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TATA AIA Life Insurance Smart Income Plus Plan

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TATA AIA Life Insurance Smart Income Plus Plan Review

TATA AIA Life Insurance Smart Income Plus Plan is a traditional, non-participating Endowment Insurance Plan which provides the twin option of regular income payouts or a lump sum benefit. Life insurance cover is also provided under the plan.


Highlights of the TATA AIA Life Insurance Smart Income Plus Plan

  • This is a traditional Endowment Plan which does not participate in bonus declarations. 
  • Premiums under the plan are paid only for a limited tenure.
  • The plan has two benefit options and the policyholder can choose any one as per his requirements. 
  • The first option allows regular incomes while the second option provides a lump sum endowment benefit. 
  • Riders are available under the plan for a more comprehensive coverage
  • Female lives are charged lower rates of premiums.


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Working of the TATA AIA Life Insurance Smart Income Plus Plan

  • The policyholder chooses the amount of premium, plan term and the plan option.
  • 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.
  • Survival Benefits are paid as per the payout option selected.


Benefits and Features of TATA AIA Life Insurance Smart Income Plus Plan

  • Maturity Benefit – When the plan matures and the premiums have been duly paid, the maturity benefit payable depends on the plan option selected. Here is the list of benefits payable:
    • Option I – Regular Payout Benefit – on maturity, along with the last installment of the Guaranteed Payout, a Guaranteed Maturity Payout (GMP) is paid to the policyholder. This payout is calculated as follows:
      GMP Factor * Annual Premium
      The GMP Factor depends on the age, gender and the premium paying term.
    • Option II – Endowment Option – under this option, the Minimum Guaranteed Sum Assured on Maturity is paid which is equal to the Guaranteed Maturity Payout. This benefit is equal to the Guaranteed Payout payable under Option II.
  • 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 irrespective of the survival benefits already paid.
    The Sum Assured on Death under the plan would be higher of the following:
    • Minimum Guaranteed Sum Assured on Maturity 
    • Absolute amount assured payable on death 
    • 105% of total premiums paid till death 
    • 11 times the annual premium paid.
      The Minimum Guaranteed Sum Assured on Maturity is equal to the Guaranteed Maturity Payout in case of Option II and Guaranteed Maturity Payout and Guaranteed Payout in case of Option I.
  • Survival Benefits –The survival benefits paid under the plan depend on the plan option selected. 
    • Option I – Regular Income Option – under this option, Guaranteed Payouts are paid annually and are expressed as a percentage of the annual premium paid depending on the plan term and premium paying term. The Guaranteed Payouts are payable from the end of the 9th, 12th and 14th policy year for premium paying terms of 7, 10 and 12 years respectively and are payable for the remaining plan tenure. The rate of the Guaranteed Payouts is as follows:
      Premium Paying Term Payouts
      7 years 130% of the annual premium
      10 years 150% of the annual premium
      12 years 175% of the annual premium
    • Option II – Endowment Option – under this option, a lump sum benefit is paid at the end of the policy year which is one year before the maturity date. This Guaranteed Payout is also determined as the percentage of the annual premium and depends on the age, gender and the premium paying term.
  • Bonus – The plan does not earn bonuses as it is a non-participating plan. 
  • 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 Smart Income 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) 3 years 50 years
Maturity Age (Last Birthday) 18 years Term 15 years – 65 years
Term 21 years – 71 years
Tern 25 years – 75 years
Plan tenure 15,21 or 25 years
Premium payable Option I – Rs.18,000
Option II – Rs.36,000
No limit
Monthly Income Rs.2000 No limit
Premium Paying Term (PPT) Term 15 years – 7 years
Term 21 years – 10 years
Term 25 years – 12 years
Sum Assured 11 times the annual premium
Premium payment mode Monthly, quarterly, half-yearlyand annually



Additional Benefits of TATA AIA Life Insurance Smart Income Plus Plan

  • Riders – The plan has two additional riders which can be bought for additional coverage. The available riders are TATA AIA Life Insurance Accidental Death and Dismemberment (Long Scale) Rider and TATA AIA Life Insurance Waiver of Premium Plus Rider. 
  • Large Premium Boost – If the policyholder selects a large amount of premium, he would get an additional benefit which would be payable along with the Guaranteed Maturity Payout and the Guaranteed Payout. This benefit depends on the amount of premium payable and the plan option selected and is as follows:
    For Option I – Regular Payout Option
Annualized Premium Large Premium Boost
Rs.18,000 to Rs.49,999 0%
Rs.50,000 to Rs.99,999 5%
Rs.1 lakh to Rs.199,999 20%
Rs.2 lakhs and above 30%
 
For Option II – Endowment Option
Annualized Premium Large Premium Boost
Rs.36,000 to Rs.74,999 0%
Rs.75,000 to Rs.99,999 1%
Rs.1 lakh to Rs.199,999 2%
Rs.2 lakhs and above 3%
 
  • Grace Period – A grace period of 30 days is allowed for payment of premium after the due date for all modes except monthly mode where the allowed period is 15 days. 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 Smart Income 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


Non-Payment of premium in TATA AIA Life Insurance Smart Income 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. 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)} subject to a minimum of 105% of all premiums paid till death
  • Survival Benefit – Reduced survival benefits  would be payable which would be calculated as follows:
    Option I – Regular Payouts Option – Guaranteed Maturity Payouts * (number of premiums paid/total number of premiums payable)
    Option II – Endowment Option – Guaranteed Maturity Payout * (number of premiums paid/total number of premiums payable)
  • Maturity Benefit – The annual bonuses which accrued before the policy became paid-up would be paid as maturity benefit.


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) – 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 * (Maturity +Survival benefits) * (number of premiums paid / total number of premiums payable) – Survival benefits already paid.

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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