Aditya Birla Sun Life Launches Vision LifeIncome Plus – Get Guaranteed Income for 30 years or life long

Aditya Birla Sun Life Vision LifeIncome Plus – Features, Benefits and ReviewAditya Birla Sun Life Launches Vision LifeIncome Plus – Review

Few days back, Aditya Birla Sun Life Insurance (ABSLI) has launched Vision LifeIncome Plus plan. This is an insurance cum investment scheme where one can get guaranteed income for 30 years or lifelong and life coverage up to 100 years. What is Aditya Birla Sun Life Insurance Vision LifeIncome Plus Insurance Scheme all about? Should you opt for Aditya Birla Sun Life Insurance Vision LifeIncome Plus Insurance? What are the hidden or negative factors in this plan?

What are guaranteed Income Schemes?

Insurance companies keep floating insurance cum savings schemes where there is specific payouts done every month of every year after premium payment term. These are termed with various captions like guaranteed income schemes or money back policies or endowment policies.

Few days back, Exide Life Insurance also launched Guaranteed Income for 30 years where we have reviewed it and indicated it as “psychological happiness” being created by such policies. Now insurance companies are floating policies with such “guaranteed income” captions.

Aditya Birla Sun Life Insurance Vision LifeIncome Plus – Key Features

This is non linked, participating, individual life savings Plan which provides long term guaranteed returns.

It provides 3 variants. One can choose short term income plan, long term income plan and whole life income plan (Till 85 years or 100 years).

One can get guaranteed income benefit for 10 year, 20 years, 30 years or lifelong depending on the variant chosen.

This plan provides flexibility to receive paid up additions in cash or accumulate and pay on maturity.

This insurance cum savings plan offers riders, however come with additional premiums.

Minimum premium is Rs 50,000 and maximum no limit.

Minimum sum assured is Rs 2 Lacs and maximum no limit.

Eligibility Criteria in Aditya Birla Sun Life Insurance Vision LifeIncome Plus

Eligibility of taking Aditya Birla Sun Life Vision LifeIncome Plus

 What are the premium payment terms in this plan?

Premium payment term (PPT) is critical in this plan. One need to pay insurance premiums for this period and beyond this, they would get payouts.

Following table provides premium payment term and how benefit payout would happen.

PPT and Benefit Payout periods in Aditya Birla Sun Life Vision LifeIncome Plus

Benefits in Aditya Birla Sun Life Insurance Vision LifeIncome Plus Insurance

This would depend on the 3 variants.

1) Benefits specific to Short Term Income

Death Benefit: In case of unfortunate death of the life insured, the nominee would get sum assured on death.

Policy Continuance Benefit: In case of death, all future premiums would be waived-off and policy would continue to participate in future bonuses etc.

Guaranteed Income: On completion of premium payment term, guaranteed income of 1% of sum assured is payable every month till the end of the policy term. Flexibility to get annual amount too.

Maturity Benefit: On maturity, accrued paid up additions (if any) + terminal bonus (if any) would be paid.

2) Benefits specific to Long Term Income Plan

Death Benefit: In case of unfortunate death of the life insured, the nominee would get sum assured on death. Policy terminates after the death benefit is paid.

Guaranteed Income: On completion of premium payment term, guaranteed income of X% of sum assured is payable every year till the end of the policy term. The X % would depend on the plan tenure taken by the policy holder i.e., 20 years or 25 years or 30 years. It ranges between 5.5% to 8.5%.

Long Term Income Plan payout benefit in Aditya Birla Sun Life Vision LifeIncome Plus

Maturity Benefit: On maturity, accrued paid up additions (if any) + terminal bonus (if any) would be paid.

3) Benefits specific to Whole Life Income Plan

Death Benefit: In case of unfortunate death of the life insured, the nominee would get sum assured on death. Policy terminates after the death benefit is paid.

Guaranteed Income: On completion of premium payment term, guaranteed income of X% of sum assured is payable every year till the end of the policy term. The X % would depend on the plan taken by the policy holder and the age. It ranges between 2.5% to 4%.

Whole life Income Plan payout benefit in Aditya Birla Sun Life Vision LifeIncome Plus

You may like: LIC Jeevan Umang Whole Life Insurance Plan

Maturity Benefit: On maturity, sum assured + accrued paid up additions (if any) + terminal bonus (if any) would be paid.

4) Income Tax Benefits u/s 80c

Insurance premiums paid would qualify for income tax rebate u/s 80c up to Rs 1.5 Lakhs for a financial year.

How Aditya Birla Sun Life Insurance Vision LifeIncome Plus works?

Let me explain this with a couple of examples.

1) Illustration for Short Term Income Plan

Mr. Sharma 35 years age pays premium of Rs 100,000 per year for sum assured of Rs 10.09 Lacs.

Premium payment term is 10 years

Benefit payout period 20 years and payout option monthly

Bonus utilization option – Paid up additions

Total premiums for 10 years would be Rs 10 Lacs

Here are how the insurance premiums are paid and benefits are received.

Short Term Plan Illustration ABSLI Vision LifeIncome Plus

Mr. Sharma would get Rs 10,098 per month as guaranteed income after 10 years premium payment term and till 20 years.

On maturity, Mr. Sharma would get either Rs 3 lacs or 5.6 Lacs as maturity benefit.

2) Illustration for Short Term Income Plan – In case of death

Let me continue above example and show how payouts would happen on death of the policy holder.

Short Term Plan with death benefit Illustration - ABSLI Vision LifeIncome Plus

Short Term Plan with death benefit Illustration – ABSLI Vision LifeIncome Plus

In case of death of Mr. Sharma during 6th policy year

Sum assured on death of Rs 11 Lacs is payable.

All future premiums from 6th year to 10th year would be waived off.

Nominee would get guaranteed income of Rs 10,098 per month from 10th year to 20th year.

At the end of the policy term, paid up additions and terminal bonus would be paid (if any).

Positive Factors in ABSLI Vision LifeIncome Plus

Here are major positive factors:

1) This is life insurance cum savings account. One would have life insurance and at the same time, the savings would keep getting accumulated.

2) This plan comes with 3 variants. Policy holder can take short term income plan, long term income plan or whole life income plan depending on their need.

3) Short term income plan or long-term income options provide guaranteed income for 20 to 30 years. Someone might be earning good now, but later want a second income through some inflow, can opt for such plans.

4) Like any other insurance plan, it provides income tax benefits u/s 80c up to Rs 1.5 Lakhs

Negative / Hidden Factors in ABSLI Vision LifeIncome Plus Plan

Here are some negative factors:

1) Company intends to pay paid up additions and terminal bonus which are not guaranteed.

2) This insurance cum savings policy provides low returns. The return may vary between 5% to 6% per annum. Accurate return computation not possible as there is paid up additions and terminal bonus which are not guaranteed.

3) This plan offers riders which comes with additional premiums.

4) In case of suicide by the policy holder with in 1 year, surrender value only would be paid to the nominee.

Should you opt Aditya Birla Sun Life Insurance Vision LifeIncome Plus Insurance Plan?

This plan comes with a guaranteed income plan and several other key features. However, such insurance-cum-savings plans come with low returns between 5% to 6%. Such low returns cannot beat inflation; hence your hard-earned money value could be lower in the long term. If you are okay with such low returns, you can go ahead and consider such plan. Alternatively, you can invest in equity mutual funds for such long term of 20-30 years and get higher returns.

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Suresh KP

2 comments

  • Joseph

    Sir
    If we have enough investments in Mutual funds,as a part of diversification do you suggest any Guaranteed Income plans?
    If we are satisfied with low return which one do you recommend among the following.
    1.HDFC Sanchay Plus Guaranteed Longterm income(25 years payout plan)
    2.ICICI GIFT Plan
    3.Aditya Birla Longterm

    Thanks and Regards
    Jibin

    • Hello Joseph, All these plans provide 5% to 6% returns. These plans do not beat inflation which is in similar range. If you are okay with such returns, you can consider, else shift to equity or mutual funds.

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