Investment Plans 240 views November 28, 2020

Tata AIA Life Insurance Money Maxima Plan

You must have planned your future financial goals. But are your savings tools enough for them? Because the goals might eventually get affected by financial or medical emergencies. So the goal is to get a lump sum with a flexible withdrawal option. And for your planning, the Tata AIA Life Insurance Money Maxima plan could be useful. It is a regular premium paying Non-Linked Participating Endowment Assurance Plan that provides guaranteed plus bonus returns for the invested amount. This plan can be used when you need money for a child’s education, marriage, starting a new enterprise, etc. Let’s read this page and know more details about Tata AIA Life Insurance Money Maxima Plan.

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Key Features

  1. Flexible Policy Terms for the Customer
  2. Guaranteed Loyalty Addition
  3. Life coverage throughout the policy
  4. Policy Enhancement Option
  5. Protection via Riders
  6. Tax benefits under Section 80C and 10(10D) of the Income-Tax Act, 1961

Policy on Maturity 

On maturity of Tata AIA Life Insurance Money Maxima Plan, the company will pay a Minimum Guaranteed Sum Assured with vested Simple Reversionary Bonus and Terminal Bonus, if any. This maturity benefit will be eligible only if the policy is in force and all due premiums have been paid.

Policy on Death

In the event of the death of the insured, the company will pay a Sum Assured on death with vested Simple Reversionary Bonus and Terminal Bonus, if any. This death amount is subject to a minimum of 105% of Total Paid Premiums, as on the date of the insured death. It shall be the higher of the following –

  1. 10X Annualised Premium
  2. Minimum Guaranteed Sum Assured on maturity

Guaranteed Loyalty Addition (GLA)

On your Tata AIA Life Insurance Money Maxima Plan, you will get a Guaranteed Loyalty Addition. And this is calculated as follows:

GLA = (Policy Term / 2)% * Basic Sum Assured (on maturity/death)

Tata AIA Life Insurance Accidental Death and Dismemberment (Optional Rider)

The optional rider in your Tata AIA Life Insurance Money Maxima Plan ensures the protection of your family. In case the insured dies in an accident, the company will pay an amount equivalent to the rider sum assured to the nominee. Whereas for the case of severe dismemberment such as loss of limbs or bodily functions and severe burns, the insurer will pay a percentage of the rider sum assured. And in some cases, the benefits will double.

Note – The Premium Payment Term is going to be the same as the premium paying term of the base policy.

Policy Surrender

Tata AIA Life Insurance Money Maxima Plan can be surrendered any time during the policy term if at least the first full year’s premium is paid by the policyholder. The policy surrender value is higher than the Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV). Minimum Guaranteed Surrender Value is the sum of a guaranteed surrender value and surrender value of any subsisting bonus.

GSV = (Total Paid Premiums x GSV Factor for Premium^) + (Vested Simple Reversionary Bonus (if any) x GSV Factor for Bonus^).

SSV = Special Surrender Value Factor^ x (Reduced Paid-up Sum Assured + Guaranteed Loyalty Addition + Vested Simple Reversionary Bonuses (if any)).

For policy surrender, the Guaranteed Loyalty Addition is calculated as a percentage of the Reduced Paid-up Sum Assured. And this Special Surrender Value Factor varies according to the policy term and year of policy surrender. Here, the company has the right to review the basis for calculating these factors, which are subject to prior approval from the IRDAI.

Reduced Paid-up Policy

When you don’t pay your premium on its due date, a grace period of 15 days will be given if you have a monthly payment mode, and 30 days for other payment modes. During this period, your policy is in force with the risk cover. If any of your premiums remain unpaid at the end of a Grace Period, the policy will lapse and get converted into a reduced paid-up policy.. This reduced paid-up policy can be revived within 2 years from the due date. For a reduced paid-up policy, the benefits will be as follows:

Death Benefit 

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

Maturity benefit –

Minimum Guaranteed Sum Assured on maturity x (Number of paid premium)/ (Number of payable premiums during the policy term) + Vested Simple Reversionary Bonus

Note – When your Tata AIA Life Insurance Money Maxima Plan becomes reduced paid-up and not revived within 2 years from the due date, it will continue as reduced paid-up, the policy will not be entitled to any further Simple Reversionary Bonuses and Terminal Bonus if any.

Policy Revival or Reinstatement

If your policy is in default beyond the Grace Period and not surrendered yet, you can reinstate or revive the same within 2 years after the due date or before the date of maturity. For this, you need to submit a written application for reinstatement or revival to the company. Also, you need to provide the current health certificate with evidence of insurability. All payment must be done with interest, as repayment or reinstatement of any indebtedness outstanding on the due date of premium payment includes interest by default.

Free Look Period

You can return the policy if you are not satisfied with the company’s terms and conditions. You need to submit a written notice to the company for the cancelation. And when the company receives such notice, you will get a refund of all paid premiums without interest with a deduction of the proportionate risk premium and stamp duty charges. This notice must be signed by you and received directly by the company within 15 days of the free look period that starts from the date of receipt of the policy document. Your free look period can be extended to 30 days if the policy is sourced through distance marketing.

Exclusions

If the insured dies due to suicide 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 “Total Paid Premiums” or the acquired surrender value as on the date of death, whichever is higher, provided the policy is in force.

Tax Benefits

If all premiums are paid under this plan, you are eligible for tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961.

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