Let’s consider Mr. Verma’s (35 yrs) case to explain this plan. He chose Max Life Future Genius Education plan for his son Avinash (3 yrs) with following plan details:
Annual Premium: Rs. 1,00,000 (annual premium payment mode)
Policy Term: 18 years (Limited Pay Variant)
Assuming Mr. Verma chose a Policy Term of 18 years with Limited Pay variant, his Premium Payment Term will be 15 years with a Sum Assured equal to INR 16,85,772. Mr. Verma chose to receive Bonus as a Paid Up Addition (PUA).
We have assumed an average investment return of 4% over the years. It is possible that the total payout may be much higher; for instance, at 8% rate of return, total payout will be = Rs. 25,75, 907.
However, what will happen if Mr. Verma meets with an accident and dies before paying all his premiums?
Let’s say Mr. Verma passes away after 5 premium payments. Totalling to Rs. 5,00,000.
Mr. Verma’s family will receive a lumpsum death benefit of Rs. 16,85,772.
The nominee can choose to convert the same amount in a monthly income of Rs. 16, 857, which will continue for 135 months.
The policy will now continue as it would have in Mr. Verma’s presence with future premiums waived off by Max Life.. The company will also pay the maturity amount as shown in the table above.
*Please note that bonuses are non-guaranteed and declared every year depending on the company’s performance. This means there isn’t any fixed rate of return.