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A good term policy

Monday, April 11, 2011
By Manoj Aswani

Aviva Life Shield Platinum Term Insurance is a pure insurance product which offers huge sum to the nominee in case of the death of the policyholder. The policy has no maturity benefit, that is, if the policy holder survives the policy term then he/she does not get any money back.
Key Features
  • Competitively priced term insurance product
  • Good rider options for the customers like Accidental Death Benefit and Dread Disease
  • Option of scheduling a monthly payment for the nominee in case of death of insured
  • Option to pay off outstanding liability like personal loan or home loan in the event of death of insured
Eligibility Criteria
Minimum Sum Assured
Rs. 50 lakhs
Maximum Sum Assured
No limit
Minimum Age at Entry
18 years
Maximum Age at Entry
60 years
Maximum Age at Maturity
70 years
Minimum Policy Term
10 years
Maximum Policy Term
52 years
Premium paying modes
Yearly, Half-Yearly, Quarterly and Monthly (ECS)
Option of Single Premium
Death Benefit
The plan comes with 3 options for the customer to choose from – 1) Basic Life protection, 2) Income Replacement and finally 3) Loan Protection
1) Basic Life Protection - In case of death of the policy holder, the nominee gets the sum assured under this option.
2) Income Replacement – In case of death of insured under this plan, the nominee gets a regular income every month till the end of the policy holder. This amount will increase by 5% p.a. every policy year on a compounding basis to keep up with rising cost of living.
3) Loan Protection – This option has been tailor made for individuals who avail term plans to cover their liabilities like home loan, etc. On death of the policy holder, the policy will pay off the outstanding loan amount. In this option, the sum assured of the policy reduces uniformly over the policy tenure considering that the liability also goes down with regular payment.
Maturity Benefit
There are no maturity benefits under this plan as this is a pure term insurance product.
Tax Benefit
The policy offers the existing tax benefits -
  • Under Section 80C, premiums up to Rs. 1,00,000/- are allowed as a deduction from your taxable income each year
  • Under Section 10 (10D), the benefits you receive from this plan are exempt from tax, subject to mentioned exclusions
The policy offers a couple of rider options by paying extra premium like
  1. Accidental death benefit
  2. Critical illness (or dread diseases) benefit
Aviva Dread Disease (DD) Rider
  • Has a minimum sum assured of Rs. 2 lakhs
  • This rider is offered only to non-smokers
  • The policy holder has the choice to discontinue this rider on any policy anniversary during the term
  • There is a waiting period of 180 days for any claim admission
  • Diseases that are covered under Aviva Dread Disease Rider are –Heart Attack, Stroke, Cancer, End stage Kidney Failure, Major Organ Transplant, Coronary Artery Bypass Surgery, Benign Brain Tumour, Deafness, Blindness, Aorta Graft Surgery, Heart Valve Surgery, Paraplegia, Motor Neurone Disease, Multiple Sclerosis, Coma, End stage Liver disease, End stage Lung disease, Aplastic Anaemia and Permanent Total disability
In the last few months the insurance space has seen the introduction of many low-premium term insurance plans. Majority of the insurance companies could offer a low pricing because the plans needed to be purchased from the company website through a completely online process. Some of the plans are Aegon Religare iTerm, ICICI Prudential iProtect, MetLife Met Protect, Future Generali Smart Life and Kotak e-Term.
Aviva Life Shield Platinum is very competitively priced against these new term plans and can be purchased directly from any of the Aviva branch offices or agents. The only flip side is it cannot be purchased online as of now. Nevertheless it is a good term plan at very affordable rates.

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