Financial Daily from THE HINDU group of publications
Sunday, Jan 19, 2003
Financial Daily from THE HINDU group of publications Sunday, Jan 19, 2003 |
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Investment World
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Life Insurance Money & Banking - Life Insurance Birla Sun Life Endowment Plan: Flexi Save Plus Nath Balakrishnan
THIS week, we will look at Birla Sun Life's Flexi Save Plus Plan — an endowment plan. Like other endowment plans, it offers a combination of savings and security cover.
How the policy works
The plan is open to those in the 1-65 age group with a minimum sum assured of Rs 75,000 (Rs 50,000 for minors). The plan duration ranges from 10-30 years (in steps of five years), or it can be made to mature at a specific age such as 60, 65, 70 or 80. A feature of this policy is the premium paying term. Unlike other plans that require premium payment over the entire tenure, one can pay the premium either over a restricted term — over five years for a 10-year policy, but cover exists over the entire policy term — or in the form of a single premium. With the fate of tax rebates on insurance premium payments hanging in the balance, the single premium option is especially attractive. The insuree can also choose an investment plan that suits his risk profile. The `Protector' plan guarantees a return of 6 per cent; the `Builder' plan 4.5 per cent, and the `Enhancer' plan 3 per cent. These are computed on the investible portion of the premium. Should the company generate higher returns, the same will be passed on to the policyholder. On maturity, the insuree receives the surrender value plus the bonuses generated, if any, over and the above the guaranteed return under the chosen plan. If the insuree dies during the plan's tenure, the beneficiary will receive the sum assured, the accumulated bonuses till that date, and the non-guaranteed additional bonuses. The insuree can also withdraw bonuses after three years and take a loan up to 90 per cent of the surrender value.
Riders
The plan provides for four riders — Critical Illness Rider, Term Rider, Waiver of Premium Rider and Accidental Death and Dismemberment Rider.
Suitability
Apart from the benefits of a conventional endowment plan, it is the flexibility in the premium payment term and the non-reversionary bonuses that make this plan definitely worth a dekko.
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