The Smart 7 Plan offered by Tata AIA is designed for those individuals who believe that life is about enhancing the value of one’s money. A non-linked endowment assurance scheme which participates in the profits of the company, it is a great option in the current scenario. Combining the benefits of life cover plus returns, the Smart 7 Plan comes with a limited premium payment term and enhanced policy term, ensuring that the investment offers maximum returns, not only in terms of money, but also in terms of life cover.
The Smart 7 plan has a few basic criteria which should be kept in mind before purchasing it. These are mentioned below:
|Parameters||Criteria for eligibility|
|Minimum age at entry||6 years|
|Maximum age at entry||55 years|
|Maximum age at maturity||67 years|
|Plan type||Participating endowment assurance scheme|
Sum Assured – Each policyholder aims to receive a certain minimum through a plan, with this amount being the sum assured. The amount varies based on factors like his/her entry age, future expectations, premium paid, etc. The table below highlights the different aspects related to the sum assured.
|Minimum Sum Assured||Rs.2 lakh|
|Maximum Sum Assured||No upper limit|
Premium* - It is imperative that a policyholder pay a certain amount as premium to be eligible for the sum assured. The Smart 7 plan comes with a limited premium payment term, ensuring that a policyholder saves money compared to a regular premium payment term. The table below highlights the different aspects related to the premium in this policy.
|Term of the policy||12 years|
|Premium Payment Term||7 years|
|Premium Payment Mode||
|Monthly Premium Amount||Based on sum assured and entry age|
|Quarterly Premium Amount||Based on sum assured and entry age|
|Half-yearly Premium Amount||Based on sum assured and entry age|
|Yearly Premium Amount||Based on sum assured and entry age|
*The premium amount changes based on the age of the policyholder, his/her occupation, lifestyle habits, health conditions, etc.
|Maturity Benefit||On survival of the policyholder until the completion of the policy term, he/she will receive a maturity benefit. This consists of the maturity sum assured plus all the bonuses accrued during the policy term. The bonuses include the Terminal Bonus and the Compound Reversionary Bonus.|
|Death Benefit||If the policyholder passes away during the policy period, Tata AIA will pay the nominee a death benefit. This consists of the sum assured plus all the bonuses accrued until the time of death.
The minimum amount a nominee is entitled to receive is 105% of all premiums paid until death.
The maximum sum assured is the highest of:
Riders/Add-on plans – Additional coverage under the Tata AIA Life Insurance Smart 7 Plan
There is no option to enhance the cover provided by this plan by choosing a rider.
Exclusions – What the Tata AIA Life Insurance Smart 7 Plan does not cover
The only exclusion under the Smart 7 plan is suicide. As per the rules, Tata AIA will pay the nominee the sum of all premiums paid if the policyholder commits suicide within one year of buying the policy. Similarly, if the policyholder were to commit suicide within one year of renewing/reviving a policy, the nominee will be paid the higher of the acquired surrender value or the sum of all premiums paid until death. Tata AIA will not consider the mental state of the policyholder, with this applicable even if the policyholder committed suicide in an unstable frame of mind.
Other Key Features
|Free look period||
|Revival||Revival of lapsed policies is possible, provided that the policyholder pays all unpaid premiums (with interest, if applicable). There is a time limit for revival, with it possible only within two years of first missed premium date. A policyholder will be expected to provide proof of health (health certificate) in order for the company to consider the request for revival.|
|Surrender value||The policy acquires a surrender value if premiums for a minimum period of one year are paid. The actual value depends on the total premiums paid and the number of years for which they have been paid.|
|Loan||It is possible to get a loan under this policy.|
The Smart 7 scheme offers tax benefits to policyholders, wherein the money they pay towards the premium is eligible for deductions under Section 80C of the Income Tax Act. The amount Tata AIA pays as maturity/death benefit is also eligible for benefits under Section 10(10D) of the act. It should be noted that the quantum of deductions/savings permitted depends on the tax slab in force, with this amount subject to change.
The Smart 7 plan, as the name implies, is a smart insurance cum investment scheme. The plan provides the benefit of life cover for 12 years despite the fact that premiums need to be paid only for 7 years. This in itself results in sizeable savings. Tata AIA is regarded as one of the best insurers in the country, with it having won the Golden Peacock Award (Risk Management) in 2016. This indicates the safety of an investment made in this plan.
Purchasing this plan provides peace of mind , knowing that your family will be taken care of if something were to happen to you. The bonuses offered by the scheme help offset any rise in costs, ensuring that an investment still holds value at maturity.
Most buyers look forward to a hassle-free experience while purchasing a policy. Tata AIA has kept this in mind, aiming to provide a great customer experience. With regards to this, it had a 100% track record with regards to grievances solved in the year 2015-2016.
Another plus point of this plan is the claim settlement ratio. A low ratio indicates that it is hard to get any money from the insurer. Tata AIA has one of the highest claim settlement ratios in the country, with this being 96.80% for the year 2015-16. These numbers indicate that one needn’t worry about filing for a claim, giving hope that the family will not be required to run around to claim what’s rightfully theirs.