The Hindu Business Line : ING Life Plus Plan

The major difference between traditional insurance products and ULIPs is the flexibility in the premium paying period. Another notable feature is that with ULIPs investment risk moves from the insurance company to the policyholder. A look at ING Life Plus Plan, a ULIP product launched recently by ING Vysya Life Insurance.

Insurance cover: Where the policy term is 10 years, it allows five times the annual premium as sum assured. The sum assured goes up to 7.5 times for 15 years and 10 times for a 20-year term.

Enhanced protection cover: The plan gives policyholders the benefit of enhanced protection for the term, if the premia are paid regularly. In such a case, life cover will increase every year by 5 per cent of the sum assured.

Flexible investments: Policyholders, based on their risk appetite, can choose from five different investment options — debt, secure, balanced, growth and equity.

Maturity Benefit: On completion of the policy terms, the policyholders will receive the fund value as on maturity or as per the settlement option.

Death: On death before the maturity, the sum assured plus enhanced protection cover prevailing at that time or, fund value, which ever is higher, is paid. If the age at entry is less than 12 years, the cover for death benefit will comm ence at the end of two years from the commencement of the policy. For determining the death benefit payable, the total sum assured plus enhanced cover will be reduced by the partial withdrawals availed by the policyholder from the fund value, during the 24 months preceding death.

Partial withdrawals: This is allowed on completion of fifth policy year. One can avail of one partial withdrawal not exceeding 25 per cent of the fund balance per policy year. Fund value after such withdrawal is equal to at least one-and-a-half year’s regular premium. Partial withdrawals are not allowed if the policyholder is a minor. Partial withdrawals are subject to charge.

Settlement options: On completion of maturity, the policyholder can opt for a single lumpsum, or three or five annual instalments, at any time on or after the policy maturity.

Eligibility: Minimum entry age is 10 years and maximum is 45 years. Maximum maturity age is 65 years. Premium and policy terms are 10,15 and 20 years.

Policy administration charge: The charge is Rs 750 in the first month and Rs 50 for every subsequent month during the policy term. Policy administration charge of Rs 50 will increase every policy year at the rate of 5 per cent.

Premium allocation charges: In the first year, 17 per cent of the regular premium would be deducted as charge and 12 per cent for the second year. From third to fifth year it would be 5 per cent. Sixth year onwards no charge would be deducted.

Fund management charge: Based on the fund option chosen, the charge will vary from 0.75 per cent to 1.50 per cent.

Note: Risk-averse investors opting for debt plans need to note that the high deduction of charges out of premium paid (17 per cent in this case) may dent the returns for the first few years. With 17 per cent of the regular premium paid deducted in the first year, only the rest goes into the investment. But generating a return of over 17 per cent in the initial years may be difficult for any pure debt scheme.

This column is intended to acquaint investors with features of new insurance products and is not a recommendation to invest. Investors are advised to compare each product withsimilar ones already available before making a decision.

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