Product crack: Future Generali Life’s Triple Anand Advantage2 min read . Updated: 01 Apr 2015, 06:38 PM IST
It is a traditional participating plan with triple benefits
Future Generali India Life Insurance’s Triple Advantage Anand Plan is a traditional participating plan with triple benefits.
What does it offer?
The participating plan ensures periodic income for five years at the end of the premium-payment term, a lump sum payment at the end of the policy term and again when you turn 80 years of age. There are two premium-payment terms to choose from: 15 years and 20 years. Premium-paying term means the number of years for which one has to pay an annual premium. The policy term in this policy is the premium-payment term plus five years.
Once the premium-paying term is over, the policy will pay 10% of the sum assured every year for five years—which means 50% of the sum assured. Then, at the end of the policy term, it will pay the balance 50% as a lump sum.
Since this is a participating plan, every year during the policy term, the policy will declare a compounded reversionary bonus depending upon the performance of the participating fund. This bonus will be declared as a percentage of the sum assured and will be a guaranteed addition to the sum assured payable on death or maturity, at the end of the policy term along with the payment of balance sum assured. The policy may also pay terminal bonus at this stage.
No more bonuses accrue after this, but the policy continues. Once you turn 80, the policy pays the sum assured again, and terminates thereafter.
In terms of insurance benefit, in case of death, the beneficiary will get higher of 105% of the premiums paid or the sum assured along with all the accrued bonuses. Keep in mind that the sum assured or death benefit in this case will at least be 10 times the annual premium, In case of death after the policy term and before 80 years of age, no bonuses are payable.
How does it work?
Let’s take an example of a 35-year-old man who buys this policy for a premium-paying term of 20 years and for a sum assured of 10 lakh. The annual premium in this case will work out to 66,860. At the end of the 20th year, the policyholder will get 1 lakh (10% of the 10 lakh) every year for five years. At the end of the 25th year, assuming that the participating fund grows at 8% per annum, the policy will pay an amount of around 21.66 lakh. This includes accrued bonuses and the balance sum assured of 5 lakh. Once the policyholder reaches 80 years of age, he will get the sum assured or 10 lakh, and the policy will terminate. The internal rate of return here would be around 5%.
Mint Money take
The insurance component in this policy is very expensive. We recommend that you buy a term plan instead. As per data available with some insurers, traditional plans give an average return of only 5-6%. Therefore, it may be better to invest in a fixed-income product that offers higher returns.