:
Policy year Premium Allocation Charge
1 6%
2 6%
3 to 5 5.50%
6 to 7 4.50%
8 to 10 3.50%
11 and above 2%
 
  • Policy Administration Charge – A monthly charge is deducted from the fund value at the start of each month every year and is expressed as a percentage of the annual premium. The charge is 0.90% of the premium per annum for Single Pay plans and 0.75% of the annual premium per annum for limited pay plans. 
  • 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
Large Cap Equity Fund 1.20%
Whole Life Mid Cap Equity Fund 1.20%
Whole Life Aggressive Growth Fund 1.10%
Whole Life Stable Growth Fund 1.00%
Whole Life Income Fund 0.80%
Whole Life Short-Term Fixed Income Fund 0.65%
 
  • Discontinuance Charge – Applicable if the plan is surrendered before the lock-in period of 5 years. The charges are:
Year of Discontinuance Single Pay Plans Limited Pay Plans
1 Lower of 1% of single premium or Fund Value up to a maximum of Rs.6000 Lower of 6% of annual premium or Fund Value up to a maximum of Rs.6000
2 Lower of 0.50% of single premium or Fund Value up to a maximum of Rs.5000 Lower of 4% of annual premium or Fund Value up to a maximum of Rs.5000
3 Lower of 0.25% of single premium or Fund Value up to a maximum of Rs.4000 Lower of 3% of annual premium or Fund Value up to a maximum of Rs.4000
4 Lower of 0.10% of single premium or Fund Value up to a maximum of Rs.2000 Lower of 2% of annualpremium 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, the policyholder’s age and gender.


Additional Benefits of TATA AIA Life Insurance Fortune Maxima Plan

  • Riders – Three additional riders are available under the plan which includes TATA AIA Life Insurance Waiver of Premium Rider, TATA AIA Life Insurance Waiver of Premium Plus (Linked) Rider and TATA AIA Life Insurance Accidental Death and Dismemberment (Long scale) ADDL Linked Rider. While all the three riders are available for limited pay plans, only the last rider can be taken with single pay plans. 
  • Partial Withdrawals –Four partial withdrawals are allowed in the plan after a completion of 5 policy years if the insured is above 18 years of age. The minimum amount of partial withdrawal is Rs.5000 and the maximum allowed withdrawal amount is such that the Fund Value after withdrawal should not be less than one annual premium.
  • Switching –Switching between the different funds is allowed only in the self-managed investment portfolio and not in the SMART investment option. The first 12 switches in a policy year are free of cost after which a charge of Rs.100 per switch would be applicable. 
  • Top-ups – Extra premiums can be invested in the plan through the option of top-ups. A minimum of Rs.5000 would be accepted as top-up premiums. The Sum Assured also increases and the top-up Sum Assured is 1.25 times the top-up premium if age of the insured is lower than 45 years and 1.1 times the premium if the age is 45 years and above. 
  • Premium Redirection – Future premiums can be redirected to be invested in another fund once in one policy year. Subsequent premiums would then be invested as per the revised redirected allocation. Premium Redirections can be done only in self-managed investment portfolios as the SMART portfolio does not allow such redirection.
  • Grace Period – A grace period of 30 days is allowed for annual, half-yearly and quarterly payment of premium and 15 days for monthly mode of premium payment.
  • Free Look Period – A cooling off period or a free look period of 15 days(30 days for distance 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


Exclusions in TATA AIA Life Insurance Fortune Maxima Plan

  • If the policyholder commits suicide anytime during the plan tenure, the available Fund Value would be paid to the nominee.


Non-payment of premiums in TATA AIA Life Insurance Fortune Maxima Plan

Premiums are required to be paid for the stipulated tenure of 5 years. If the premiums are not paid the policy would lapse. The policyholder can revive the lapsed policy by paying the due premiums or surrender the policy and avail the Surrender Value


Surrendering the policy

  • Within the first 5 policy years
The policy has a 5 year lock-in period. If the policy is surrendered within the first 5 years, the funds in the Fund Value would be transferred to the Discontinued Policy Fund net of the applicable charges where it 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. The option of making the policy paid-up is also possible in limited pay plans if the premiums are paid for the first 5 years. Under the paid-up state, the policy runs on a Reduced Sum Assured which is calculated as follows:

Base Sum Assured * (number of premiums paid/total number of premiums payable)


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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