Bharti Axa life has
recently launched a new limited premium non linked non participating protection
oriented insurance plan. The plan offers only two term of 10 and 12 years. The policy
holder has the option to pay premiums for limited period i.e. 5,7 and 12 years.
Minimum entry age in the plan is 6 years for 10 year term and 8 years for 12
year term. The maximum age at entry is 65 years. Maximum age at maturity is 75
and 77 for 10 year and 12 year term respectively. Minimum annualised premium is
24,000 for 5 year premium term, Rs. 15,000 for 7 year premium paying term and
Rs. 12,000 for 12 year paying term. There is no upper limit to maximum premium.
The plan also gives the option of choosing three different options for payment
i.e. Annual, Semi Annual and quarterly. The policy holder has to pay higher
premium in case he/she chooses option other than yearly option.
The plan offers
guaranteed pay outs of 8.5% to 9.5% from the end of policy term and also 100%
of the sum assured at maturity. Even the payout looks very attractive one
should note that the same is payable after the policy term is over. There no
compounding effect and therefore don’t judge the product by the % of guaranteed
pay outs. You should also know that these so called guaranteed additions will
also start from end of 12th year and till 19th year. The
maturity amount will be paid at the end of 20th year. So even the
term of the policy is 12 years actually it runs for total 20 years.
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 with an annual premium of Rs. 1,00,000 for 12 years. He will
get guaranteed amount of the premiums paid and also fixed guaranteed payouts. The
IRR is of the plan is only 4.63% 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
|
|
|
|
|
1
|
-1,03,090
|
|
2
|
-1,01,545
|
|
3
|
-1,01,545
|
|
4
|
-1,01,545
|
|
5
|
-1,01,545
|
|
6
|
-1,01,545
|
|
7
|
-1,01,545
|
|
8
|
-1,01,545
|
|
9
|
-1,01,545
|
|
10
|
-1,01,545
|
|
11
|
-1,01,545
|
|
12
|
-1,01,545
|
|
13
|
1,16,779
|
|
14
|
1,16,779
|
|
15
|
1,16,779
|
|
16
|
1,16,779
|
|
17
|
1,16,779
|
|
18
|
1,16,779
|
|
19
|
1,16,779
|
|
20
|
1,16,779
|
|
21
|
12,29,256
|
|
IRR
|
4.63%
|
