Aviva India and Max Life Insurance both have launched online term plans that come with the benefit of guaranteed income to the nominee post the insured’s death.

Sounds good, but the regular income is only for fixed periods of 10/15 years.

sum assured

Aviva i-Life Secure pays 10 per cent of the sum assured as lump sum on the death of the insured. The rest 90 per cent is divided over 15 years and given to the family. Suppose, the sum assured under the plan is Rs 50 lakh. On the death of the policyholder, Rs 5 lakh will be given immediately. Thereafter, every year for the next 15 years, the nominee will receive Rs 3 lakh. Those with a a home loan may have to take a higher sum assured under this plan. Only then, will the 10 per cent immediate lump sum suffice to meet pressing cash requirements.

In the Max Life online term insurance (Level Monthly Income Option), the difference is that the guaranteed income does not eat into the actual sum assured under the plan. If the sum assured is say, Rs 50 lakh, the nominee will immediately get the full Rs 50 lakh on the death of the insured. From the next year, the nominee will get 0.4 per cent of the sum assured (i.e., Rs 20,000 according to the example) every month for the next 10 years. So, the nominee gets the entire sum assured to settle any liability and also gets a monthly income.

MAX Life also provides an option where the monthly income guaranteed under the plan increases at the rate of 10 per cent every year.

In Aviva i-Life Secure, the maximum term of the policy is 25 years, whereas most term plans offer cover for 30 years. For a 30-year-old male (non-smoker), the premium for a Rs 50-lakh sum assured policy for 25 years is Rs 4,363. The same cover with Max Life level income option comes for Rs 6,011. The premium is relatively higher as you get additional sum assured — the monthly income offered is over and above the basic sum assured.

Our opinion

The monthly payout under both the plans is tax free. This makes them attractive. Also, these are cheaper compared to the respective insurer’s plain vanilla term plan.

Sample this: In Max Life’s term plan if one goes with the Level Income option, the premium on Rs 50 lakh sum assured where one actually gets Rs 74 lakh cover staggered over 10 years is Rs 6,348, assuming it is for a 30-year-old male (term- 30 years). But, the basic cover from Max Life for the same Rs 74 lakh comes for a premium of Rs 7,067.

Same is the case with Aviva Life too. For sum assured of Rs 50 lakh for a 30-year-old male (term- 25 years), the premium on Aviva i-Life, the basic term cover is Rs 5,153. The premium on Aviva i-Life Secure is Rs 4,363.

Choose between the two plans based on your financial obligations and how well your nominee is placed to handle money in your absence.


The monthly payout under the two plans is tax-free, making them attractive. These plans are also cheaper than the respective insurer’s plain vanilla term plan.