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Aditya Birla Sun Life Insurance Monthly Income Plan – Review, Features and Benefits

Anuradha Singh

Retirement is certain in everyone’s life and hence having funds for the same is a must. The rising cost of living, changing times and needs, etc. in such scenario investment towards retirement corpus is a necessity. We all want to secure our future mostly when it comes to life after retirement.

Not to worry anymore because of the “Aditya Birla Sun Life Insurance Monthly Income Plan” that helps you plan ahead of time and offers assured monthly tax-free income to take care of your recurring needs and bonuses at maturity thereby protecting your retirement goals.

Features of this Policy –

Benefits of this Policy –

a) Income Benefit –

After completion of the Deferment Period, you shall start receiving monthly income benefits in advance as a percentage of the sum assured over the Income Benefit Period as per the option chosen at inception.

You may choose one of the following Income Benefit Option at inception:

  1. Level Income Benefit – Under this option, the income benefit paid will be 1% of the Sum Assured per month and will remain fixed throughout the Income Benefit Period (IBP).
  2. Increasing Income Benefit – Under this option, the income benefit paid will start at 1% of the Sum Assured per month and then such amount of income benefit will increase at 5% simple p.a. after every 12 months during the Income Benefit Period (IBP).

b) Death Benefit –

i) In the event of the death of Life Insured before the commencement of Income Benefit Period the Death Benefit will be the highest of –

Where Sum Assured is the absolute amount assured to be paid immediately on death and the Total Income Benefit is an undiscounted total absolute amount of income benefit payable during the income benefit period. The Income benefit due will commence for the fixed Income Benefit Period from the date of death.

Bonuses will continue to accrue on full Sum Assured till the end of the Income Benefit Period and total bonuses including Terminal Bonus (if any) will be paid at the end of Income Benefit Period.

ii) In the event of the death of Life Insured on or after the commencement of the Income Benefit Period the Death Benefit will be the highest of –

Where Sum Assured is the absolute amount assured to be paid immediately on death and the outstanding Income Benefit is an undiscounted absolute amount of outstanding income which will continue to be paid for the remaining Income Benefit Period. Bonuses will continue to accrue on full Sum Assured till the end of the Income Benefit Period and total bonuses including Terminal Bonus (if any) will be paid at the end of Income Benefit Period.

The Death Benefit payable shall never be less than 105% of total premiums paid up to the date of death

**Annualized premium shall be the premium amount payable in a year chosen by the policyholder, excluding the taxes, rider premiums, underwriting extra premiums, and loadings for modal premiums, if any.

**Total Premiums paid means total of all the premiums received, excluding any extra premium, any rider premium, and taxes.

c) Maturity Benefit –

In the event the Life Insured survives to the end of the policy term, the maturity benefit will be –

The policy shall be terminated once the maturity benefit is paid.

d) Accidental Death Benefit –

In the event of the death of a Life Insured due to an accident, additional benefit equal to the Sum Assured chosen will be paid immediately in a lump sum to the nominee as an Accidental Death Benefit.

e) Regular Bonus Benefit –

This policy will declare compound reversionary bonuses at the end of each financial year and will be added to your policy on its policy anniversary. Bonuses once attached to the policy are guaranteed to be payable, at the end of the Income Benefit Period, in case of maturity or death. In the case of Death, an interim bonus may also be payable.

In case of surrender, the surrender value of the attached bonuses will be payable. The regular bonus rate declared by ABSLI may vary and will depend on the actual experience regarding various factors and the prevailing economic conditions. Future bonuses are however not guaranteed and will depend upon the future profits of the participating business.

f) Terminal Bonus  –

Aditya Birla Sun Life Insurance may also pay a terminal bonus, on maturity, surrender, or death, if earlier, based on the actual experience and the prevailing economic conditions.

g) Reduced Paid-Up Benefits –

If you discontinue paying premiums after having paid for at least two full year’s premiums, your policy will not lapse but will continue on a Reduced Paid-Up basis. Under Reduced Paid-Up, your sum assured and income benefit shall be reduced in proportion to the premium actually paid to the total premiums payable during the premium paying term.

Your regular bonuses accrued till the due date of the first unpaid premium will not be reduced; however, any bonus payable in the year of premium discontinuance shall be reduced proportionately to the unpaid premiums in that policy year. There will be no further accrual of bonuses in the policy.

h) Rider Benefit –

For added protection, you can enhance your insurance coverage during the policy term by adding the following riders for a nominal extra cost.

Eligibility Criteria of the Policy –

Is surrendering of policy allowed in this policy?

Yes, surrendering of policy is allowed after all due premiums for at least two full policy years have been paid. The Guaranteed Surrender Value is equal to a percentage of Total Premiums Paid and the surrender value of accrued bonuses less any income benefit already paid.

The Guaranteed Surrender Value will vary depending on the Premium Payment Term and the year the policy is surrendered.Your policy will also be eligible for a Special Surrender Value. The surrender value payable will be the higher of Guaranteed Surrender Value or Special Surrender Value. The policy shall be terminated once the Surrender Value is paid.

Can I take a loan against this policy?

Yes, the insured can take a loan against their policy once it has acquired a Surrender Value. The minimum loan amount is Rs 5,000 and the maximum is 85% of your Surrender Value.

The company shall charge interest on the outstanding loan balance at a rate declared from time to time based on then prevailing market conditions. Any outstanding loan balance will be recovered by the company from policy proceeds due for payment and will be deducted before any benefit is paid under the policy.

If the outstanding policy loan balance equal or exceed the Surrender Value of your policy at any time, when your policy is in Reduced Paid-up status, then the policy shall be terminated without value.

Can I return the policy if I didn’t like the terms and conditions of the policy?

Yes, the policy can be returned within 15 days (30 days in case of Distance Marketing) from the date of receipt of the policy.This 15 day period is called the Free Look Period.

The company will refund the premium paid once they receive in writing a notice of cancellation (along with reasons thereof) together with the original policy documents. The will further deduct proportionate risk premium for the period of cover and expenses incurred by us on medical examination and stamp duty charges while issuing your policy.

Is there any grace period and revival period in the policy?

If premiums are not paid by the due date, Insured will be given a grace period of 30 days. During this grace period, all coverage under your policy will continue. If the insured do not pay their premium within the grace period, the following will be applicable –

The insured can also revive their policy for its full coverage within five years from the due date of the first unpaid premium by paying all outstanding premiums together with interest as declared by us from time to time and by providing evidence of insurability satisfactory to us. Upon revival, your benefits shall be restored to their full value.

Does this policy has any tax benefit?

On taking this policy, the insured can get tax benefit on premium paid under Section 80C, 80(D), and Section 10(10D) of the Income Tax Act, 1961.

Exclusion under the Policy –

The company will pay the total premiums paid till date or surrender value available on the date of death, if higher in the event the life insured dies due to suicide, within 12 months from the date of commencement of risk under the policy or from the date of revival of the policy, as may be applicable provided the policy is in force or active.

The policyholder shall not be entitled to any benefits for the death of the Life Insured directly or indirectly due to or caused, occasioned, accelerated or aggravated by any of the following –

  1. Death as a result of any disease or infection other than directly linked with an accident.
  2. Attempted suicide or self-inflicted injury while sane or insane.
  3. Participation of the insured person in criminal, illegal activity, or unlawful act with criminal intent.
  4. Taking or absorbing, accidentally or otherwise, any intoxicating liquor, drug, narcotic, medicine, sedative or poison, except as prescribed by a registered medical practitioner.
  5. Nuclear Contamination; the radioactive, explosive, or hazardous nature of nuclear fuel materials or property contaminated by nuclear fuel materials or accidents arising from such nature.
  6. Entering, exiting, operating, servicing, or being transported by any aerial device or conveyance except when on a commercial passenger airline on a regularly scheduled passenger trip over its established passenger route.
  7. Engaging in or taking part in professional sport(s) or any hazardous pursuits, including but not limited to, diving or riding or any kind of race; underwater activities involving the use of breathing apparatus or not; martial arts; hunting; mountaineering; parachuting; bungee jumping.
  8. War, terrorism, invasion, the act of a foreign enemy, hostilities (whether war be declared or not), armed or unarmed truce, civil war, mutiny, martial law, rebellion, revolution, insurrection, riot or civil commotion, strikes. War means any war whether declared or not.
  9. Service in the armed forces in time of declared or undeclared war or while under orders for warlike operations or restoration of public order.
  10. Accident occurring while or because the Insured is under the influence of Alcohol or Solvent abuse or taking of drugs, narcotics or psychotropic substances unless taken in accordance with the lawful directions and prescription of a registered medical practitioner.

Conclusion –

So, by now you know each and every important detail about this policy. Do let me know if I have missed any important points in the comment section. Please feel free to ask any doubts regarding this policy.

 

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