TATA AIA Life Insurance Money Back Plus Plan

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TATA AIA Life Insurance Money Back Plus Plan

TATA AIA Life Insurance Money Back Plus Plan is a traditional, participating Money Back Insurance plan where the Sum Assured is returned back in installments throughout the plan tenure while at the same time, full insurance coverage is provided by the plan.


Highlights of the TATA AIA Life Insurance Money Back Plus Plan

  • This is a traditional money-back plan where reversionary compound bonus and Terminal bonus are declared. 
  • The plan comes in three options depending on the plan tenure.
  • Premiums under the plan are payable only for a limited tenure which is half of the chosen plan tenure. 
  • An accidental rider is inbuilt in the plan for enhanced coverage.


Working of the TATA AIA Life Insurance Money Back Plus Plan

  • The policyholder chooses the Sum Assured and the plan option.
  • The plan option depends on the plan term and the corresponding premium paying term. Option 1 is for a term of 16 years and premium paying term of 8 years, Option 2 is for a term of 20 years and premium paying term of 10 years and Option 3 is for a term of 24 years and premium paying term of 12 years. 
  • Based on the above factors and the insured’s age, the premium amount is computed.
  • The Survival Benefits are paid depending on the plan option selected.
  • On death during the period, the death benefit is paid 
  • On maturity, the maturity benefit is paid.
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Benefits and Features of TATA AIA Life Insurance Money Back Plus Plan

  • Maturity Benefit – When the plan matures and the premiums have been duly paid, the Guaranteed Sum Assured on Maturity is paid. The Guaranteed Sum Assured on Maturity is expressed as a percentage of the Basic Sum Assured and depends on the plan option chosen. The following table shows the maturity benefit paid under the plan:
Plan Option Maturity Benefit payable
Option 1 – Term 16 years 50% of the Sum Assured + vested bonus + Terminal Bonus, if any
Option 2 – Term 20 years 60% of the Sum Assured + vested bonus + Terminal Bonus, if any
Option 3 – Term 24 years 70% of the Sum Assured + vested bonus + Terminal Bonus, if any
 
  • Death Benefit – If the insured dies during plan term and the policy is in force, the death benefit payable would be the Sum Assured on Death + vested reversionary bonuses till death + Terminal Bonus, if any subject to a minimum of 105% of premiums paid till death.
    The Sum Assured on Death is higher of the following:
    • 10 times the annual premium 
    • Basic Sum Assured
      If the insured dies due to an accident, an additional benefit would be payable because of the inbuilt accidental benefit rider. The benefit would be equal to the Basic Sum Assured under the plan and would be payable only if the insured is aged 18 years or more on the date of death.
  • Survival Benefits – Money back benefits or survival benefits are paid to the policyholder at different intervals based on the plan option chosen. The following are the benefits payable at respective tenures:
Plan Option Survival Benefits payable
Option 1 – Term 16 years 20% of the Sum Assured is paid in the 4th, 8th and the 12th policy year
Option 2 – Term 20 years 20% of the Sum Assured is paid in the 5th, 10th and the 15th policy year.
Option 3 – Term 24 years 20% of the Sum Assured is paid in the 6th, 12th and 18th policy year.
 
  • Bonus – Compound reversionary bonuses are added every year provided the policy is in-force and all due premiums have been paid under the plan. These bonuses accrue from the first policy year and continue till plan maturity. A Terminal Bonus may also be paid on maturity or death if the policy remains in force for a minimum of 10 years.
  • Loan –Loans are available under the plan if the plan acquires a Surrender Value. The maximum available loan amount is limited to 65% of the acquired Surrender Value. 
  • 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 TATA AIA Life Insurance Money Back Plus Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
  Minimum Maximum
Entry Age (Last Birthday) 2 years 51 years
Maturity Age (Last Birthday) 18 years 75 years
Plan tenure 16,20 and 24 years
Premium payable Depends on age, term and Sum Assured
Premium Paying Term (PPT) Term 16 years – 8 years
Term 20 years – 10 years
Term 24 years – 12 years
Sum Assured Rs.2 lakhs No limit
Premium payment mode Monthly, half-yearly or yearly



Additional Benefits of TATA AIA Life Insurance Money Back Plus Plan

  • Riders – There are no additional riders available under the plan.
  • Large Sum Assured Discount – If the policyholder selects a large level of Sum Assured, he would get a discount in the premium which is as follows:
Basic Sum Assured Level Discount per Rs.1000 Sum Assured
Rs.2 lakhs to Rs.349,000 Nil
Rs.3.5 lakhs to Rs.499,000 Rs.2
Rs.5 lakhs to Rs.999,000 Rs.3
Rs.10 lakhs and above Rs.5
 
  • Grace Period – A grace period of 30 days is allowed for payment of premium after the due date in case of annual and half-yearly mode of premium payment. The period decreases to 15 days for the monthly mode of premium payment. 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 (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.


Premium Illustration

The chart below shows the premium rates at different levels of Sum Assured and for different ages and tenures.



The premium rates are also tabulated hereunder for a quick reference:
Age Term 16 years Term 20 years Term 24 years
Sum Assured - 5 lakhs Sum Assured - 10 lakhs Sum Assured - 5 lakhs Sum Assured - 10 lakhs Sum Assured - 5 lakhs Sum Assured - 10 lakhs
30 years 68,810 135,850 58,195 114,390 51,695 101,390
40 years 71,575 141,150 60,735 119,470 54,760 107,520
50 years 80,035 158,070 69,230 136,460 65,505 129,010



Exclusions in TATA AIA Life Insurance Money Back Plus Plan

  • If the insured commits suicide within a year of policy issuance, the premiums paid would be refunded and the policy would become void.
  • If suicide is committed within a year of policy revival, higher of the premiums paid till death or the Surrender Value acquired would be paid provided the policy is in force.
  • In case of the inbuilt accidental death benefit, accidental death due to criminal acts, defense activities, self-inflicted injury or suicide, participation in hazardous activities, alcohol or drug abuse, aviation, nuclear contamination and war would be excluded.


Non-Payment of premium in TATA AIA Life Insurance Money Back Plus Plan

Premiums have to be paid for at least one full year otherwise the policy lapses and no benefit is payable. After this compulsory period, the policyholder can surrender the policy or make it paid-up if the premiums are not paid. 

Making the policy Paid-up

If at least one full years’ premium has been paid, the policy would become a paid-up policy if future premiums are not paid. The facility of loan cannot be availed in a paid-up policy and bonuses would also not accrue. Survival Benefits are also not paid in a paid-up policy. The benefits payable under the plan would be reduced and called Paid-up Benefits which are calculated as follows:
  • Death Benefit – The death benefit would be reduced and calculated as follows:
    {Sum Assured on Death *(number of premiums paid/total number of premiums payable)+ vested reversionary bonus + Terminal Bonus, if any} subject to a minimum of 105% of all premiums paid till death
    The accidental death benefit would also be reduced and called the Reduced Paid-up Sum Assured which is calculated as follows:
    Reduced Paid-up Sum Assured = Basic Sum Assured * (number of premiums paid/total number of premiums payable)
  • Maturity Benefit – The maturity benefit would  be calculated as follows:
    Total guaranteed benefits payable under the plan * (number of premiums paid/total number of premiums payable) + vested reversionary bonus – Survival benefits already paid}
    Total Guaranteed Benefits payable under the plan = 60% of the Basic Sum Assured + Guaranteed Sum Assured on Maturity.


Surrendering the policy

Surrender is allowed only after the policy becomes paid-up, i.e. after one full year’s 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 would depend on the policy year in which the plan is surrendered and is expressed as follows:
    {(Total premiums paid* GSV Factor of premiums) + (vested Guaranteed Additions + reversionary bonus * GSV Factor of additions and bonus)} – Survival benefits already paid.
  • The SSV factors would be declared by the company based on its performance and would be calculated as follows:
    SSV Factor * {(number of premiums paid/number of premiums payable)* (total guaranteed benefits payable under the plan) + vested reversionary bonus – Survival benefits already paid}
    Total Guaranteed Benefits payable under the plan = 60% of the Basic Sum Assured + Guaranteed Sum Assured on Maturity


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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