Tata AIA has recently
launched a new limited premium non linked participating endowment assurance plan.
The plan offers only one term of 18 years and policy holder has to pay only
first 9 years premiums only. Minimum entry age in the plan is 12 years and
maximum is 55 years. Maximum age at maturity is 73 years. Minimum sum assured
is 2 lakhs and there is no limit to maximum sum assured but the same is subject
to underwriting. The plan also gives the option of choosing three different
options for payment i.e. Annual, Semi Annual and monthly. The policy holder has
to pay higher premium in case he/she chooses option other than yearly option. The
policy also offers large sum assured discount above the sum assured of Rs. 2.50
lakhs. The plan gives minimum guaranteed of sum assured at the time of
maturity. However the reversionary and terminal bonus depends on the
performance and profit of the company.
The points to know
before investing in the plan. The
service tax of 3.09% in first year and 1.545 second year is payable over and
above basic premium. The return is very poor as illustrated below The same can
be understood with the help of following example. If a 35 year healthy male
takes this plan for sum assured of Rs. 10lakhs, then his annual premium will be
Rs. 1,23,750/- exclusive of service tax payable for 9 years only. He will get
guaranteed amount of the sum assured i.e. Rs. 10 lakhs at maturity and plan
also may give non guaranteed bonus which is assumed in the illustration at 4%
and 8% p.a. The IRR is of the plan is only 1.87% considering return on
investment @4% p.a. and 5.46% considering return on investment @8% p.a. which
is calculated with the help of excel and using IRR formula. The detail is as
under. The premium is taken inclusive of service tax.
|
Year
|
Scenario I (@ 4%)
|
Scenario II (@ 8%)
|
|
1
|
-1,27,574
|
-1,27,574
|
|
2
|
-1,25,662
|
-1,25,662
|
|
3
|
-1,25,662
|
-1,25,662
|
|
4
|
-1,25,662
|
-1,25,662
|
|
5
|
-1,25,662
|
-1,25,662
|
|
6
|
-1,25,662
|
-1,25,662
|
|
7
|
-1,25,662
|
-1,25,662
|
|
8
|
-1,25,662
|
-1,25,662
|
|
9
|
-1,25,662
|
-1,25,662
|
|
10
|
-
|
-
|
|
11
|
-
|
-
|
|
12
|
-
|
-
|
|
13
|
-
|
-
|
|
14
|
-
|
-
|
|
15
|
-
|
-
|
|
16
|
-
|
-
|
|
17
|
-
|
-
|
|
18
|
14,43,118
|
22,82,271
|
|
IRR
|
1.87%
|
5.46%
|
