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Investment Plans September 29, 2020
The purpose of paying life insurance premiums is to get financial protection for your family members when you leave them after your death. But how will you feel when you get maturity benefits that you don’t get in a typical term insurance plan? Yes, there’s one policy that can serve this goal – Max Life Saving Advantage Plan. It is a life insurance product that helps you grow your money systematically along with coverage against risks for you and your family. Read this post and find the list of its benefits of this policy, along with terms and conditions to avail of the same.
Table of Contents
Throughout this Policy Term, the life insured will get a sum of 110% of Guaranteed Death Benefit, accrued Guaranteed Additions along with an accrued Paid-Up Addition (if any), and a Terminal Bonus (if any) on death or before completion of 10 policy years. And if the life insured survives till the end of the policy term, a sum of 110% of Guaranteed Sum Assured on Maturity plus the accrued Guaranteed Additions, accrued Paid-Up Additions (if any) and Terminal Bonus (if any) are payable.
You have an option to convert the lump sum Maturity or Death Benefit of this policy into equal monthly or annual installments for 10 years.
You have the following two settlement options for the Maturity Benefit:-
The terms of the policy settlement may vary depending upon the prevailing investment condition at the time of settlement. The interest rate at which the settlement option can be valued is based on the 5-year G-Sec yield at that time.
Each year, on 1st April, the company sets the rate for the settlement option equaling the yield on 5 years G-Sec as on 31st March of that year. During the income phase, you will have the right to commute the remaining payouts by submitting a written request to the insurer anytime. On receiving such a request, the company will pay the present value of all future payouts to the life insured at a discounted rate applicable at the time of exercising the settlement option.
Once the life insured exercises this option, the declared rate will become guaranteed. The same rate is applicable in case the life insured opts for the commutation of remaining payouts during the income phase.
Note: The insured can exercise this option by submitting a written request to the company at least 15 days before the date of maturity of the policy.
The insured should know all the prospects of the life insurance policy before he/she buys it. And in the case of the death benefit, they should have added a nominee or beneficiary to the policy. Have a look at the pointers below and see the benefits the nominee will get.
For the Single Pay Variant
Guaranteed Death Benefit + Accrued Guaranteed Additions + Accrued Paid-Up Additions (if any) + Terminal Bonus (if any)
Here, the Guaranteed Death Benefit for a Single Pay variant is up to 125% of the Single Premium Guaranteed Sum Assured on the Maturity of any absolute amount assured which is to be paid on the death of the insured (It is 110% of Guaranteed Sum Assured on Maturity).
For Limited Pay and Regular Pay variant
If the Life Insured dies before or on the completion of 10 policy years
Guaranteed Death Benefit + Accrued Guaranteed Additions + Accrued Paid Up Additions (if any) + Terminal Bonus (if any) are payable
If the Life Insured dies after completion of 10 policy years
110% x Guaranteed Death Benefit + Accrued Guaranteed Additions + Accrued Paid Up Additions (if any) + Terminal Bonus (if any) are payable
Here, the Guaranteed Death Benefit for Limited Pay and Regular Pay variant is will be higher of 11 times the (Annualised Premium + underwriting extra premium, if any) 105% of ( the total paid premiums + underwriting extra premium + loading for modal premiums as on the date of death of Life Insured) Guaranteed Sum Assured on Maturity, any absolute assured amount which needs to be paid on death (which equates to 110% of Guaranteed Sum Assured on Maturity).
Settlement and Commutation Option For Death Benefit
This is for your nominee only at the time he/she is receiving the Death Benefit. Your nominee will have the following two settlement options:
At any time during the income phase, your nominee will have the right to commute the remaining payouts by submitting a written request to the insurer. On receiving such a request, the company will pay the present value of all future payouts at a discounted rate of 5.25% per annum.
Your policy bonus is declared in the form of a Paid-Up Addition every year when your policy completes 2 years. The policy Paid-Up Additions are payable on earlier surrender, death, or maturity. However, in case of surrender, only the surrender value of accrued Paid-Up Additions (if any) will be payable. Below are the bonus options that are available to you at the proposal form stage:
Paid-Up Additions: It is declared once and shall accrue and be payable in full on earlier of death or maturity. In the case of policy surrender, the surrender value of all accrued Paid-Up Additions will be payable to the life insured. Paid-Up Additions will participate in future bonuses and the insured has the flexibility to partially or fully surrender the Paid-Up Additions at any time during the Policy Term, where the policy surrender value of the surrendered Paid-Up Additions are payable. The minimum surrender value of surrendered Paid-Up Additions will not be < INR 5,000.
Note: This option will not be allowed in case the Policy is in reduced Paid-up mode
Premium Offset: On the declaration of the Paid-Up Additions each year, your surrender value of the Paid-Up Additions will be utilized to offset the future premium. In case the surrender value of Paid-Up Additions exceeds the payable Premium by the insured to the company under this Policy, the insurer shall pay such balance to the insured. However, if the surrender value of Paid-Up Additions is not sufficient to offset the Premium payable by the insured to the insurer under this Policy, you will pay the balance Premium to the company.
After the completion of the Premium Payment Term, the surrender value of Paid-Up Additions shall be payable to the insured every year till the end of the Policy Term.
Note: There is no minimum limit for utilizing Paid-Up Additions to offset future premiums
Paid In Cash: On the declaration of Paid-Up Additions each year, your surrender value of Paid-Up Additions are payable to you every year till the end of the policy term. The surrender value of the Paid-Up Additions will be determined based on the surrender value factor for Paid-Up Additions.
Note: These bonus rates are fixed, but may get revised by the insurer based on the experience of the company, which is subject to prior approval from the IRDAI. You can change the bonus option anytime during the Policy Term by giving a written request to the insurer, which is effective from the subsequent Policy Anniversary. The bonus option will automatically change to Paid-Up Additions, if not already the case, in case of assignment of the Policy
Terminal Bonus is an additional bonus on the Max Life Saving Advantage plan which is paid only once on the death, surrender or maturity, whichever happens earlier. It is provided when the policy is in force for at least five years that is payable in case claims are made from the end of the 60th month onwards. However, in the case of policy Surrender, only the Surrender Value of Terminal Bonus shall be payable by the insurer.
If the policy is in force (including RPU mode) and the Life Insured is diagnosed to be suffering from a disease which, in the opinion of a Medical Practitioner and the concurrence of the company appointed doctor, is likely to lead to the death of the Life Insured within 6-months from the date of such certification from the Medical Practitioner, the company, at your request, will pay the Benefits as follows:
This is subject to a maximum cumulative amount of INR 10 lakh which is provided for the Terminal Illness Benefit, on the approval of the Terminal Illness claim filed and upon the payment of Terminal Illness Benefits. The benefits under all the policies would be in force with the company concerning the Life Insured, which is provided for this Terminal Illness Benefit will be proportionately reduced and payable in accordance with the terms of the respective policy. The Terminal Illness Benefit paid will get offset from the policy proceeds at the time of termination (for Death, Surrender, or Maturity). Terminal Illness benefit is availed once during the policy lifetime. During the period of survival of the Life Insured, all due premiums will be paid to keep this policy in force and the bonuses will be paid on the original Guaranteed Sum Assured on Maturity.
The company also offers 3 riders to the life insured under the Max Life Saving Advantage plan. Have a look at them.
Max Life Term Plus Rider (UIN – 104B026V03): It gives additional risk coverage in the case of death of the life insured.
Max Life Accidental Death & Dismemberment Rider (UIN – 104B027V03):- It gives an additional benefit in case of death of the life insured or dismemberment of life insured caused due to accident.
Max Life Waiver Of Premium Plus Rider (UIN – 104B029V03):- It gives a waiver for all future premiums under a policy on earlier happening of either of the following events, if the policy is in force:
When your policy has acquired a Surrender Value Policy, you are eligible to borrow a loan under this which is subject to the maximum limits as defined in the table below. Your policy deferment period is equal to Policy Term less the Premium Payment Term.
(Policy Term less PPT)
|Maximum Loan Amount as
% of SSV
Conditions for getting the loan under the policy are similar to the existing Terms and Conditions of policy loans at Max Life Insurance. The minimum loan amount that you can borrow under the policy at any time will be INR 10,000. The loan interest rate shall be equal to the applicable RBI Bank Rates + 3.00%. The current loan interest rate is set at 9.9% per annum and compounded annually. The current rate is effective from 1st July 2019 based on the RBI Bank Rate of 7.0% per annum prevailing as at 5th April 2016.
The RBI Bank Rate for the financial year ending 31st March (every year) will be considered for determining the policy loan interest rate and the same will be effective from 1st July every year. The loan interest rate is revised only if the RBI Bank Rates changes by 1% or more.
Max Life Insurance Co Ltd offers you full flexibility to choose this life insurance plan Premium Payment Terms & Policy Term. It helps the customer decide the period of investment for the goal they are saving the money. And in this, you can take the help of the Max Life Saving Advantage Plan Calculator. The annualized premium in the policy is a premium amount that is payable during a Policy Year chosen by Policyholder, excluding the Underwriting Extra Premium, loading for modal premium, Rider Premiums and applicable taxes, cesses or levies, if any.
If your policy shows total Premiums Paid, it means all your Premiums are received, excluding Underwriting Extra Premium, loading for modal premiums, Rider Premiums, and applicable taxes, cesses, or levies, if any. Underwriting Extra Premium is an additional amount that is charged by the insurer, as per Underwriting Policy, and it is determined based on disclosures made by the Policyholder in the Proposal Form or any other information received by the insurer, including the medical examination report of the Life Insured.
The policy premium rates and the benefits are uni-sex (which is the same for male, female, and transgender) and unismoker. Max Life Saving Advantage plan offers substandard lives with extra mortality charges that are subject to limits, which are determined by the board approved underwriting policy of the company.
The company offers you an online tool using which you can find the premium amount that is suitable for your financial goals. To use the Max Life Saving Advantage Plan Calculator, you need to follow the steps shown below
You may get a different option for premium payments such as:-
Check out this table below to know how the premium payment term is designed for Limited Pay and Regular Pay variants.
|Premium Payment Modes||Policy Term < 15 years (in INR)||Policy Term >= 15 year (in INR)|
If you want to know what is the minimum Guaranteed Sum Assured payable on the policy maturity, take a look at the below details.
A Minimum GSAM for the Max Life Saving Advantage Plan
Single Pay: INR 78,738
Limited Pay & Regular Pay: INR 1,69,379 (If Policy Term is less than 15 years) or INR 24,425 (If Policy Term is greater than or equal to 15 years)
Guaranteed Sum Assured on Maturity Bands
|Maturity Band||GSAM Range For PT < 15 years (in INR)||GSAM Range For PT >= 15 years (in INR)|
|1||< 2,50,000||< 1,00,000|
|2||2,50,000 – 4,99,999||1,00,000 – 2,49,999|
|3||5,00,000 – 7,49,999||2,50,000 – 4,99,999|
|4||7,50,000 & above||5,00,000 & above|
Note: The minimum premium payment amount is exclusive of any applicable tax plus cesses and levies, loading for modal premium and underwriting extra premium as well (if any). And the insurer sets no maximum limit for the Max Life Saving Advantage plan. It is subject to the limits determined by the board approved underwriting policy of the company.
First, you need to know that the policy cannot be surrendered before it has acquired the Surrender Value. However, if the Policy has a surrender value, you will get the same on surrendering the policy. The policy can acquire a Surrender Value for:-
The Surrender Value of the policy is defined as above of the Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV).
The GSV factor of the Max Life Saving Advantage plan is as follows
|Policy Year||Percentage of (Total paid Premiums for Base policy excluding Extra Premium (if any)) for Single Pay||Percentage of (Total paid Premiums for Base policy excluding Extra Premium (if any)) for Limited and Regular Pay|
|8+||90%||Graduating linearly from 56% to 90% during the last two policy years
Minimum (56% + [(34% x (N-7))/(Policy Term - 8)], 90%)
N : Year of Surrender
The Special Surrender Value (SSV) is paid to the life insured will always be above or equal to the Guaranteed Surrender Value.
SSV = SSV of Base + Surrender Value of Accrued Guaranteed Additions (if any) + Surrender Value of Accrued PUA (if any) + Surrender Value of Terminal Bonus (if any)
Note: SSV is not guaranteed and may be revised subject to prior approval from the IRDAI, but it will never be lower than GSV.
You are entitled to certain applicable tax benefits under Section 80 (C) and Section 10(10D) of Income Tax Act 1961 on your premium payments for this policy, which are decided as per the prevailing tax laws.
When you don’t pay the premium till the due date, the company will provide you a Grace Period of 30 days, except for the monthly mode premium payment, where a grace period is only for 15 days. During this period, the risk cover will continue without any break.
In case you don’t pay the premium till the Grace Period expiry, the following provisions will apply:
Case 1:- If you don’t pay the due premium during the grace period, the policy will lapse with effect from the due date of the unpaid premium. And the insurance cover will be stopped and no benefits shall be payable to you. However, you will have the option to revive the Policy within 5 years from the due date of the unpaid premium.
Case 2:- If your policy has acquired a surrender value and you don’t pay the due premium during the grace period, your policy will become a Reduced Paid-up (RPU) Policy with effect from the due date of unpaid premium. The following are the benefits that will be reduced:-
Maturity Benefit for a Policy in RPU Mode = 110% of RPU Guaranteed Sum Assured on Maturity + Accrued Guaranteed Additions + Accrued Paid Up Additions (if any)
Death Benefit for a Policy in RPU Mode (Before completion of 10 policy years) = RPU Guaranteed Death Benefit + Accrued Guaranteed Additions + Accrued Paid Up Additions (if any)
Death Benefit for an RPU Policy (After Completion of 10 Policy Years) = 110% x RPU Guaranteed Death Benefit + Accrued Guaranteed Additions + Accrued Paid Up Additions (if any)
Settlement and Commutation for Reduced Paid-Up Policy
The policy will not participate in future bonuses once it becomes RPU and all rider benefits will cease. And the Surrender of accrued Paid-Up Additions are not allowed for RPU policies
If Policy lapsed:- Once your policy lapses, it can only be revived within a revival period of five years from the first due date of unpaid premium subject to the following policy conditions:
Currently, the applicable late fee payment is as follows:
|No. of Days between lapse|
and revival of the policy
|Revival Late fee||Current Revival Late Fee|
|0-60|| Nil ||0.00%|
|61-180||RBI Bank Rate + 1%||8.00%
|>180||RBI Bank Rate + 3%||9.90%|
The revival of the Policy will take place only if it is approved by Max Life Insurance based on the board approval underwriting the policy and communicated to the life insured in writing if it has lapsed and not revived within five years, the Policy shall be terminated and no value is payable to the insured if a lapsed policy is not revived within five years.
However, for Reduced Paid-Up policy when the Revival Period is passed, it will not terminate and will continue to be under Reduced Paid-Up Mode for the remaining Policy Term.
The Revival of the Reduced Paid-Up Policy
After a policy has acquired a Surrender Value, the policy will not lapse. In the case of premium discontinuance, the policy will become Reduced Paid-Up (RPU) by default. A Reduced Paid-Up policy can be revived within a revival period of five years from the due date of the first unpaid premium.
As per the policy conditions, you need to pay all the overdue premiums, together with interest and/or late fees determined by the company. The RBI Bank Rate for the financial year-end is considered for determining the revival late fee for this policy.
|No. of Days Between Lapse|
and Revival of the Policy
|Revival Late fee||Current Revival Late Fee|
|0-60|| Nil ||0.00%|
|61-180||RBI Bank Rate + 1%||8.00%
|>180||RBI Bank Rate + 3%||9.90%|
You need to produce evidence of insurability of yours at your own cost which is acceptable to the company. The revival of the Policy will take place only after the revival of the policy is approved by Max Life Insurance and communicated in writing. Once the policy is revived, all the accrued bonuses, Guaranteed Additions and the other benefits will get reinstated to the original levels, in case you have paid premiums throughout. If a reduced paid-up policy is not revived within five years of it becoming reduced paid-up, the policy cannot be revived and will continue as reduced paid-up for the rest of the policy term.
These are the conditions when your policy can be terminated by the insurer
Note: If the Policy is under a Reduced Paid-Up Mode within the Revival Period, it will not terminate and will continue to be under Reduced Paid-Up Mode for the remaining part of the Policy Term.
It is advised to the customer to read the prospectus and benefit illustration to understand the plan details & how it works. So have a look at the Max Life Saving Advantage Plan Terms & Conditions.
The company will give you 15 days (or 30 days if the policy is sourced through Distance Marketing) from the date of receipt, to review the policy terms and conditions. In this period if you disagree with any of the policy terms and conditions, you have the right to return the policy stating the reasons for the objection. And the life assured will be entitled to a refund of the paid premiums, subject to deduction of a proportionate risk premium for the period of cover, and the expenses incurred by the company on medical examination and the stamp duty charges.
If the Life Insured, whether a minor or major, sane or insane, dies within 12 months of the effective date of risk commencement or the date of revival of policy due to suicide, the policy shall terminate immediately. In such a case, the company will pay higher of the following:-
The nomination facility shall be applicable in accordance with the provisions under Section 39 of the Insurance Act 1938, which can be amended from time to time.
This is only a prospect and does not purport to be a contract of insurance and does not in any way create any rights and/or obligations. All the benefits of the policy are payable and subject to the terms and conditions of the policy.
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