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Sowmya Sundar

BIRLA Sunlife Classic Life is a market-linked savings-oriented plan. Though similar to other plans available in the market, it is better suited for high net worth individuals. The high minimum premium and the sum assured eligibility are the limiting factors.

The plan is flexible in terms of premium payment, fund options, allocation and switch between funds. The high transaction size stipulated for transfers, switches or withdrawals and the charges for these activities might, however, discourage an investor from using these facilities. Higher the investment, lower are the charges. If you are a small investor, this plan is not for you.

Plan features

The plan is unit linked and provides life cover and savings. You can choose from four funds depending on your risk preference.

The minimum and maximum equity allocations in the funds are 10 per cent and 50 per cent, respectively, depending on the aggressiveness of the fund.

Allocation and switches: Like other market-linked plans, you can allocate money among the funds in a proportion that suits you and also switch between the funds. Two switches a year are free. Additional switches are charged at 0.25 per cent of the funds transferred subject to a minimum of Rs 100 per switch.

This means that unless the amount you switch is at least Rs 40,000, you would be paying the higher fee of Rs 100. You can change the allocation between funds free of cost once a year. Any additional change would be charged at Rs 100 per change.

Benefits: On death, higher of the sum assured or the policy fund is paid out. The sum assured will be reduced by any withdrawals made in the six months preceding death.

Withdrawal: You can withdraw from the fund account up to four times a year. Two withdrawals are free of charge. The rest will be at 0.5 per cent of the amount withdrawn or a minimum of Rs 100. The minimum premium is Rs 25,000 and the minimum face amount is Rs 5 lakh.

Charges: Fund management charges, mortality charges on a one-year renewal basis, surrender charges (for the first four years), switch charges and withdrawal charges are applicable.

Riders: On payment of additional premium, you can opt for additional features such as a term rider, accidental death and dismemberment rider, critical illness rider and critical illness plus rider.

Loyalty points: A loyalty addition of 2 per cent of your average policy fund in the last 60 months will be credited to your policy fund in the form of additional units. You will get the credit on the 10th policy anniversary and on every fifth anniversary thereafter.

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