What Is Return of Premium Option Available in Term Plans?

TROP refers to Term plan with Return of Premium option. This plan is same as any other standard term insurance plan with one difference of return of premiums option available i.e. survival benefit at the end of the policy term.

The primary objective of any life insurance policy is to provide financial protection to your family in case of any unfortunate event in your life. Life insurance plans usually fall into two categories:

  • First in which you can grow your money along with a life cover, and
  • Second, which is meant to provide only financial protection to your family called term insurance plans.

In the case of term insurance plans, there will not be any return on investment (ROI). However, the premiums are also nominal. Term insurance plans primarily to fulfil our life insurance needs only by providing a significant amount of money to the nominee in case of the insured’s unfortunate demise.

Most, term insurance plans do not offer any survival or maturity benefit for the policyholder. However, a term insurance plan with return of premium assures the return of the premiums paid for the life cover if you survive the policy term**.

For instance, Mr. Gupta bought a term insurance plan with a return of premium option for a Sum Assured of Rs 1 crore at a premium of Rs 25,000 per annum* with a policy term of 30 years. In the case of his demise within 30 years of buying the policy (i.e., the policy period), his nominee would receive the Sum Assured of Rs 1 crore.

However, if Mr. Gupta survives the policy term of 30 years; he will receive Rs. 750,000 (25000 x 30) {Exclusive of taxes^}.

Nowadays, most people look for insurance plans that can provide a higher life cover at the lowest possible cost of the premium. Term plans fulfil this criterion. However, given the fact that there are no maturity benefits on the policy, many are discouraged from purchasing a term insurance plan.

This made life insurance companies introduce term insurance plans with return of premium (or ROP) additional benefits in them. In other words, a ROP (term insurance with return of premium optional benefit) is a variant of term insurance plans that provides both a death benefit (in case of an eventuality) and a maturity benefit by returning the premium invested**

Are term life insurance premiums refundable?

Being the purest form of life insurance, term insurance plans do not require you to pay a high premium. As a result, you do not receive any returns on the completion of the policy tenure. When you choose the TROP variant of term insurance; you are entitled to receive the entire amount of premium invested towards the plan on the completion of the policy tenure. In other words, if you survive the policy term, the insurance company will refund the amount of premiums* that you have had invested during the policy term**.

Here it is important to note that insurance companies charge a premium as per the value of claims. Therefore, the higher the expectation, the more is the premium. This is the reason why the amount of premium payable increases with an individual’s age and other associated risk factors. In the case of term plan with ROP optional benefit, given the fact that the insurer will pay back the premium after policy completion, the rate of the premium goes on the higher side.

Who can all avail return of premium option?

The minimum entry age to purchase a term plan with return of premium optional benefit (i.e., ROP) is 21 years, while the maximum age of buying this variant is 55 years. You can purchase the term plan with return of premium (for a policy term of either 20, 25, or 30 years while paying a premium for 11 years only (with Max Life Smart Term Plan).

While the premium payable under the plan varies by age, the insurance companies offer a lower premium rate to female buyers than male buyers. Overall, you can purchase term insurance with return of premium optional benefit, if you are -

If you are single – You have your parents who may depend on you for financial support, especially after their retirement. With a term plan with ROP benefit; therefore, you can help take care of their lifestyle expenses, while you get premium back on your term plan upon surviving the policy tenure.

If you are married with no kids – Your spouse may have no one else to look up to for financial support, but you. Therefore, it becomes crucial that you create a financial backup plan to help secure their future in your absence. Even in case nothing happens to you, you will receive the premium back paid under the term plan with return of premium.

If you are married and have kids – Being a parent, you have the responsibility to take care of your kids’ education and marriage expenses. You are also responsible for your spouse’s financial well-being. A term plan with return of premium optional benefit will help you support your family in maintaining their current lifestyle while offering you a maturity benefit on surviving the policy tenure.

Why should you choose a term plan with return of premium option?

All of us want to live a long and eventful life in the presence of our family and friends. To prolong our lifespan and live a healthy life, we make healthier lifestyle choices such as exercising daily and following a wholesome diet plan. We also invest in financial instruments that provide us both income security and wealth creation opportunities, so that we have enough money throughout our lifetime.

Thus, there is ample possibility that if we stay happy, positive, healthy, and away from stress, we can outlive our life insurance plan. So, term insurance with ROP optional benefit comes as an advantage, as it offers to return the premiums to you on your successful survival against the uncertainties of life.

Term insurance with ROP feature (available on payment of additional premium) also offers benefits such as waiver of premium benefit, accidental death benefit, disability benefit, and protection against critical illnesses.

At Max Life Insurance, we strongly believe in the idea that all our customers should stay happy and healthy and live longer. With our TROP variant of life insurance; therefore, we help ensure that you and your family have peace of mind and financial security in all walks of life. 

Is return of premium option costly?

Among all the available life insurance options, term insurance plans provide the higher life cover at the lowest possible cost of the premium. You pay a premium for an amount you choose as the Sum Assured. You can either pay the premium in one go (Single Pay), throughout the policy tenure (Regular Pay option) or for a fixed duration (Limited Pay option). The same premium payment options are available under the term plan with ROP feature as well. However, you may have to pay a slightly higher premium under term plan with ROP option than a normal term insurance plan.

For instance, a healthy, 30-year old male can purchase a term insurance plan from Max Life for a Sum Assured of Rs 1 crore and a policy term of 40 years for approximately Rs. 13,688, payable annually for 30 years (Pay till 60).

On the other hand, buying a term plan with ROP benefit for the same Sum Assured and policy term may cost up to Rs. 11,600^^.

However, unlike a normal or basic term plan, the ROP variant of term insurance provides the entire premium** paid by the policyholder at the time of maturity.  Also, the premium paid towards the plan coverage is exempt from taxation under Section 80C under Income tax act of 1961.

Which Max Life Insurance plans offer ROP optional benefit?

The ROP variant of term insurance is available under Max Life Smart Term (Non-Linked Non Participating Life Insurance Plan (UIN - 104N113V01))

How can you get a term plan with return of premium option??

Finding the right term insurance plan with ROP benefit is an easy task if you keep the following factors in mind:

  • The cover amount must be enough to help secure your family’s financial future in case something happens to you
  • The rate of premium should be affordable
  • The insurer’s claim settlement ratio (CSR) must be high (Max Life Insurance has a claims settlement ratio of 98.74% (as per the IRDAI public disclosure FY’18-’19)
  • Choose between the mode of premium payment as per your comfort (you can either go for a one-time payment or opt for annual, half-yearly, quarterly or monthly payments)

Buying term insurance with ROP benefit from Max Life insurance company is quick and hassle-free. You can opt for the term plan with ROP variant while purchasing the Smart Term Plan. Here are a few hallmarks of our life insurance plans:

  • Multiple channels for a seamless buying experience
  • No bulky paperwork while buying or paying a premium for policies
  • Dedicated claim settlement officer to make the claim process effortless
  • Multiple premium payment channels, including net banking, digital wallet, credit cards, and debit cards
  • Here is the breakdown of our buying process:

Step 1: Select your policy term, and the sum assured

The first step is to use the online life insurance calculator to calculate the premium for the desired sum assured and tenure of the term plan.

Note: The ideal benefit amount for your life insurance plan should be 10 to 15 times your annual take-away income.

Step 2: Choose Riders

The next step will be to choose add-on benefits, in the form of riders over and above the base cover. These additional benefits enhance your financial protection in case of unfortunate events such as a disability or being diagnosed with a life-threatening health condition. These optional benefits are available on payment of additional premium.

You can choose from the following rider options:

* Critical illness cover that offers to cover up to 40 illnesses

* Accidental death and disability benefit

* Premium waiver benefit, applicable in case of diagnosis of critical health condition or disability

Step 3: Payment of Premium

After selecting the plan and its benefits, you can proceed to complete filing of personal information and pay the premium. You will need to fill out the following information and make the payment:

* Income, education, and profession details

* Nominee details

* Present Address (where the medical test will take place)

You have the option to pay the premium online using net banking, debit or credit card

Step 4: Fill out the Proposal Form

Essentially, the proposal form is a detailed version of your application form, which focuses on the information related to your life such as your lifestyle habits (such as smoking and drinking) and medical history (including that of your parents)

Step 5: Medical Tests

In some cases, based on individual life-risk, a medical test may be proposed. Any such medical evaluation will be conducted after the successful completion of the proposal form and document submission.  

Return Of Premium option with MWPA

According to the Section 6 of the Married Women's Property Act (or MWPA), 1874, if a married person purchases any insurance policy, on his own life and endorses it under MWPA (in favour of his spouse and children), no other person (insured’s parents, friends or relatives) will have any right to the insurance plan benefits.

The insured himself will also not have any claim to the survival benefits of the policy if he survives the plan term. Overall, if you choose to purchase a term plan with TROP benefit and endorse it under MWPA, making your wife or children the beneficiaries, you will entitle them to both the sum assured (in case of your death) and the survival benefits/refund of premiums (in case you survive the policy term).

Return of Premium Option And Surrender Value

When you purchase a term plan with return of premium option and decide to discontinue paying the premium under the plan or surrenders the policy, you will receive a Surrender Value of the policy.

The surrender value of the TROP plan is subject to the below-mentioned criteria:

  • For Single Premium variant: After payment of single premium
  • For Limited Pay variant and Regular Pay variant: On payment of two full years’ premium, where the Premium Payment Term is less than 10 years
  • On payment of three full years’ premium, where the Premium Payment Term is 10 years or more
  • The surrender value is the higher of Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV)

Here the Guaranteed Surrender Value is calculated by the following formula: 

GSV factor x (Total premiums paid for base policy including extra premium (if any) but excluding modal extra and any applicable taxes, cesses or levies)

‘Total premiums paid for base policy’ refers to the total annualized premium paid under the policy including premiums for Life Stage Add on Sum Assured (if any)

The GSV Factors are as follows:

Policy Year

% of Total Annualised Premiums Paid

Single Pay variant

Limited and Regular Pay variant

1

70%

NIL

2

70%

For Premium Payment Term less than 10 years: 30%

For Premium Payment Term of 10 years or more: NIL

3

70%

30%

4

90%

50%

5

90%

52%

6

90%

54%

7

90%

56%

8 +

90%

Graduating linearly from 56% to 90% during the last two policy years

Minimum (56% + [(34% x (N-7)) /(Policy Term - 8)], 90%)

N : Year of Surrender

 

Applicable for all variants

  • Surrender Benefit (or Early Exit Value) is only applicable for base death benefit cover and not on add-on options such as Accelerated Critical Illness Benefit option or Accident Cover option.
  • Surrender Benefit (or Early Exit Value) will be payable only after the policy has acquired a Surrender Value (or Early Exit Value)

Live Life to The Max

When it comes to insurance and investment, all of us are on the lookout for instruments that can provide a significant life cover and return on investment (ROI). There is nothing wrong in doing so because all we want to secure financial future along with maximizing our savings and productively use them to create wealth.

Nevertheless, we must understand that ROI should not be the only criteria to look for a sound investment tool. When it comes to life insurance; therefore, ROI does hold importance, but not always. 

Therefore, to stay protected both physically and financially, you need to take appropriate steps early on in your lives. Exercise daily, eat healthier meals, spend time with your family, and keep your mind stress-free. On the financial front, you may choose to explore a term insurance plan with ROP optional benefit (on payment of additional payment), which will help you make sure that your family’s dreams and aspirations are protected financially against any eventualities.

**Total premiums paid inclusive of any extra premium but exclusive of all applicable taxes, cesses or levies and modal extra

* Assumed annual premium and rounded off; exclusive of taxes, modal extra and premium paid towards additional/optional or rider benefits

^ Tax applicable as per the taxation laws of the current financial year

^^the sample amount has been taken from the Smart Term Plan product brochure  for Life Cover Variant

Tax benefits On Term Plan with Return of Premium Option

Term insurance plan with ROP offers tax benefits as per the prevailing tax laws. Thus, the premium paid towards the policy and the benefit amount drawn is tax-free under Section 80C and 10(10D) respectively of the Income Tax Act, 1961.

Therefore, you can avail a tax deduction up to Rs. 1.5 lakh on the premium invested in the term plan with return of premium. Overall, if you are conservative policyholder, you can use the premium paid towards the term plan to reduce your tax liability considerably.

Return of Premium Option with Limited Pay

Max Life Insurance offers several premium paying tenures under its Term Insurance Plan with ROP optional benefit. Under the Max Life Smart Term Plan; you can choose from the following premium payment tenures:

  • Single Pay (you pay the entire premium amount payable as a lump sum in one go)
  • Regular Pay (you pay the premium amount throughout the term plan tenure either annually, half-yearly, quarterly or monthly)
  • Pay till 60 (you pay the premium till the age of 60 years while the plan coverage extends up to 85 years of age)
  • Limited Pay (you pay the premium for a fixed number of instalments, i.e., 5 Pay, 10 Pay, 12 Pay or 15 Pay)

What Do You Get From Smart Term Plan?

Every individual has different needs life. Whether it is about protecting their child’s future or making sure that they can repay their home loan, people have varied expectations with term life insurance. Max Life Smart Term Plan offers a plethora of life insurance benefits and policy variants to choose from. The plan helps each policyholder to create their personalized all-around protection through term insurance.

Here are a few reasons why you must buy Max Life Smart Term Plan

What Do You Get From Smart Term Plan?

Every individual has different needs life. Whether it is about protecting their child’s future or making sure that they can repay their home loan, people have varied expectations with term life insurance. Max Life Smart Term Plan offers a plethora of life insurance benefits and policy variants to choose from. The plan helps each policyholder to create their personalized all-around protection through term insurance.

Here are a few reasons why you must buy Max Life Smart Term Plan

In general, term insurance plans do not have a maturity value; these plans protect your family’s financial future in case of an eventuality. However, Max Life Smart Term Plan has an option of return of premium.

In other words, if you survive throughout the policy term, you will be eligible to receive the complete amount of annualized premiums that you had paid under the base policy* . After that, the policy will terminate.

The Premium Back feature is available under all the death benefit payout options, so there is no need to panic. You can create a personalized term insurance plan and then, avail the maturity benefit after surviving the policy term.

Please note, any additional premium amounts charged for optional benefits such as accelerated critical Illness benefit, accident cover option or rider add-ons will not be a part of the benefit (return of premium) that you will receive upon maturity.

Max Life Smart Term Plan offers you to pick a policy term that you desire, with life insurance term of up to 50 years and avail coverage ceasing age of 85 years.

The primary purpose of life insurance is to help you tackle emergencies. If it is an unexpected medical emergency, you need an insurance plan that is flexible enough to help you out in every situation. 

Take critical illnesses, for example. If you are diagnosed with any one of the severe health concern such as heart conditions or cancer, Max Life Smart Term Plan can help you avail immediate financial help in the form of accelerated payouts under its Accelerated Critical Illness (ACI) Benefit.

The ACI benefit covers you against as many as 40 critical illnesses. Not only this, you have the freedom of increasing the plan coverage during your policy term. In other words, Max Life Smart Term Plan will provide coverage that stays relevant to your age and health. As explained above, you can avail the Accelerated Critical Illness (ACI) benefit with Max Life Smart Term Plan. If youare diagnosed with any of the specified Critical Illness (as described within the policy document), the benefit is payable.

There are two options available under Accelerated Critical Illness (ACI) cover to choose from:

a) Level ACI Benefit

In this variant, you will receive a fixed and level amount of insurance benefit (or ACI Sum Assured) throughout a specific policy term (also known as the ACI policy term.)

You can choose the ACI Sum Assured in multiples of 5 lakhs as per the boundary conditions mentioned below: 

Minimum ACI Sum Assured

Maximum ACI Sum Assured

Rs. 5 lakhs

50% of the base policy Sum Assured (chosen at the time of policy purchase) or Rs. 50 lakhs, whichever is lower

b) Increasing ACI Benefit

In this variant, the benefit amount or ACI sum assured will increase annually at a simple rate of 5% of the total base policy coverage amount. 

You can choose the ACI Sum Assured in multiples of INR 5 lakhs as per the boundary conditions mentioned below: 

Minimum ACI Sum Assured

Maximum ACI Sum Assured

Rs. 5 lakhs

25% of base policy Sum Assured chosen at the inception of policy or Rs. 25 lakhs, whichever is lower

To summarize, the maximum increase that you can avail under the Accelerated Critical Illness benefit allowed will be:

  • 50 lacs, or
  • 50% of the base policy Sum Assured, or;
  • 200% of the ACI Sum Assured chosen at the time of policy purchase

Furthermore, you must understand that the ACI benefit is accelerated and not an additional benefit. In other words, once you avail the benefit, your policy will continue the protection. However, the term coverage amount under the base policy will get reduced by the amount equal to the ACI Sum Assured paid. 

Also, the maximum payout that you can avail under the ACI benefit is 100% of the ACI Sum Assured. Once you have exhausted the ACI Sum Assured, you cannot make further ACI claims.

At the time of purchase, you can also choose whether you want to pay the premium amount all at once, or you wish to pay the premium for a limited period only. In case you want to continue paying the premium amount throughout the policy tenure, you can do so too! 

Max Life Smart Term Plan enables you to select a premium payment mode as per your budget so that you have enough bandwidth to take care of other expenses as well. You have the flexibility to choose to pay the premiums annually, half-yearly, quarterly, or every month.

Here is a summary of the different policy and premium payment options available under Max Life Smart Term Plan: 

Variant

Policy Tenure

Minimum Premium Payment Tenure

Single Pay

10 to 50 years

Only once

Regular Pay

10 to 50 years

10 to 50 years

Limited Pay (5 Pay)

10 to 50 years

Up to 5 years

Limited Pay (10 Pay)

15 to 50 years

Up to 10 years

Limited Pay (12 Pay)

17 to 50 years

Up to 12 years

Limited Pay (15 Pay)

20 to 50 years

Up to 15 years

Pay till 60

The policy term will be higher than the tenure for premium payment (a maximum of 50 years)

 

16 years

 

For each one us, our needs and aspirations evolve with time. In our 20s, we may only think about earning as much money as possible. As we grow up, we look to start a family and plan for retirement.

In short, we need our life insurance plan to evolve with the changing life stages and goals. Max Life Smart Term Plan offers you the option of choosing the ‘Life Stage Add on Sum Assured’ benefit.

As a policyholder, you will be able to increase the total coverage amount under the plan (also known as Sum Assured) on reaching specific ‘Life Stage’ events such as marriage, becoming a parent or buying a house (will be available with additional premium) 

Like the Premium Back option, this benefit is only available when you purchase the policy; you cannot select the benefit later.

Here is a breakdown of the life stage events that are covered under Max Life Smart Term Plan: 

Life Stage events

Add on Sum Assured permissible

Marriage

(once during policy term, not available if married)

 

· You can add up to 50% of the death benefit Sum Assured selected at the time of policy purchase. 

· The Add on Sum Assured cannot exceed Rs. 50 lakhs

Becoming a Parent

(it is applicable for up to two children only)

· You can add up to 50% of the death benefit Sum Assured selected at the time of policy purchase. 

· The Add on Sum Assured cannot exceed Rs. 25 lakh, for each childbirth.

Taking up a House loan
(Once during the policy term)

· You can add up to 50% of the death benefit Sum Assured selected at the time of policy purchase. 

· The Add on Sum Assured cannot exceed Rs. 50 lakhs

**This option can't be exercised in case a Critical Illness claim has been made

 

If you believe that term insurance plans only offer lump-sum payouts, you need to think again. There are seven death benefit variants available under Max Life Smart Term Plan.

Each of these variants offers you complete freedom in deciding how your loved ones should receive the insurance money and use it.

For example, you have the option to choose whether your family should receive the insurance cover amount all at once or get it in the form of a monthly income.

You also have to option to choose whether you want to increase the monthly payouts at certain intervals to counter the rising inflation or increase the insurance coverage in your life as you achieve important milestones in life.

Here is a breakdown of the various payout options available: 

Variant

Description

Features

Life Cover

 Your family receives the insurance coverage all at once

Your family will get the insurance benefit in the form of a Lump Sum Payment

Income Protector

 Your family receives the coverage amount in the form of monthly incomes

· You can decide a certain amount of monthly income (in multiples of Rs. 5,000) 

· The amount will be paid to your family for a period of 10 years, 15 years or 20 years (as chosen by you at policy inception) will be paid to the beneficary post the death of life insured 

Income + Inflation Protector

In this variant, your family will receive an increasing monthly income

· The monthly income is in multiples of Rs. 5,000. 

· The income payout period can either be 10 years, 15 years or 20 years as chosen by you the  at policy inception and will be paid to the beinficary post the date of death of life insured

· Income will increase every year by 10% (simple interest) of the first monthly income payable

Life Cover + Income

Your family will receive a lump sum amount along with a fixed monthly income

· Your family will receive the lump sum payment immediately after your demise 

· The monthly income component will be equal to 0.4% of the Lump sum cover amount 

· The income will be payable for ten years

 

Life Cover + Increasing Income

In this variant, your family will receive a fixed lump sum benefit amount along with an increasing monthly income

· Your family will receive the lump sum payment immediately after your demise 

· The monthly income component will be equal to 0.4% of the Lump sum cover amount 

· The monthly income will increase every year by 10% (simple interest) of the first monthly income payable. 

· The income will be payable for ten years

Increasing Cover

You can increase the insurance benefit amount payable under the plan

· The insurance coverage amount under the term plan will increase by 5% annually (simple interest) 

· The increment will continue up to the 21st policy year 

· Your family will receive the insurance benefit as a lump sum payment

Please note: Accelerated critical illness benefit and life stage add on benefit options are not available with this death benefit variant

Reducing Cover

 In this variant, the benefit amount payable decreases

· The insurance death benefit payable decreases by 5% p.a. (simple interest)

· The decrease happens every 5th policy year

· Your family will receive the insurance benefit as a lump sum payment

· This variant is available if lump sum amount chosen at inception is greater than or equal to Rs. 1 Cr

·  Maximum accident cover sum assured available under the variant is lower of 25% of lump sum life cover amount chosen at inception or Rs. 50 Lacs

Please note: Accelerated Critical Illness and Life Stage add-on benefit options are not available with this death benefit variant.


The following table summarises the availability of the Accident Cover Option, Accelerated Critical Illness, life-stage add-on sum assured and premium back benefits for the different death variants:

Variant

ACI and Life-Stage add on sum assured Benefits

Accident Cover Option

Premium Back

Life Cover

Yes

Yes

Yes

Income Protector

Yes

Yes

Yes

Income + Inflation Protector

Yes

Yes

Yes

Life Cover + Income

Yes

Yes

Yes

Life Cover + Increasing Income

Yes

Yes

Yes

Increasing Cover

No

Yes

Yes

Reducing Cover

No

Yes

Yes

* Total premiums paid inclusive of any extra premium but exclusive of all applicable taxes, cesses or levies and modal extra

How do the death benefit variants work out for you?

Let us understand the working of each death benefit variant in detail.

How do the death benefit variants work out for you?

Let us understand the working of each death benefit variant in detail.

Under this variant, your nominated family member (or nominee) will receive 100% of the insurance benefit (or Sum Assured) that you chose at the time of purchasing the policy.

The amount will be paid out as a lump sum, immediately after your demise.

Example– Anant is a 30-year old marketing analyst. He purchases the Max Life Smart Term Plan Life Cover Variant. The policy details are as follows: 

Death Benefit variant

Life Cover

Sum Assured

Rs. 1 crore

Policy Term

40 years

Premium Payment Term

40 years

Annual Premium

(Exclusive of GST)

Rs.9,500

Thus, after paying 7 premiums, he passes away. Subsequently, his nominee receives a lump sum benefit of Rs. 1 crore and the policy terminates.

In this variant, your nominee will receive a fixed level monthly income for up to 10 years, 15 years or 20 years (you will have to choose the payout period at the time of purchasing the policy) after your demise.

Example: Keshav is a 35-years old project manager. He purchases Max Life Smart Term Plan with Income Protector variant from Max Life. The policy details are below:

Death Benefit variant

Income Protector

Sum Assured

Rs. 1 crore

Payout period was chosen

Ten years

Policy Term

40 years

Premium Payment Term

40 years

Annual Premium

(Exclusive of GST)

Rs.13,685

After paying the premium for 5 years, he passes away. After his death, a monthly income of Rs. 1 lakh is paid out to his nominee for 120 months, starting from the next monthly policy anniversary.

(The figure would depict the premium payments made by Keshav along the (-xy) axis while his demise will be denoted by the (y) axis. The fixed monthly income of Rs. 1 lakh will be depicted along the (xy) axis.)

 

Under this variant, your nominee will receive an increasing amount of monthly income for up to ten years, 15 years or 20 years (you will have to choose the payout tenure at the time of purchasing the policy) as a death benefit.

Also, the monthly income component will increase every year by 10% (simple interest) of the first monthly income payable.

Example: Mr. Kapadia is a 40-year old accountant working with a textile firm. He buys Max Life Smart Term Plan Income +Inflation Protector variant. His policy details are as follows:

Death Benefit variant

Income + Inflation Protector

Monthly Income chosen

Rs. 1,00,000

Yearly Increase

Rs. 10,000

(10% of first-month income)

Payout period was chosen

10 years

Policy Term

40 years

Premium Payment Term

40 years

Annual Premium

(Exclusive of GST)

Rs.24,282

Mr. Kapadia, unfortunately, passed away after paying ten premium payments. Post his demise, his nominee received a monthly income of Rs. 1 lakh, starting from the next monthly policy anniversary of Mr. Kapadia. After that, the monthly income increases by Rs. 10,000 every year and is paid out to his nominee for the payout period of 10 years.

 

Herein, your nominee will receive 100% of the Sum Assured as a lump sum, along with a fixed monthly income.

The monthly income component will be 0.4% of the Sum Assured and will be paid to your nominee for up to ten years after your demise.

Example: Sudesh is a 30-year old chef. He buys Max Life Smart Term Plan Life Cover + Income variant. The policy details are below:

Death Benefit variant

Life Cover + Income

Sum Assured chosen

Rs. 1 crore

Monthly Income payable

Rs. 40,000

Payout period was chosen

10 years

Policy Term

40 years

Premium Payment Term

40 years

Annual Premium

(Exclusive of GST)

Rs.13,062

After paying premiums for ten years, Sudesh passes away. Post his demise; his nominee received a lump sum benefit of Rs. 1 crore. Moreover, the nominee also received a monthly income of Rs. 40,000 for the next 120 months.



As per guidelines of the variant, your nominee will receive 100% of the Sum Assured immediately after your demise.

Also, they will also receive an increasing monthly income, equal to 0.4% of Sum Assured that will increase every year by 10% p.a. (simple interest) of the first monthly income payable. Furthermore, the income payout would continue for the next ten years

Example: Sanchit is a 40-year businessman. He purchases Max Life Smart Term Plan Life Cover + Increasing Income variant. His policy details are as follows:

Death Benefit variant

Life Cover + Increasing Income

Sum Assured chosen

Rs. 1 crore

Monthly Income payable

Rs. 40,000

Yearly Increase

Rs. 4,000

(10% of first-month income)

Payout period was chosen

10 years

Policy Term

50 years

Premium Payment Term

50 years

Annual Premium

(Exclusive of GST)

Rs.28,113

After paying four premiums, Sanchit passes away. His nominee will receive a lump sum payout of Rs. 1 crore. Along with it, the nominee will also receive a monthly income of Rs. Forty thousand for the first year, after which the income will increase by Rs. 4,000 every year and paid out to the nominee for the next 120 months.

Under this variant, the Sum Assured under the base policy will increase by 5% p.a. (simple interest) on each policy anniversary for up to the 21st policy anniversary. In case of your demise within this period, your nominee will immediately receive the Sum Assured amount as a lump sum (which will be effective as on the last policy anniversary).

Example: Rajat is a 30-year old physician. He purchases the Max Life Smart Term Plan Increasing Cover Variant. The details of the policy purchased by him are as follows:

Death Benefit variant

Increasing Cover

Sum Assured chosen

Rs. 1 crore

Yearly Increase in Sum Assured till completion of the 21st policy anniversary

Rs. 5 lakhs

Policy Term

40 years

Premium Payment Term

40 years

Annual Premium

(Exclusive of GST)

Rs.15,400

After paying a premium for 5 years, Rajat passes away due to illness. The Sum Assured effective as on the last policy anniversary will be Rs. 1.2 crores (as shown in below table) is paid out as lump sum to his nominee, after which the policy terminates.

Number of premiums paid

Sum Assured effective during the last policy year

Increase in Sum Assured

Effective Sum Assured

1

Rs. 1 crore

(base sum assured chosen by Rajat)

0

Rs. 1 crore

2

Rs. 1 crore

Rs. 5 lakhs

Rs. 1.05 crore

3

Rs. 1.05 crore

Rs. 5 lakhs

Rs. 1.1 crore

4

Rs. 1.1 crore

Rs. 5 lakhs

Rs. 1.15 crore

5

Rs. 1.15 crore

Rs. 5 lakhs

Rs. 1.2 crore

 

Under the variant, the Sum Assured decreases by 5% p.a. (simple interest) on completion of every 5th policy year. In case of your demise within this period, your nominee will immediately receive the Sum Assured amount as a lump sum (which will be effective as on the last policy anniversary).

Example: Mr. Sharma is a 45-year old real estate developer. He buys Max Life Smart Term Plan Reducing Cover Variant. The policy details are as follows:

Death Benefit variant

Reducing Cover

Sum Assured

Rs. 10 crore

Reduction in Sum Assured on completion of every five policy years

Rs. 50 lakhs

Policy Term

40 years

Premium Payment Term

40 years

Annual Premium

(Exclusive of GST)

Rs.204,000

The effective Sum Assured for a given policy year for Mr. Sharma is shown below:

Policy Year

Sum Assured effective during the last five policy years

Reduction in Sum Assured

Effective Sum Assured

1 to 5

Rs. 10 crore

(base sum assured chosen by Mr. Sharma)

0

INR 10 crore

6 to 10

Rs. 10 crore

Rs. 50 lakhs

Rs. 9.5 crore

11 to 15

Rs. 9.5 crore

Rs. 50 lakhs

Rs. 9 crore

16 to 20

Rs. 9 crore

Rs. 50 lakhs

Rs. 8.5 crore

21 to 25

Rs. 8.5 crore

Rs. 50 lakhs

Rs. 8 crore

26 to 30

Rs. 8 crore

Rs. 50 lakhs

Rs. 7.5 crore

31 to 35

Rs. 7.5 crore

Rs. 50 lakhs

Rs. 7 crore

36 to 40

Rs. 7 crore

Rs. 50 lakhs

Rs. 6.5 crore

After paying 27 premiums, Mr. Sharma passes away due to illness. After that, the Sum Assured effective in the 27th policy year, which comes out to Rs. 7.5 crores (as shown in the table above) is paid out as lump sum to his nominee.          

Notes:

  1. Kindly note that the above case studies are only examples and do not in any way create any rights and/or obligations.
  2. You may be entitled to certain applicable tax benefits on your premiums and policy benefits. Please note that all the tax benefits are subject to tax laws prevailing at the time of payment of premium or receipt of benefits by you. It is advisable to seek an independent tax consultation.
  3. Extra premium payable for substandard lives as per company’s Board approved underwriting policy.
  4. Premium shown in all of the above illustrations is exclusive of GST. 

 

 

 

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Live Life to the Fullest: The Max Life Edge

As a family person, you always try to give your family the best possible living standards and ensure that they fulfill their dreams. However, you are somehow unsure about your family’s future, especially when you are not there to see them through. With Max Life Smart Term Plan, you can put all your fears to rest and achieve peace of mind. Max Life Smart Term Plan offers a comprehensive insurance protection solution, which can be personalized to suit the needs of you and your loved ones. To know more about the other term insurance plans and to calculate the right term life cover for yourself, you can use an online term plan calculator or connect with us over a call.

Live Life to the Fullest: The Max Life Edge

As a family person, you always try to give your family the best possible living standards and ensure that they fulfill their dreams. However, you are somehow unsure about your family’s future, especially when you are not there to see them through. With Max Life Smart Term Plan, you can put all your fears to rest and achieve peace of mind. Max Life Smart Term Plan offers a comprehensive insurance protection solution, which can be personalized to suit the needs of you and your loved ones. To know more about the other term insurance plans and to calculate the right term life cover for yourself, you can use an online term plan calculator or connect with us over a call.

Why Choose Max Life

Here are some of the numbers which speak about our accomplishments

Why Choose Max Life

Here are some of the numbers which speak about our accomplishments
Claims Paid Percentage

98.74%

98.74%

(Source : Annual Results Release FY18-19)

Max Life Presence

239 Offices

239 Offices

(Source : Annual Results Release FY18-19)

Sum Assured

₹7,03,972 Cr.

₹7,03,972 Cr.

In force (individual) (Source : Public disclosure FY18-19)

Assets Under Management

₹62,798 Cr.

₹62,798 Cr.

(Source : Public disclosure FY18-19)

More reasons why our customers choose us

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