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TATA AIA Life Insurance Monthly Insurance Plan (MIP)

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TATA AIA Life Insurance Monthly Insurance Plan (MIP) Review

TATA AIA Life Insurance Monthly Insurance Plan (MIP) is a traditional, participating Endowment Insurance Plan which helps the policyholder to build up a sizeable corpus through monthly savings. Life insurance cover is also provided under the plan.


Highlights of the TATA AIA Life Insurance Monthly Insurance Plan (MIP)

  • This is a traditional Endowment Plan which participates in bonus declarations and earns reversionary and Terminal bonus. 
  • Premiums under the plan are paid monthly and are payable only for a limited tenure. 
  • Guaranteed Yearly Additions further enhance the corpus
  • Riders are available under the plan for a more comprehensive coverage


Working of the TATA AIA Life Insurance Monthly Insurance Plan (MIP)

  • The policyholder chooses the amount of premium, plan term and the premium paying term.
  • The Sum Assured under the plan is expressed as 11 times the premium paid. 
  • On death during the period, the death benefit is paid according to the benefit option selected.
  • On maturity, the maturity benefit is paid.
COMPARE THIS PLAN WITH OTHER ENDOWMENT PLANS


Benefits and Features is TATA AIA Life Insurance Monthly Insurance Plan (MIP)

  • Maturity Benefit – When the plan matures and the premiums have been duly paid, the benefit payable would be as follows:
    Guaranteed Sum Assured on Maturity + Vested reversionary bonus + Terminal Bonus, if any.
    The Guaranteed Sum Assured on Maturity is the Basic Sum Assured.
  • 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:
    • Sum Assured on Death + accrued Guaranteed Yearly Additions till death + vested reversionary bonuses till death + Terminal Bonus, if any. 
    • Absolute amount assured payable on death which is equal to the Basic Sum Assured 
    • 105% of total premiums paid till death
      The Sum Assured on Death is higher of the following:
    • 10 times the annual premium 
    • Absolute amount assured payable on death which is equal to the Basic Sum Assured 
    • Guaranteed Sum Assured on Maturity
  • Guaranteed Yearly Additions – Guaranteed Yearly Additions are added every year for which the policy is in force. The rate of each addition is equal to one monthly premium paid under the policy. At the beginning of the last policy year, the accrued Guaranteed Yearly Addition is paid to the policyholder. 
  • 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. 
  • 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 Monthly Insurance Plan (MIP)

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 50 years
Maturity Age (Last Birthday) 18 years 70 years
Plan tenure 15 and 20 years
Premium payable Rs.2000 per month No limit
Premium Paying Term (PPT) Term 15 years – 7 years
Term 20 years – 10 years
Sum Assured Rs.114,482 Depends on the maximum premium paid
Premium payment mode Monthly



Additional Benefits of TATA AIA Life Insurance Monthly Insurance Plan (MIP)

  • Riders – The plan has an additional rider which can be bought for additional coverage. The available rider is TATA AIA Life Insurance Accidental Death and Dismemberment (Long Scale) Rider. 
  • Large Premium Boost – If the policyholder selects a large amount of premium, he would get a discount which is as follows:
Annualized Premium Discount per Rs.1000 Sum Assured
Up to Rs.49,000 Nil
Rs.50,000 to Rs.99,000 Rs.3
Rs.1 lakh and above Rs.5
 
  • Grace Period – A grace period of 15 days is allowed for payment of premium after the due date. 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.


Exclusions in TATA AIA Life Insurance Monthly Insurance Plan (MIP)

  • 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


Non-Payment of premium in TATA AIA Life Insurance Monthly Insurance Plan (MIP)

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 and the Guaranteed Yearly Additions and bonuses do not accrue 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 Guaranteed Yearly Additions + vested reversionary bonus + Terminal Bonus, if any} subject to a minimum of 105% of all premiums paid till death
  • Guaranteed Yearly Additions – The accrued additions added till the policy was in-force would be paid at the beginning of the last policy year.
  • Maturity Benefit – The maturity benefit would  be calculated as follows:
    Guaranteed Sum Assured on Maturity * (number of premiums paid / number of premiums payable) + vested bonuses


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 Yearly Additions + reversionary bonus * GSV Factor of additions and bonus)
    If the surrender is done in the last policy year, the accrued Guaranteed Yearly Additions would not be payable as they have already been paid at the commencement of the last policy year.
  • The SSV factors would be declared by the company based on its performance and would be calculated as follows:
    SSV Factor * (Reduced Paid-up Sum Assured + vested Guaranteed Yearly Additions + vested reversionary bonus + Terminal Bonus, if any)


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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