• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Sowmya Sundar

IF THE idea of a woman-specific insurance plan interests you, Birla Sun Life's new plan `Woman First' is one that offers a clutch of features, but is expensive.

What is the plan about?

In a nutshell, Woman First is similar to any unit-linked insurance plan with all inherent features such as investment accounts, with different asset allocation patterns, withdrawals after three years, top ups, switch between investment funds and so on. A unique feature is the Critical Illness Rider which covers woman-specific illnesses too. Like a money back plan, the policy also pays 20 per cent of the face amount at intervals of five years into your investment fund account. You can either withdraw the cash or leave it to grow.

Benefits

On maturity, you get the policy fund value. On death, the nominee gets the face amount plus the policy fund value.

Critical Illness Rider

The rider has four components — primary illnesses, specific illnesses, pregnancy complications and congenital anomalies in a newborn child.

The payout ranges from 10 per cent to 100 per cent of the face value depending on the illness. Once you have taken the benefit under one category, you cannot take it again under the same category. However, you can take the benefits under different categories up to a maximum 100 per cent of the critical illness face amount. The policy also includes a number of exclusion clauses under which you will not be eligible to receive payments.

Suitability

The fund guarantees a 3 per cent return on premiums paid net of charges and policy fees. But the charges and fees are high and the returns lower. According to an illustration provided by the company, at the guaranteed return of 3 per cent, the effective return is nil. Assuming the investments earn a 6 per cent return, the effective return is 1.7 per cent as charges eat into the returns.

If you opt for a Critical Illness Rider, the returns may be even lower as critical illness premiums are subject to review annually after five years. A change in the critical illness premium may affect the policy value.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Investment quiz

Copyright © 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line