TATA AIA Life Insurance Smart 7Plan
TATA AIA Life Insurance Smart 7 Plan is a traditional, participating Endowment Insurance plan which aims to create a savings corpus for the policyholder besides providing him with insurance coverage.
This is a traditional endowment plan where reversionary compound bonus and Terminal bonus are declared.
Premiums under the plan are payable only for a limited tenure which is fixed at 7 years.
Riders are available under the plan for enhanced coverage.
Key Features
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 8 years.
Loans are available under the plan.
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.
Benefits
When the plan matures and the premiums have been duly paid, the Guaranteed Sum Assured on Maturity is paid along with the vested bonuses and any Terminal Bonus. The Guaranteed Sum Assured on Maturity is equivalent to the Basic Sum Assured.
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
- 1.75 times the Basic Sum Assured
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.
How it works
- The policyholder chooses the Sum Assured. Based on the coverage level and the insured’s age, the premium amount is computed.
- Bonuses accrue throughout the plan tenure if the due premiums are paid.
- On death during the period, the death benefit is paid
- On maturity, the maturity benefit is paid.
Let us understand this by premium illustration:
The chart below shows the premium rates at different levels of Sum Assured and for different ages.
The premium rates are also tabulated hereunder for a quick reference:
| Age | SA 2 Lakhs | SA 5 Lakhs | SA 10 Lakhs |
| 35 Years | 30,816 | 77,040 | 154,080 |
| 45 Years | 32,200 | 80,500 | 161,000 |
| 55 Years | 35,292 | 88,230 | 176,460 |
Eligibility
The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
| Minimum | Maximum | |
| Entry age (Last Birthday) | 6 Years | 55 Years |
| Maturity Age (Last Birthday) | NA | 67 Years |
| Plan tenure | 12 Years | |
| Premium payable | Depends on age, term and Sum Assured | |
| Premium Paying Term (PPT) | 7 Years | |
| Sum Assured | Rs.2 lakhs | No limit |
| Premium payment mode | Monthly, half-yearly, quarterly or yearly | |
Exclusions
- 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.
FAQs
Is rider available in this plan?TATA AIA Life Insurance Accidental Death and Dismemberment (Long Scale) (ADDL) Rider can be attached to the basic policy to increase the scope of coverage.
Is grace period available in this plan?A grace period of 30 days is allowed for payment of premium after the due date in case of every mode except monthly mode in which case the period is 15 days. The life cover under the policy would continue during the grace period.
What happens if payment of premiuim is not done?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. 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 - Maturity Benefit – The maturity benefit would be calculated as follows:
Guaranteed Sum Assure don Maturity * (number of premiums paid/total number of premiums payable) + vested reversionary bonus + Terminal Bonus, if any
Is surrender available in this plan?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 with the minimum being the sum of the GSV and the SSV.
- GSV is expressed as follows:
{(Total premiums paid* GSV Factor of premiums) + (reversionary bonus * GSV Factor of bonus)}. - 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 reversionary bonuses)
Is revival available in this plan?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.
