Tata AIA has recently
launched a new limited premium non participating non linked guaranteed return
endowment assurance plan. The plan offers guaranteed annual income payment
after premium paying term is over. The plan offers only one term of 14 years and
policy holder has not to pay only first seven years premiums. Minimum entry age
in the plan is 18 years and maximum is 55 years. Maximum age at maturity is 69
years. Minimum sum assured is 2.50 lakhs with a condition of minimum annual premium
of Rs. 40,000. The plan also gives the option of choosing four different
options for payment i.e. Annual, Semi Annual , quarterly and monthly. The
policy holder has to pay higher premium in case he/she chooses option other
than yearly option.
The guaranteed annual
income payouts beginning from 8th year are as under:
|
Policy
Anniversary
|
%
of Annualised Premium
|
|
8
|
50%
|
|
9
|
70%
|
|
10
|
90%
|
|
11
|
100%
|
|
12
|
110%
|
|
13
|
130%
|
|
14
|
150%
|
The points to know before
investing in the plan. The payout is % of premium and not sum assured. The
return is very poor as illustrated below and further service tax of 3.94% in
first year and 1.545% thereafter will further reduce your return. 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. 88,520/- exclusive of service tax. He will get guaranteed annual income as
per table given above and additional 25% of the sum assured at the end if all
premiums are paid. He has to pay premium for 7 years only. The IRR is of the
plan is only 3.94%, 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
|
Premium & Pay
Outs
|
|
|
1
|
-91255
|
|
|
2
|
-89883
|
|
|
3
|
-89883
|
|
|
4
|
-89883
|
|
|
5
|
-89883
|
|
|
6
|
-89883
|
|
|
7
|
-89883
|
|
|
8
|
44260
|
50% of premium
|
|
9
|
61964
|
70% of premium
|
|
10
|
79668
|
90% of premium
|
|
11
|
88520
|
100% of premium
|
|
12
|
97372
|
110% of premium
|
|
13
|
115076
|
130% of premium
|
|
14
|
382780
|
150% of premium +
25% of bonus
|
|
IRR
|
3.94%
|
|
Premiums are shown in negative and payout in positive.
