The Hindu Business Line : Tata AIG Nirbhay Life

A money-back plan is structured in a manner that enables the policyholder to receive payouts at periodic intervals. The plan can be taken in a way that the payouts coincide with, say, child's entry into college or wedding.

As these events entail significant expenses, the payouts would be handy.

Under Nirbhay Life, the policyholder will have to pay premiums over a nine-year term. The policy is available over 12-, 15-, and 20-year terms; in all cases, premiums need be paid only for nine years.

On the plan's maturity, the policyholder will have cumulatively received 130 per cent of the sum assured (SA).

The payouts are staggered over the duration of the plan, with the maximum payout on the policy's maturity. A terminal bonus may also be paid at maturity; this is, however, a function of Tata AIG's investment performance and not guaranteed.

Payout structure

Twelve-year term: 20 per cent of SA at the end of the fourth policy year, 40 per cent of SA at the end of the eighth policy year and 70 per cent of SA on maturity.

Fifteen-year term: 20 per cent of SA each at the end of the third, sixth, ninth and 12th policy years, 50 per cent of SA on maturity.

Twenty-year term: 10 per cent of the SA each at the end of the third, fifth, ninth, 12th, 15th and 18th policy years, 70 per cent of SA on maturity.

Death benefit

In the event of the policyholder's death, the beneficiary will receive double the sum assured, all future premium payments are waived and the structured payouts will continue. In case of death due to an accident, the payout is thrice the sum assured, with the other elements remaining unchanged.

In case of death due to accident when the policyholder's age at entry is below 18, the payout will be double the sum assured, with the other benefits remaining intact.

Should death occur before completion of two policy years, the premiums paid will be refunded with 5 per cent simple interest per annum and the plan will terminate.

Loan facility

Should the policyholder be unable to pay premiums, a loan can be taken to the extent of the premium due (provided the cash value is equal to or greater than this amount) at a rate fixed by the company. A policy-holder can avail himself of the facility only if the plan has been in currency for three years, as the policy acquires a guaranteed surrender value only after this duration.

(Readers are requested to compare products featured under this column with similar ones offered by other players.)

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