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TATA AIA Life Insurance Invest One Plan

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TATA AIA Life Insurance Invest One Plan Review

TATA AIA Life Insurance Invest One Plan is a Unit Linked Insurance plan where only one-time premium is required. The plan participates in capital markets to yield attractive returns and also provides life insurance coverage.


Highlights of the TATA AIA Life Insurance Invest One Plan

  • This is a Single Premium Unit Linked insurance Plan which also provides life insurance protection. 
  • The plan has eight funds to choose from according to the policyholder’s investment strategy.
  • There are also two strategies of investment. One is the Protect Returns of Funds Increased Over Time (PROFIT) and the other is the Enhanced Automatic Asset Allocation Plus (Enhanced AAAP).
  • Top-ups can be paid to increase the Fund Value.
  • Loyalty Additions and Guaranteed Maturity Additions increase the Fund Value.


Working of the TATA AIA Life Insurance Invest One Plan

  • The policyholder decides on the amount of single premium he wants to pay, the plan term, the life cover and the investment strategy. 
  • The policyholder can either choose to invest the premium in any of the available fund choices or adopt one of the two available investment strategies of PROFIT and Enhanced AAAP. 
  • There are eight available finds for investment which are as follows:
    • Multi Cap Fund 
    • India Consumption Fund 
    • 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.
  • The Enhanced Automatic Asset Allocation Plus Strategy allocates the premium between the Large Cap Equity Fund and the Whole Life Income Fund. The allocation depends on the age of the insured. This option transfers the investment into the safer Whole Life Income Fund as age progresses to reduce risk exposure. 
  • Under the Protect Return of Funds Increased Over Time (PROFIT) option of investment strategy, the funds would be invested in any one of the equity oriented profit making fund. Once the target level of 30% over the investment made is reached, the fund would be redirected to debt-oriented profit booking funds as chosen by the policyholder. This strategy aims to protect the returns generated from market volatility. 
  • 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 Invest One Plan

  • Maturity Benefit – On maturity, the Fund Value available on the maturity date would be paid to the policyholder. The policyholder can avail the maturity benefit in equal installments over a period of 5 years starting from the year of maturity. This feature is available under the Settlement Option feature of the plan. 
  • Death Benefit – If the insured dies when the plan is in-force, higher of the chosen Sum Assured or Fund Value as on the date of death or105% of the single premium paid till death is paid as the death benefit. Furthermore, if any top-up premiums have been paid under the plan, highest of the top-up Sum Assured or top-up premium Fund Value or 105% of the top-up premiums paid till death would also be 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 – The plan is eligible for two Loyalty Additions. One is added every five years starting from the 10th policy year. The rate of this Loyalty Addition is 1% of the Fund Value. The second Loyalty Addition is added from the 10th policy year and thereafter every policy year except the year in which the plan matures. The rate of this addition is 0.4% of the existing Fund Value as on the date of additions. 
  • Guaranteed Maturity Additions – 5% of the available Fund Value is added as Guaranteed Maturity Additions when the plan matures. 
  • 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 in TATA AIA Life Insurance Invest One 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) 18 years 75 years
Plan tenure 15 years 30 years
Premium payable Rs.1 lakh No limit
Premium Paying Term Single Pay
Sum Assured 125% of the single premium paid 1.5 to 5 times the Single Premium Paid
Premium payment mode Single pay


Applicable charges in TATA AIA Life Insurance Invest One 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 single premium before the premium is credited into the fund. 2% of the single premium paid is deducted as the allocation charge and 1.5% is charged on the top-up premium.                     
  • Policy Administration Charge – A monthly charge of 1% of the Fund Value is deducted from the fund value at the start of each month during the plan tenure. The charge can be increased to 5% per annum subject to a maximum of Rs.6000. 
  • 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 per annum
Multi Cap Fund 1.20%
India Consumption Fund 1.20%
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%
Discontinued Policy Fund 0.50%
 
  • Discontinuance Charge – Applicable if the plan is surrendered before the lock-in period of 5 years. The charges are:
Year of Discontinuance Charge
1 Lower of 1% of single 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
3 Lower of 0.25% of single 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
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 Invest One Plan

  • Riders – TATA AIA Life Insurance Accidental Death and Dismemberment (Long scale) (ADDL) Linked Rider can be added to the policy for an enhanced coverage protection. 
  • Partial Withdrawals –Four partial withdrawals are allowed free of cost 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 50% of the Single Premium paid is maintained in the Fund Value after the withdrawal. 
  • Switching –12 free switches between the different funds are allowed in a policy year if no investment strategy is chosen by the policyholder. Any excess switching would be chargeable @Rs.100 per switch. Switching is not allowed under the Enhanced AAAP strategy while it is allowed with some restrictions in the PROFIT strategy. 
  • Top-ups –Additional premiums can be paid through top-up facility available under the plan. Top-ups can be done anytime except in the last 5 policy years. The minimum amount of a top-up should be Rs.5000. Top-ups would be eligible for a top-up Sum Assured which is 1.25 times the top-up premium for ages lower than 45 years and 1.1 times the top-up premium for ages 45 years and above. 
  • Grace Period – Being a single premium plan, Grace Period is not applicable. 
  • Free Look Period – A cooling off period or a free look period of 15 days(30 days through 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 Invest One Plan

  • If the policyholder commits suicide within 12 months after policy issuance, the available Fund Value would be paid to the nominee.


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.




 
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