Although many individuals will have some sort of life insurance cover, it sometimes pays to have a whole life cover- whole life stands for 100 years. Insurers are offering whole life cover along with their unit-linked insurance plans. Of late, Tata AIG's latest offering, the InvestAssure Gold, doubles up as ULIP with the different premium paying options. One can pay premium for the full term, which is 100 minus his current age, or opt for a limited premium payment term of five years as against a single premium payment option.
Chief Distribution Officer/ Tata AIG: "An enhanced entry age up to 70 ensures the elderly population is not excluded"
Policy holders can choose from a spread of five fund options: Mid-cap equity fund, aggressive growth fund, stable growth fund, income fund, and short-term fixed income fund. "The fund options include a mid-cap as well as growth and balanced options. While mid-caps could have higher volatility, we believe that they offer attractive wealth creation opportunity over the long term." says Prasun Gajri, Senior Vice President and Chief Investment Officer. Growth and balanced fund options provide the options of asset mix of equity and fixed income classes. Policy holders are allowed to switch between funds for four times free of cost beyond which there's a charge.
Company sources say the maximum return could be 60 times premium payable while the minimum would be as per IRDA stipulation, which would be 5 times or 70 minus age divided by 2, whichever is higher. In any case, as this is really a long-term fund, there are withdrawal options too.
How does Tata AIG's life premium stack up against LIC?
Tata aig's whole life cover plan
LIC'S whole life cover plan
LIC also offers whole life limited premium payment options with (with profit and without profit) options. It offers a single premium payment option, or premium options to be paid over five years to 15 years. Individuals can opt for whole life payment up to the age 80. Premiums are attractive. For example, on a sum assured of Rs 1 lakh, a 35-year-old will have to pay Rs 2,917 with a profit option. For 15 years, premiums work to Rs 4,444 and in the single premium option Rs 45,565. Gains on annual and limited premium could range from Rs 7,48,000 maximum or Rs 3,34,000 on the lower side (as per IRDA guidelines), but can go higher if you take a single premium to Rs 12,22,000 maximum and Rs 3,34,000 on the lower side.