Birla Sun Life Insurance-Income Assured Plan
Birla Sun Life Insurance-Income Assured Plan Review
BSLI Income Assured Plan is a traditional, non-participating insurance plan which is designed for creating savings and also providing insurance. The plan provides a regular stream of income too, thus, taking care of the liquidity requirement of the policyholder during the plan duration.
Key Features
This is a traditional savings plan which does not earn bonuses.
Premiums are payable for a limited duration. After the completion of the Premium paying Term, monthly incomes are paid to the policyholder till the remaining plan duration.
Guaranteed Additions are also added under the plan quarterly after the completion of the Premium Paying Term till maturity.
A grace period of 30 days is allowed for payment of premium after the due date for yearly, half-yearly and quarterly modes of premium payment. For monthly mode, the grace period allowed is reduced to 15 days. The life cover under the policy would continue during the grace period.
A cooling off period or a free look period of 15 days (30 days for distance marketing channels) is granted to the policyholder after the policy issuance to review the policy terms and conditions. If found unsatisfactory, the plan can be cancelled within this period and the premium paid would be refunded after deducting the relevant mortality charge, service tax, cess and stamp duty paid.
Benefits
When the plan matures and the premiums have been duly paid, the following benefits would be paid:
Sum Assured + accrued Guaranteed Additions + increased value of the accrued assured income (if any)
If the insured dies during plan term and the policy is in force, the death benefit payable would be:
Sum Assured on Death + accrued Guaranteed Additions + increased value of the accrued assured income (if any)
The Sum Assured on Death would be higher of the following:
- 10 times the annual premium
- Sum Assured chosen on plan commencement
- 105% of all premiums paid till death
- When the insured survives till the end of the Premium Paying Term, he becomes eligible to receive the Assured Income Benefit payable under the plan. The benefit starts from the next month following the completion of the Premium Paying Term and is paid @8% of the Sum Assured per annum. The policyholder might choose to receive such incomes in either of the following two ways:
- Option A – The income can be received every month till the completion of the plan term
- Option B – The income can be accumulated till the end of the term and then received in lump sum either on death or maturity. This accumulated income would be increased when it is paid in a lump sum. The increased benefit payable would be as follows:
| Plan Tenure | Benefit Payable |
| 15,17 or 20 years | 137.5% of the accrued assured income |
| 22 or 25 years | 175% of the accrued assured income |
- The plan is eligible for Guaranteed Additions which are added after the Premium Paying Term and till maturity. The additions are added every quarter and they depend on the Premium Paying Term. The rate of Guaranteed Additions are as follows:
| Premium Paying Term | Guaranteed Additions |
| 5 years | 7% |
| 7 years | 8.5% |
| 10 years | 10% |
It is a non-participating plan which does not earn bonuses.
Loan can be taken on the policy after the policy has acquired a Surrender Value. The maximum amount of loan available is 85% of the acquired Surrender Value while the minimum amount is Rs.5000.
Premiums paid under the plan would be exempt from tax under Section 80C up to a limit of Rs.1.5 lakhs. The benefits received under the policy would also be tax exempt under Section 10(10D) of the Income Tax Act.
BSLI Waiver of Premium Rider can be opted under the plan for increasing the scope of insurance protection.
Discount in premiums @ 3% is allowed if the premiums are paid in the annual mode.
Higher levels of Sum Assured also attract a premium discount. A discount of Rs.8 per Rs.1000 Sum Assured is allowed for choosing the Sum Assured Band 2 and a discount of Rs.12.50 per Rs.1000 Sum Assured is allowed for choosing Sum Assured Band 3.
How it works
- The policyholder chooses the Sum Assured, plan term, and the premium paying frequency. Based on the policyholder’s age and the above criteria, the premium would be determined.
- The Sum Assured is divided into three bands which are as follows:
| Sum Assured Bands | Sum Assured range |
| Band 1 | Rs.1 lakh to Rs.199,999 |
| Band 2 | Rs.2 lakhs to Rs.399,999 |
| Band 3 | Rs.4 lakhs and above |
- The Premium Paying Term (PPT) would depend on the plan tenure chosen. However, the PPT should not complete if the insured is aged lower than 18 years. Similarly, the PPT would not extend beyond the insured attaining 65 years of age.
- Regular monthly incomes start after the completion of the PPT and continue till the end of the plan tenure.
- Guaranteed Additions are also added after the Premium Paying Term is completed.
- On death during the period, the death benefit is paid.
- On maturity, the maturity benefit is paid.
How does the plan work?
You can customise your policy to suit your needs by choosing the pay term and the policy term.You can choose from the following:
- 5 years pay term for 15 year policy term
- 7 years pay term for 17 or 22 year policy term
- 10 years pay term for 20 or 25 years policy term
Non-Payment of premium in Birla Sun Life Insurance-Income Assured Plan
Premiums have to be paid for at least 2 years for a Premium Paying Term of 5 or 7 years and 3 years for a Premium Paying Term of 10 years. If future premiums are not paid, the policy can be made paid-up or can be surrendered as chosen by the policyholder.
Making the policy Paid-up
If at least2 or 3 full years’ premium has been paid, the policy would become a paid-up policy if future premiums are not paid. The Sum Assured and the Sum Assured on Death under the plan would be reduced and would be calculated as follows:
Reduced Sum Assured = Sum Assured * (number of premiums paid / total number of premiums payable)
Reduced Sum Assured on Death = Sum Assured * (number of premiums paid / total number of premiums payable)
The plan benefits would also be reduced and would be as follows:
- Assured Income Benefit – The income would be calculated as 8% of the reduced Sum Assured and could be availed either as monthly incomes or in one lump sum. The increment in case of lump sum benefit would be same. However, if the monthly incomes in case of Option A are lower than Rs.500, the assured income would be payable annually.
- Guaranteed Additions – The Guaranteed Additions would also be calculated on the Reduced Sum Assured
- Death Benefit – The death benefit under a paid-up policy would be equal to:
Reduced Sum Assured on Death + accrued Guaranteed Additions + increased value of the accrued assured income (if any) - Maturity Benefit – On plan maturity, the maturity benefit payable would be:
Reduced Sum Assured + accrued Guaranteed Additions + increased value of the accrued assured income (if any)
Surrendering the policy
Surrender is allowed only after the policy becomes paid-up, i.e. after2 or 3 full years’ premiums have been paid. On surrendering the policy, higher of the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV) would be paid.
- GSV = {(Basic Premium paid excluding taxes * GSV Factor)+ (accrued Guaranteed Addition * GSV Factor)} – Assured Income already paid.
- The SSV factors would be declared by the company based on its performance
Revival
Revival is allowed within 2 years from the date of the first unpaid premium. The policyholder would be required to pay the outstanding premium and any interest charged by the insurer to revive his policy.
Eligibility
The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
| Minimum | Maximum | |
| Entry age (Last Birthday) | 8 years | 60 years |
| Maturity Age (Last Birthday) | NA | 75 years |
| Plan tenure | 15,17,20,22 or 25 years | |
| Premium payable | Depends on Sum Assured, term, PPT, age and gender | |
| Premium Paying Term (PPT) | Term 15 years – 5 years Term 17 or 22 years – 7 years Term 20 or 25 years – 10 years |
|
| Sum Assured | Rs.1 lakh | No limit |
| Premium payment mode | Monthly, half-yearly, quarterly and annually | |
Exclusions
- If suicide is committed within a year of policy issuance or revival, higher of the premiums paid till death or the Surrender Value acquired would be paid provided the policy is in force.
