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Sowmya Sundar

METLIFE India's `MetLife Sukh' — a simple money back policy with no frills attached — is targeted at the 15-55 age group. This policy is different, as it pays a guaranteed return over and above the sum assured on maturity or death. Most other policies have phased out guaranteed returns. However, the policy does not declare bonuses.

How it works?

You pay regular premiums for the full policy term, that is, 20 years. A guaranteed addition of Rs 100 per Rs 1,000 of the face amount will be added to the same at the end of every policy year. These additions are not compounded, and are paid out only on death or maturity. You get 20 per cent of the sum assured at the end of five, 10 and 15 years. On maturity, that is, after 20 years, you get back 40 per cent of the sum assured plus accrued guaranteed additions.

For instance, for a sum assured of Rs 5 lakh, the payout will be Rs 1 lakh each on the fifth, 10th and 15th year. After 20 years, you will receive Rs 12 lakh as survival benefit.

The payout includes Rs 2 lakh (balance 40 per cent of the SA) and Rs 10 lakh guaranteed addition (10 per cent of the sum assured accumulated for 20 years). The net returns on the policy works out to 5 per cent for a 35-year-old male for Rs 5 lakh SA.

On death during the policy term, the sum assured plus guaranteed additions is paid out regardless of the earlier payouts.

If premium payments are discontinued, the policy acquires paid up value with reduced sum assured.

Loan

A loan up to 90 per cent of the guaranteed surrender value can be taken against the policy after three years.

Riders

The following riders can be appended to the base policy to enhance protection — Accidental Death Benefit, Term rider, Waiver of Premium and Critical Illness.

Suitability

A person on the lookout for guaranteed additions can look at the policy. The plan is not very flexible as it is available only for a 20-year term, and the limited premium payment option is not available. However, the guaranteed addition is attractive.

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