Tata AIA Life launches industry’s first smart income plan


Tata AIA Life Insurance Company Limited (Tata AIA Life), a joint venture established by Tata Sons Pvt. ltd. and AIA Group Ltd. (AIA), have launched a “Smart Value Income Plan”, an untied participatory life insurance savings plan where the bonus can be adjusted according to premium payments. This plan includes industry-first features such as the ability to accumulate cash bonuses that will earn rewards in the form of loyalty bonuses in the sub-wallet and favorable interest rates on loans for MSMEs and women entrepreneurs, as well as an additional 1% concession on loan facilities for women entrepreneurs. Individuals between the ages of 1 and 65 can purchase the Smart Value Income Plan, with a maximum maturity age of 100. The policyholder may also receive tax benefits under sections 80 C and 10 (10 D) of the Income Tax Act 1961.

Features and Benefits of Tata AIA Life Insurance Smart Value Income Plan

As per the official statement, Tata AIA Life Insurance Smart Value Income Plan has the following unique and never-before-seen features.

Cash bonus from the 1st month: Consumers can choose to receive cash premiums from the first month of policy purchase and continue to accrue premiums, even if they are unable to pay the premiums in the event of lost wages/income.

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Premium shift function: A policyholder who has chosen the regular premium payment option will be able to adjust the premium payable against cash premiums, provided the frequency and timing of premium payments matches the premium payment.

Integrated sub-portfolio: This allows consumers to accumulate bonus cash and facilitates the withdrawal of the bonus amount, as needed. The amount in the sub-wallet further generates returns in the form of daily loyalty additions, which can also be used to offset future bonus payments.

LifeProtect function: The Tata AIA Smart Value Income Plan also comes with a Life Protect feature that allows consumers to continue with their life insurance covers even if they have to defer premium payments due to loss of income or when are facing a financial crisis. Under this feature, Tata AIA will continue to offer the sum insured chosen by the consumer, if the policy becomes released due to non-payment of premiums. Cash bonuses* will also continue to accumulate in this case.

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Special advantage for SME owners and women entrepreneurs: A first of its kind for small and medium-sized businesses, the Tata AIA Life Smart Value Income Plan offers an added advantage of preferential rates on loans over policy. For women entrepreneurs, the policy offers another special discount of 1% on policy loan interest rates.

There is also a considerable maturity advantage in the plan. Let’s take the example of a 35 year old non-smoker who chooses a term of 10 years with premium and an insurance term of 40 years. Apart from the life cover of INR 12,000,000 for the duration of the policy, the consumer would benefit 10,50,000 as sum assured at maturity, 37,000 as the last cash bonus (not guaranteed), and 12,64,000 in terminal premium (unsecured), for a total profit of 23,51,000 under the 8% cash bonus option. The sum insured at maturity will be 10,50,000, the last cash bonus would be 21,000, and the terminal premium benefit will be 4,60,000 a total profit of 15,31,000 if you choose the 4% cash bonus option.

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Commenting on the launch of the Smart Value Income Plan, Venky Iyer, President and Head of Distribution at Tata AIA, said: “As we emerge from the pandemic, the economic landscape continues to remain uncertain amid geopolitical issues, rising inflation, income uncertainty, etc. Under these conditions, consumers prefer a balance between quality of life and the achievement of key financial goals. Our unique proposition, “Tata AIA Smart Value Income Plan”, will provide consumers and their families with best-in-class features. It helps them generate wealth and benefit from life insurance coverage even in situations where there are premium payment discrepancies, thanks to the unique “premium offset” feature. Such benefits make this product stand out in the market and should be a preferred choice for all consumers.”

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