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A triple benefit plan

Monday, October 25, 2010
By Manoj Aswani

 With a lot of hype and buzz around ULIPs, some of the good old traditional insurance plans seem to have been shadowed a bit. Many insurance companies have at least one insurance plan if not many, that is running successfully for quite sometime now. One such plan is Life Partner Plus (LPP) by Max New York Life Insurance. This is an endowment plan, which is often described as a whole life plan. Whatever be the description, the plan continues to perform well and serves as a good instrument for individuals and the company.
Quick look at the Policy Features
  • Triple benefit plan – Protection, Maturity and Money back feature
  • Limited payment term
  • Endowment / Maturity at age 75
  • Money back at 7.5% of the sum assured for the last 15 years of policy term
  • Three options to receive bonus – cash, reinvest or offset premiums
  • Tax benefits on premiums as well as maturity proceeds 
Eligibility Conditions
Sum Assured
Unlimited, subject to underwriting
Age at Entry
91 days
55 years
Age at Maturity
75 years
75 years
Up to age 75
Up to age 75
Premium paying Term
3 years
20 years
  • If death of the life insured occurs after age 60, then the insurance company provides Sum Assured + Accrued bonuses (if any)
  • If death of the life insured occurs after attaining age 10 but before age 60, then the insurance company provides Sum Assured + Sum Assured of Paid up additions (if any)
  • If death of the life insured occurs before attaining age 10, then the insurance company will refund of all premiums paid + interest 
    Maturity Sum Assured + Guaranteed Additions (if any)
  • From the age of 61 till 75, the life insured received 7.5% of the sum assured every year as a money back feature 
The bonus in this policy gets declared from the 3rd year of the policy. The policy provides three options to claim bonus –
1)     Cash – where the bonus is paid in cash to the policy holder
2)     Premium Offset – where the bonus can be used to pay the premiums from a particular time
3)     Paid up additions – where the bonus gets invested in the policy along with premium to generate additional returns
The policy comes with a host of riders to customize and increase the benefits of the policy. The best part is that the policy holder can take these riders at the time of purchasing the policy or even after its in force at a later date. The choice of riders available are:
1)     Personal Accident Benefit rider
2)     Term rider
3)     Term Renewable and Convertible rider
4)     Waiver of Premium rider
5)     Dread disease rider
6)     Payor rider
While each rider is relevant and useful, the two riders “waiver of premium” and “payor rider” really make a good addition to the policy and provide some great benefits.
Sample Illustration
For Sum Assured of Rs. 845,729, a healthy male of 30 years of age who opts for a premium payment term of 20 years, has to pay a monthly premium of Rs.5000 (Annual = Rs.60000). Below is the list of benefits that will be given to him –
  • Money back from age 61 to 75 – Rs.1,20,000 every year
  • Maturity benefit at age 75 [Customer may get either one of the three options listed below. Option a) is guaranteed whereas options b) and c) are assumed returns]
a)     Guaranteed = Rs 9,09, 159
b)    Non-guaranteed at 6% growth rate = Rs 35,25,554
c)     Non-guaranteed at 10% growth rate = Rs 1,39,54,203
LPP has been a fore-runner across all the distribution channels of Max New York Life because the customers really like the benefits offered by this product. Moreover, who doesn’t like to see the stamp of “Guaranteed returns” on his policy document with the cloud of uncertainty hovering on many of the insurance policies.

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