The Hindu Business Line : Tata AIG's Secured Future Plan

IN case you meet with an accident or become disabled you will not be able to look after your family. In such circumstances, your family needs a regular income to meet monthly expenses. Tata AIG's new personal accident policy "Secured Future Plan" addresses the issue. The policy ensures a regular monthly income for a chosen period in case of death in an accident or total disability.

Most other accident plans in the market pay out a lumpsum on death or total/ partial disability. In such a case, the onus of investing the proceeds prudently to maximise returns falls on the beneficiary.

However, a regular guaranteed monthly income chosen for a specific period obviates this necessity and ensures that the financial need of one's family is addressed if the breadwinner if impaired by a disability.

There are other life insurance plans that give you the option of taking an accident cover at an extra cost. These plans are usually available for a limited sum, usually Rs 10 lakh. The benefit is usually paid out as an annuity over a five- or 10-year period, as in the case of Max New York Life or ICICI Prudential. The annuity that you would receive may not be adequate to sustain the financial needs of a family, given the cap on the rider sum assured.

Tata AIG's plan is positioned in a difference space. Apart from giving you a monthly benefit, it also gives you the option of choosing a higher payout and a longer term than that offered by other plans.

The monthly benefit can range between Rs 10,000 and Rs 35,000. The payment period can be between five years and 20 years.

In other plans, the maximum benefit can be only Rs 10 lakh; the payout under Tata AIG's plan can be up to Rs 84 lakh (Rs 35,000 paid over 240 months). The minimum payout would be Rs 6 lakh (Rs 10,000 for 60 months).

Premiums: The premium is in line with that for other accident products. The premium per Rs 1,000 paid out can be anywhere between Rs 1.29 and Rs 1.49, depending on the payout period and the guaranteed monthly income. The premium is paid on a one-year renewal basis. Since the premium is not dependent on age, a one-year renewal system will not affect the plan's cost.

Moreover, it gives you the flexibility to opt and discard the plan at any time, like any non-life insurance plan. However, premium payments made would not be entitled to a tax rebate; the receipts, however, would be tax-free.

Further, the policyholder would not stand to receive a payout in case he suffers partial disability.

If you are looking for greater financial stability for your family should an unfortunate development befall you, then this plan can merit a look in.

(Readers are requested to compare products featured under this column with similar ones offered by other players.)

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