Tata AIA Life Insurance has recently launched a new term assurance plan—Sampoorna Raksha. What makes it different from vanilla term insurance plans is the flexibility to choose from various death benefit options.

It offers 4 death benefit options. You may opt to receive either a lump sum benefit on death or lump sum benefit on death and monthly income for next 10 years while also enjoying the flexibility to enhance your life cover.
 

• Option 1 - "Sum Assured on Death" as lump sum benefit on death
• Option 2 - "Sum Assured on Death" as lump sum benefit on death & monthly income for next 10 years. (Along with the sum assured on death, the nominee shall also receive a monthly income equal to 1% of basic sum assured for 10 years starting from the next monthly anniversary following the date of death. The nominee also has an option to receive the commuted value of the future income benefits as a lump sum)
• Option 3 – "Enhanced Sum Assured on Death" as lump sum benefit on death (Enhanced Sum Assured at the time of death shall be the basic sum assured increased by a simple rate of 5% per annum at each policy anniversary up to the time of death subject to maximum of 200% of basic sum assured chosen at the time of policy inception)
• Option 4 – "Enhanced Sum Assured on Death" as lump sum benefit on death & monthly income for next 10 years. (Enhanced Sum Assured at the time of death shall be the basic sum assured increased by a simple rate of 5% per annum at each policy anniversary up to the time of death subject to maximum of 200% of basic sum assured chosen at the time of policy inception. Along with the enhanced sum assured on death, the nominee shall also receive a monthly income equal to 1% of basic sum assured chosen at the time of policy inception, for 10 years starting from the next monthly anniversary following the date of death. The nominee also has an option to receive the commuted value of the future income benefits as a lump sum)

 

Let us understand the plan better with the help of a case study:

Anurag, aged 30 years is a young entrepreneur; he has a 2 year old son Aarush. Anurag wants to protect his wife Pranjal & Aarush in case something unfortunate were to happen to him. To ensure his family is protected from financial crisis, he opts for Tata AIA Life Insurance Sampoorna Raksha Plan for a policy term of 40 years and premium payment term of 10 years.

Scenario I:

Anurag Opts for Plan Option 2 - Basic Sum Assured payable on Death & Monthly Income thereafter for 10 years. He pays an annualised premium of Rs 30,175, assuming that he is in good health for a sum assured of Rs 1 Crore.

In event of an unfortunate death of Anurag at age 36 years, his wife Pranjal receives a lump sum death benefit of Rs 1 Crore and receives an income of Rs 1 lakh per month for 10 years.
 

(Source: Brochure of Tata AIA Life Insurance)
Scenario II:

Anurag Opts for Plan Option 4 - Enhanced Sum Assured payable on Death & Monthly Income thereafter for 10 years. He pays an annualised premium of Rs 37,230, assuming that he is in good health for a sum assured of Rs 1 Crore.

The sum assured under this option increases at a simple rate of 5% every year, i.e. Rs 5,00,000 every year. In event of unfortunate death of Anurag at age 36 years, his wife Pranjal receives an enhanced sum assured on death as lump sum death benefit of Rs 1.3 Crore and receives an income of Rs 1 lakh per month for 10 years.
 
(Source: Brochure of Tata AIA Life Insurance)

The Eligibility criteria to purchase the plan are as follows:

Plan Parameters	Eligible Criteria
Minimum age at entry (years) (last birthday)	18 years
Maximum age at maturity (years) (last birthday)	80 years
Policy payment term	Regular pay or Limited pay
Minimum Sum Assured (Rs)	50 lakhs
Maximum Sum Assured (Rs)	No limit
Maturity benefit and Survival Benefit	NIL
Surrender Benefit	Not available for regular pay
Reduced paid up benefit	Not available for regular pay
Tax Benefit	Premiums paid are eligible for deduction under section 80 C of the Income Tax Act, 1961

(Note: The table is for illustration purpose only)
(Source: PersonalFN Research)
To Sum Up:

Remember, insurance is an avenue to indemnify risk—this is the primary purpose of insurance. However, it is often looked upon as a "risk-free investment avenue" by individuals valuing them at par with Fixed Deposits, PPF, etc. Insurance companies exploit the fractured money outlook of investors and roll out products with fancy names offering paltry returns.

However, ideally insurance and investment needs should be dealt with separately for optimal portfolio structuring.

A pure term plan (i.e. Option 1 under this plan) is by far the most financially prudent decision you can make, instead of opting for any of the other options.

Remember, when purchasing insurance, be sure to take enough term insurance to adequately protect your dependents, and avoid the monthly income gimmick. It would be easier to engage the services of a financial planner, who could recommend an appropriate life insurance policy with an optimum cover after taking into account host of factors.

Always remember the golden rule of insurance—it is better to have one and not need it, than to need it and not have one.

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jayant.navarange@gmail.com Apr 14, 2019 Kindly send by email information regarding premium calculation for 1 Cr sum assured at different ages--say 25, 35,40, 45, 50 ,55 and 60. Up to what age this policy is available?
Sangeethadravid28@gmail.com Apr 15, 2019 If u want to know premium calculation of term plan pls contact me this number7567326881 (Advisor in Tata AIA life insurance)
Sangeethadravid28@gmail.com Apr 15, 2019 If u want to know premium calculation of term plan pls contact me this number7567326881 (Advisor in Tata AIA life insurance)
mukeshgujar999@gmail.com Dec 02, 2019 Hdfc bank branch shirpur tell me that tata aia insurance term plan has not issued in dharan gaon dist jalgaon Why you not submit my policy and dd pl reply for call
mukeshgujar999@gmail.com Dec 02, 2019 Hdfc bank branch shirpur tell me that tata aia insurance term plan has not issued in dharan gaon dist jalgaon Why you not submit my policy and dd pl reply for call

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