Investment Plans 261 views November 27, 2020

Tata AIA Life Insurance MahaLife Magic Plan

It must be hard for you to manage your family expenses if you are the only earner as they look up to you. So, to plan for the future, whether it is a child education, marriage, or retirement, it would be great for you to have a savings plan. And there could be none better than Tata AIA Life Insurance MahaLife Magic Plan. It is a unique savings plan where you need to pay a premium only for a short period and get numerous benefits in return. Read this post and know more details of the plan.

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Key Features

  1. 9 years of premium payment term
  2. Receive a lump-sum amount at maturity
  3. Availability of bonuses to increase your maturity amount
  4. Potential for upside on bonus components
  5. Life protection for the entire policy term
  6. Enhanced protection through the rider
  7. Get Tax Benefits under Section 80C and 10 (10D)

Benefits of Tata AIA Life Insurance MahaLife Magic Plan

If you buy this policy, you will be eligible for the following benefits:

Benefit on Maturity –

You will receive a Minimum Guaranteed Sum Assured + vested Compound Reversionary Bonus + Terminal Bonus (if any)

Benefit on Death –

Nominees will receive a Sum Assured on death + vested Compound Reversionary Bonus + Terminal Bonus (if any)

This benefit is subject to a minimum of 105% of Total Paid Premiums. And the policy will terminate upon the death of the insured. The Sum Assured on death shall be the higher of 10X Annualised Premium and Minimum Guaranteed Sum Assured on maturity.

Tata AIA Life Insurance MahaLife Magic Plan Additional Benefits

Many of you may consider customizing your policy, and here you can do this by adding the following optional rider at the time of policy inception.

Tata AIA Life Insurance Accidental Death and Dismemberment

When you add this rider to your policy, it gives your family protection, where the nominee gets an amount equal to the rider sum assured if the insured dies in an accident. For severe dismemberment such as loss of limbs or any bodily functions and severe burns, the nominee will get a percentage of the rider sum assured. And the rider benefits will double for certain accidental deaths or dismemberments. Your Premium Payment Term under the rider is the same as the premium paying term of the base policy.

What if You Surrender Tata AIA Life Insurance MahaLife Magic Plan?

You can surrender the policy any time during the policy term if at least the first full year’s premiums have been paid. The policy payable surrender value is higher than the Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV). The minimum guaranteed surrender value is the sum of guaranteed surrender value and the surrender value of any subsisting bonus. It is the percentage of “Total Paid Premiums”. The payable percentage which is the Guaranteed Surrender Value Factor may vary according to your policy surrender year.

Guaranteed Surrender Value = (Total Paid Premiums x GSV factor for premium) + (vested Compound Reversionary Bonus (if any) x GSV factor for Compound Reversionary Bonus)

Special Surrender Value = Special Surrender Value Factor x (Reduced Paid-up Sum Assured + vested Compound Reversionary Bonuses (if any)

Note – The company can review the basis of calculating these factors from time to time based on prior approval from the IRDAI.

Tata AIA Life Insurance MahaLife Magic Plan Grace Period

You have a Grace Period of 15 days in your policy if you have a monthly premium mode, and 30 days grace period if you use any other modes. This starts from the due date of your premium and is provided to make payment of each subsequent premium. In this grace period, your policy is in force with the risk cover. And if any premium remains unpaid at the end of the Grace Period, the policy shall lapse and no further value except Non-Forfeiture Provisions will be provided.

Tata AIA Life Insurance MahaLife Magic Plan Non-forfeiture Provisions

As you know, if the due premiums are not paid within the grace period, the policy shall lapse and no benefits will be payable. After that, the policy is converted into a Reduced Paid-up by default, only if the full premium for the first policy year is paid and subsequent premiums are unpaid. It’s a nonforfeiture benefit for the policyholder.

And a reduced Paid-up policy can be revived within 2 years from the due date of the first unpaid premium. For a Reduced Paid-up policy, the following benefits are payable –

Death benefit –

Sum Assured on death x (Number of paid premiums)/ (Number of payable premiums, during the policy term) + Vested Compound Reversionary Bonus

This death benefit amount is subject to a minimum of 105% of total paid premiums, as on the date of death.

Maturity benefit –

Minimum Guaranteed Sum Assured on maturity x (Number of paid premiums)/ (Number of payable premiums, during the policy term) + vested Compound Reversionary Bonus

When a policy becomes Reduced Paid-up and is not revived within 2 years from the due date of its first unpaid premium, it will continue as Reduced Paid-up, but the policy shall not be entitled to any further Compound reversionary Bonuses or Terminal Bonus.

Tata AIA Life Insurance MahaLife Magic Plan Revival or Reinstatement

Beyond the Grace Period, if your premium is due and policy is not surrendered, you may reinstate or revive the same within two years after the due date of the first unpaid premium or before the date of its maturity. For this, the company may require a written application from you with a current health certificate and other evidence of insurability. So the payment of all overdue premiums with interest must be done if you want to receive the policy. As the repayment or reinstatement of any indebtedness outstanding at the due date of the premium at default includes interest as well.

Note – Reinstatement or Revival cover only loss or insured events that will occur after the reinstatement date.

Free Look Period

You can cancel the policy if you aren’t satisfied with its terms & conditions. To do this you need to provide a written notice to the company after which the company will pay you the refund of all paid premiums without interest deducting the proportionate risk premium, Stamp duty, and medical examination costs. This notice must be sent to the company directly within 15 days after you receive the original policy document from the insurer. The free look period of 15 days can be extended to 30 days if the policy is sourced through distance marketing mode.

Tata AIA Life Insurance MahaLife Magic Plan Exclusions

If the cause of the insured death is suicide and it happens within 12 months from the date of commencement, the nominee will get the “Total Paid Premiums” if the policy is in force. In case of death due to suicide within 12 months from the date of reinstatement or revival, the nominee will get the higher of the following – “Total Paid Premiums” and the acquired surrender value of the policy.

Tax Benefits from Tata AIA Life Insurance MahaLife Magic Plan

All premiums paid under this plan make you eligible for tax benefits under Section 80C and Section 10(10D) of the Income Tax Act. These income tax benefits are provided to you as per the prevailing income tax laws. Here, Tata AIA Life Insurance Company Ltd. does not assume responsibility for any kind of tax implications. Please talk to your tax consultant if you have any queries about the tax benefits.

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