The Hindu Business Line : Allianz Bajaj's UnitGain

The life cover under this plan is a function of the premiums paid. Minimum life cover is five times the annual premium; the maximum life cover is a multiple of the annual premium, which depends on the age group that the life insured belongs to.

Premiums paid can be invested in one of four funds: an equity fund, debt fund, balanced fund and a cash fund. Initially, premiums can be allocated to the four funds in a proportion of one's choosing. Subsequently, funds can be switched, and allocation of premiums to the various funds can also be varied. Three free switches are allowed in a year; subsequent switches attract a charge.

The plan does not have a maturity date. After three years' premiums are paid, money can be withdrawn, either by a full or partial surrender of the units. Surrender of units within the first three policy years entails a surrender penalty of 100 per cent.

Death benefit

If the insuree meets with death, the beneficiary would receive the sum assured minus withdrawals or the bid price of the units, whichever is higher.

In case the age of the insuree is below seven or above 70, then the bid value of the units is paid.

Other features

One has the flexibility of withdrawing the proceeds as a lumpsum or as and when required.

Raising and lowering the levels of sum assured, bringing in additional funds as top-ups and raising the level of regular premiums are some of the other facets of this policy.

Additional benefits

To enhance the level of protection, one could also add on the following benefits

Accidental Death Benefit

Accidental Permanent Total/Partial Disability Benefit

Critical Illness Benefit

Hospital Cash Benefit

Charges

As with unit-linked plans, there a a few charges that are levied, such as the fund management and administration charge, transaction charge (which differs for equity and debt investments), switching charge, allocation charge and mortality charge, which is on a one-year renewable basis.

This would mean that with advancing age, the charges for life cover for a given sum assured would increase. This, in turn, would reduce the amount available for investment.

Charges for insurance cover are deducted by monthly cancellation of units; the fund management and fund administration charge is priced directly into the unit value.

(Pieces under this column seek to examine insurance products in detail. Readers are requested to compare products featured under this column with similar products offered by other players before arriving at investment decision.)

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