Aviva Lifeshield Platinum: Attractive premium, income feature

Though insurance plans in general can be quite complicated, term insurance plans, which allow you to buy protection for life are actually quite straightforward. So can there be different kinds of term plans? Yes! Aviva Life Insurance recently launched Lifeshield Platinum, a protection plan that offers individuals a shield for three different kinds of needs. Under this plan, you can choose to cover your outstanding loan amount in event of death, make a lump sum payment to beneficiaries or set up a regular stream of income for your family.

How does it work?

Life Protection plan pays a specific sum assured (decided at the time of taking the policy) as a lump sum to your family or nominee, in the event of death.

Income protection plan pays a regular monthly income to your family. This sum increases by five per cent per annum to meet rising costs of living too.

Loan protection plan starts with a sum assured that covers the outstanding amount on any loan. In the event of your death, the insurance company will pay up the amount required , helping your family to close the loan. The sum assured in this plan reduces every year to match your loan outstanding.

Which one should you choose?

The Life protection plan is most suitable for individuals wish to leave a lump sum to their nominee in the event of their untimely death. Under this plan if you have opted for riders such as Accident Death Benefit and Dread Disease, there may be an additional sum paid out in case of death by accident or critical illness or on suffering permanent total disability. These rider options are available only under this option.

The Income protection plan is ideal for the bread winner of the family, especially in a single incomesituation. Income replacement provides your family with a regular income to meet expenses. The ‘inflation' clause increases the benefit by five per cent each year to keep pace with the rising cost of living. The individual has the option to decide the monthly income and fix his sum assured accordingly. The sum assured arrived is equal to monthly benefit chosen at the inception multiplied by the number of months in the policy term. For instance, if you are aged 35 and wish to protect your monthly income of Rs 41,600 for next 20 years you need to take a sum assured of Rs 1 crore. The annual premium works out to Rs 18,211 for next 13 years.

Features

Premium payment: Yearly, half-yearly, quarterly or monthly.

Minimum sum assured: The minimum sum assured under this plan is Rs 50 lakh . Under the life protection option, premium paying term and the policy term will be equal, whereas in income replacement and loan protection plans, premium paying term will be two-thirds of the policy term.

Health discount: The product offers lower premium rates if you are non-smoker and offers better rates if you are assessed good health.

Comment: The annual premiums are highly competitive for all three plans. They compare well even to online term products, which are 40-50 per cent cheaper than policies bought from agents. Of the three options, the income replacement appears particularly useful especially for younger families, as it really fulfils the vacuum created by the unfortunate death of the bread winner . Life protection is a good option only if the dependents are finance-savvy and can wisely invest the lump sum. Given attractive premia, even existing holders of Aviva's term plans can consider switching , provided their risk cover is close to Rs 40- 50 lakh.

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