The Hindu Business Line : Aviva Dhanvriddhi

Aviva Life Insurance recently launched a traditional money-back plan, Aviva Dhanvriddhi. A look at the salient features of this product. In general, the money-back policy is suitable for investors targeting cash inflows at regular intervals. The premium for money-back plans is usually pegged higher in comparison to endowment plans. Therefore, investors need to plan how best they can reinvest the periodic receipts from the scheme.

Plan details

Aviva Dhanvriddhi addresses not only the savings and protection needs for the investor, it enables the policyholder to receive payouts at five-year intervals, in the form of guaranteed survival and maturity benefits. This product is designed to provide a guaranteed addition of Rs 70 per Rs 1,000 sum assured for every completed policy year. The sum assured as well as the guaranteed additions are completely guaranteed by insurer and the guaranteed yield is disclosed to the investor at the inception itself.

Who can invest

Aviva Dhanvriddhi is open for investment by individuals between 13 and 55 years of age. In case the investor prefers to opt for the accidental death benefit, the age of entry is between 18 and 50 years. The plan offers flexible terms, with money-back features. The term of the policy can range from 10-25 years and the maximum age at maturity is 70 years (65 in case the accidental death benefit is opted). The policy also provides a payout of 20 per cent of the basic sum assured at regular five-year intervals till the policy matures.

In the event of death, the entire sum assured along with the accrued guaranteed additions are payable, irrespective of the benefits already paid to the policyholder. Premium payments are usually required to be made only in the initial years, with no payments in the final five years of the policy term. For instance, assuming one opts for a 10-year plan, the premium paying term is five years. The minimum sum assured that is accepted by this scheme is Rs 50,000 and, thereafter, in multiplies of Rs 10,000; with no upper cap on the sum assured. Minimum annual premium is Rs 5,000.

Rebates

Aviva Life Insurance also offers a rebate on premia paid when investors opt for higher sums assured. For sums assured of Rs 1,00,000-4,90,000, the rebate allowed is Rs 6 per 1,000 sum assured and for sums of Rs 5,00,000 and above, the rebate offered is Rs 12. The policy provides tax benefits under Section 80C and Section 10(10D) of I-T Act, 1961.

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