Financial Daily from THE HINDU group of publications
Sunday, Jun 13, 2004
Financial Daily from THE HINDU group of publications Sunday, Jun 13, 2004 |
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Investment World
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Life Insurance Money & Banking - Life Insurance Columns - Insurance Corner AMP Sanmar's Raksha Shree Plus Nath Balakrishnan
Under the new plan, the policyholder, on survival up to the plan's maturity, would receive a refund of all premium payments made, excluding those made towards riders and any additional premiums, if any.
Plan features
A pure term is the most basic form of insurance. Under such a plan, a payout equal to the assured sum is made to the beneficiaries if the policyholder dies during the term of the plan; however, there are no survival benefits under this plan and all premium payments made have to be foregone. Plans such as the Rakhsha Shree Plus are essentially aimed at addressing a set of customers who find it difficult to reconcile themselves to the notion that there are no survival benefits attached to a policy. Hence, the feature of a refund of premiums as a survival benefit. Under this plan, should the policyholder die during the currency of the plan, his beneficiaries would receive the sum assured, as in the case of a pure term plan. Premiums for plans that have a refund of premium feature would, however, be higher compared to a pure term plan for the same sum assured.
Riders
Two riders can be appended to the basic plan. These riders are available for the regular premium payment option only. The Accidental Death and Total and Permanent Disability Benefit Rider provides for a payout in case the policyholder meets with death following an accident. The benefit amount can be equal to the basic sum assured. Should the policyholder suffer total and permanent disability, the rider amount would be paid over ten equal instalments. In such a case, all future premium payments, subject to a maximum of Rs 40,000 per annum, would also be waived. Should the plan mature or if the policyholder meets with death after the payment of instalments has commenced, the portion of the instalments that is yet to be paid will be given out as a lumpsum. The Critical Illness Benefit Rider seeks to financially protect the policyholder from one of 10 different critical illnesses. However, if the policyholder meets with death within 30 days of contracting one of the specified critical illnesses, the benefit would not be payable.
Other features
After three years' premiums have been paid, the policy acquires both a paid-up as well as surrender value. No loans are available under this plan.
(Readers are requested to compare products featured under this column with similar ones offered by other players.)
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