How it works?

You choose a term between five and 10 years and pay premiums — at quarterly, half-yearly or annual intervals. On death during the term of the policy, the sum assured is paid to your nominee.

On maturity, you get back a portion of the premiums paid without interest depending on the term chosen. For instance, for a five-year term, only 50 per cent of the premium is paid back.

The premiums

The premiums returnable increases to 60, 70, 80 and 90 per cent of the premiums paid for the six-, seven-, eight- and nine-year terms respectively. For a 10-year term, the premiums paid are returned in full.

If you discontinue paying premium after three years, the policy still continues to cover your life with a lower sum assured, that is, the sum assured is reduced according to the premiums paid.

You also have an exit option after premiums for three years have been paid. You can surrender the policy and get a surrender value.

Features

The policy is available for those in the 18-55 age group. The minimum and maximum sum assured is Rs 3 lakh and Rs 1 crore respectively. The maximum age at maturity is 65 years. Women get a special rebate of 5 per cent on the premiums.

Suitability

The restricted term is a drawback for those in the 20-35 age-group, as they would prefer to look at a life cover over a longer .timeframe. For those in the higher age bracket, the premium payments might be quite high for the longer tenures. Moreover, you cannot increase protection by covering against specific risks such as critical illnesses, accidental death and disability. Most term plans available in the market, including ones with return of premium option, offer more flexibility with respect to the term chosen and rider options than Swadhan.

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