Max Life Smart Term Plan – Is this a really smart insurance plan?
Life is full of uncertainties. One does not know what would happen with us the next moment. It is natural to get worried about the people who are entirely dependent on you for their financial needs. However, taking a life insurance comes with high premiums. Here comes term insurance plan which comes with low premiums. Insurance companies are coming up with unique term insurance plans these days. Max Life has floated Smart Term Plan, which has some unique features. Should you opt for Max Life Smart Term Plan? What are the hidden factors in this plan?
Also Read: Best Term insurance plans in India in 2020
What is Term Insurance plan?
Term Plan is the purest form of insurance plan that provides coverage for a certain period to the Policyholder. The life insured does not get any benefit in case of his survival until the policy term period. But, in case of the insured’s demise during the term period of the policy, the beneficiary is paid a pre-determined sum of money.
What is the claim settlement ratio of Max Life?
One of the criteria in selection of life insurance plan is checking for high claim settlement ratio. Claim Settlement Ratio means the number of claims passed by the insurance company in a specific period of time. Before selecting any term plan, it is vital to study the claim settlement ratio of the insurance company. As per IRDAI annual report, the claim settlement ratio of Max Life Insurance Company is 99.22% in 2020. Max Life tops the ranking of the average claim settlement ratio of the last three years. This emphasizes its easy claim settlement policy.
What is Max Life Smart Term Plan?
Max Life Insurance Co. Ltd. is a joint venture between Max Financial Services Ltd. and Mitsui Sumitomo Insurance Co. Ltd. The company has built his reputation by serving through need-based sales over more than two decades.
Max Life Smart Term Plan is a non-linked and non-participating pure risk premium life insurance plan. It is a comprehensive protection solution that can be personalized for you and your loved ones at an affordable price. This plan is based on the concept – why to pay for benefits that don’t suit your requirement.
Features of Max Life Smart Term Plan
The following are the key features of Max Life Smart Term Plan in the form of info-graphic as well as in regular form.
1) The Smart Term Plan of Max Insurance provides you longer coverage duration. One can choose the desired policy with coverage available up to the age of 85 years.
2) This plan offers you the right choice in payment premium terms like single premium, Premium payment for a limited period like five years, 10 years 12 years, 15 years or till you turn 60 and regular premiums (throughout the policy term).
3) The plan helps you to customize the protection required by offering 7 Death Benefit Variants to choose from at the time of purchase. So, if you want sum assured to be increased or decreased, as lump-sum payment or as monthly income, this plan offers you the flexible choice for death benefit variant.
4) There is no limit to the maximum sum assured subject to limits determined as per the Board-Approved underwriting policy of the company.
5) One can get back all the premium paid with the Premium Back option available under the plan.
6) By adding Max Life Waiver of Premium Plus Rider, one can ensure added protection against death, disease, and disability, accidental death by adding Accident Cover option.
7) There is no loan facility available in this plan.
8) There are provisions of discounts in the plan if a higher sum assured is chosen.
9) There are lower premium rates for female lives. Similarly, low premium rates for non-smokers.
10) There will be no restriction imposed on travel or future occupation.
11) A loyalty discount of 5% is offered in the premium of 1st year for the existing customers of Max Life.
Who is eligible to take this Smart Term Plan?
The minimum age to enter the policy is 18 years.
The maximum age to enter the policy (A) For regular pay is 60 years and (B) For pay till 60 variant is 44 years.
The basic policy term starts from 10 years to 50 years.
The maximum maturity age is 85 years, except for Accelerated Critical Illness (75 years).
Benefits of Max Life Smart Term Plan
The following benefits are offered by the Max Life Smart Term Plan-
1) Death Variants – There are seven different death benefits available in the plan.
2) Premium Back Variant – The option of premium back variant is available in this plan where the life insured survives through the policy term, 100% of the total annualized premium is paid.
3) Life Stage Add on Sum Assured Option – You can enhance your cover with your changing needs, by opting for Life Stage Add-on Sum Assured. This helps you to increase your life cover to ensure that you are aptly protected at all important milestones of your life like marriage, childbirth, or house loan.
4) Accelerated Critical Illness Benefit – In case the life assured is diagnosed with any of the 40 specified critical illnesses, he can get accelerated payout of his Accelerated Critical Illness Sum assured. One also has the option to choose increasing Accelerated Critical Illness benefit option which will ensure Accelerated Critical Sum Assured increases with the increasing age.
5) Accident Cover – If the Life Insured dies due to the accident, 100% of Accident Cover Sum Assured will be payable to the beneficiary as a lump sum. It is irrespective of the Death Benefit Variant chosen by the policyholder. It is payable in addition to the Death Benefit Sum Assured.
Also read: LIC Systematic Investment Insurance Plan (ULIP) – How good is this plan?
What are death benefit options available in Max Life Smart Term Plan?
There are seven different death benefit options in this plan. You can choose any plan that caters your needs to the best.
Death Benefit – The Sum Assured amount chosen by the policyholder at the time of policy inception will be paid to the beneficiary immediately on the death of the life insured as a lump sum.
Income protector – The death benefit is payable as a fixed monthly income for a payout duration of 10/15/20 years as chosen by the policyholder at the time of policy inception to be paid by the beneficiary’s post the date of the death of the Life Insured.
Income plus Inflation Protector – The death benefit is payable as increasing monthly income for a payout duration of 10/15/20 years as chosen by the policyholder at the time of policy inception to be paid by the beneficiary’s post the date of the death of the Life Insured. The 1st monthly income shall be equal to the amount chosen by you and thereafter it will increase every year by 10% per annum (simple interest) of the 1st monthly income payable.
Life Cover plus Income – The lump-sum Life Cover amount chosen by the policyholder at policy inception will be paid to the beneficiary immediately after the death of the life insured. In addition to it, a Level monthly income of 0.4% of the lump sum life cover amount will be paid for 10 years. The total of 120 regular monthly incomes will be equal to 48% of the policy sum assured.
Life cover plus increasing income – The lump-sum Life Cover amount chosen by the policyholder at policy inception will be paid to the beneficiary immediately after the death of the life insured. In addition to it, increasing monthly income will be paid for 10 years wherein the first-year monthly income shall be equal to 0.4% of the lump sum Life Cover amount. The income will increase every year by 10% per annum (simple interest) of monthly income payable in the first year.
Increasing cover – Under this variant, the Sum Assured payable increases by 5% per annum (simple interest) of the lump sum Life Cover amount chosen by the policyholder at policy inception on every policy anniversary. Please note that here the Sum Assured will increase only till completion of the 21st policy year. The Sum Assured effective as on the last policy anniversary will be paid to the beneficiary as a lump-sum immediately on the death of the life insured.
Reducing Cover – Under this variant, the Sum Assured payable decreases by 5% per annum (simple interest) of the lump sum life cover amount on completion of every 5th policy year. The Sum Assured effective as on the last policy anniversary will be paid to the beneficiary as a lump sum immediately on the death of the life insured.
Are there any riders in Max Life Smart Term Plan?
Max Life Smart Term Plan can be made smarter and comprehensive by adding the below rider.
Max Life Waiver of Premium Plus Rider – This rider provides a waiver of all future premiums and all other attaching riders on the earlier happening of either of the following events:
- Critical Illness
- Death (only when Life Insured and Policyholder are different individuals, rider benefit will be paid on the death of the Policyholder)
- The waiver of premium will happen for base benefit premium as well as for additional optional benefits selected.
What are the payment options in Max Life Smart Term Plan?
The premium payment term has to be chosen at the time of inception of the policy and it cannot be changed subsequently. One can pick any premium payment term variance from the following:
1) Single Pay Variant – Available for policy terms ranging from 10 years to 50 years
2) Regular Pay Variant – the policy term is equal to Premium Payment Term and available for all policy terms ranging from 10 years to 50 years.
3) Limited Pay Variants – 5 Pay / 10 pay / 12 pay / 15 Pay
- 5 pay available for all policy terms ranging from 10 years to 50 years
- 10 pay available for policy terms ranging from 15 years to 50 years
- 12 pay available for policy terms ranging from 17 years to 50 years
- 15 pay available for policy terms ranging from 20 years to 50 years
4) Pay till 60 Variant – The premium payment term will be equal to 60 less Entry Age, subject to a minimum premium payment term of 16 years and entry age being less than or equal to 44 years.
Max Life Smart Term Plan sample premium rates
Here are the sample premium rates for a male aged 30 years, non smoker, coverage till 80 years and yearly premium payment and sum assured of Rs 1 Crore.
What are the major exclusions in this Smart Term insurance plan?
It does not cover Cancer of Specified severity (malignant tumor), Angioplasty, Heart Attack – of Specified Severity, Open Heart Replacement or Repair of Heart Valves etc., You can refer insurance brochure for complete info.
Negative factors in this term plan
Here are some negative factors which we could find.
1) Too many options confuse every one. One should just focus on what they need and move-on instead of struggling to pick-up from various options available.
2) More options – higher the premium you need to pay
3) While limited premium payment options are okay for individuals who do not wish to pay for long term, one should avoid single pay premium. One can just deposit such single pay premium in bank FD and with draw and pay the premium every year instead.
4) Some of the exclusions for specific diseases are common these days, hence without them, such plans are unattractive.
Max Life Smart Term Plan – Should you opt?
Max Life Smart Term Plan has unique features. It offers wide rate of options which could be useful on one side, however, on other side it might even confuse for individuals which one to opt them. One can quickly review all these options and pick-up what they really need. Some of the exclusions are also make such plans unattractive. One should go through all the features and exclusions and negative factors. If this suits your need, you can consider Max Life Smart Term insurance plan that has high claim settlement ratio too.
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Max Life Smart Term Plan – Is this a really smart insurance plan
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