BackProduct crack: Exide Life Wealth Maxima
This is a unit-linked insurance plan (Ulip) that invests your money in the markets and also provides an insurance cover
Premium
This is a unit-linked insurance plan (Ulip) that invests your money in the markets and also provides an insurance cover.
HOW DOES IT WORK?
It is three kinds of Ulips rolled into one. Its basic version, Maxima Invest, is a type-1 Ulip. It pays higher of the fund value or sum assured on death of the policyholder. Cost of insurance is minimum as compared to its other versions. Maxima Family is a type-2 Ulip that pays sum assured and fund value on the policyholder’s death. The third option, Maxima Child, is a child Ulip which is a staggered type-2 plan. On death of the policyholder, sum assured is paid immediately, and the insurer pays subsequent premiums on behalf of the policyholder. On maturity, beneficiary is paid the fund value.
You can buy any option, but switching comes with conditions. You need to stay in one option for at least two years, after which you can switch from Maxima Invest to Maxima Family or Maxima Child, and from Maxima Family to Maxima Child. You can switch to Maxima Family only if you are married, and to Maxima Child only if you have a minor child.
Sum assured is fixed at 10 times the annual premium. But those who are 45 years or older can choose a lower sum assured of seven times the annual premium. However, the insurer has to pay at least 105% of the premiums paid till date on death of the policyholder.
If annual premium is at least 72,000, then at the end of 10th, 15th and 20th policy years, insurer will add a loyalty bonus.
For investments, there are 6 funds to choose from (equity and debt). You can choose from these or go for a systematic transfer plan that starts by keeping your money in a debt fund and every month moves a pre-defined amount to the equity fund. The second strategy is automatic asset rebalancing, which starts with an equity-heavy portfolio and moves to debt as the policy approaches maturity.
WHAT DOES IT COST?
Premium allocation charge (deduction from premium) is 6% of the annual premium in the first year, and reduces to 2.5% from the sixth year. For other modes like monthly payment, premium allocation charge in the initial years is lower. Policy administration charge (deducted from fund value; capped at 500) in the first five years is 0.20% of annual premium per month, and 0.30% from the sixth year. Fund management charge is 1-1.35% of fund value. The mortality charge will depend on factors like your age, sum assured and type of plan. When you switch between Ulips, all charges will remain the same expect mortality. So, if a 35-year-old buys Maxima Invest for an annual premium of 1 lakh with a policy term of 20 years and opts for the equity fund, assuming the fund grows at 8%, net return would be 6.07% (5.70% for Maxima Family, and 5.49% for Maxima Child).
MINT MONEY TAKE
The switch option is good—as goals change, one needn’t buy new policies and pay front-loaded charges again. In terms of costs, there are cheaper Ulips, and the insurance component in this plan is weak. Ulips are long-term products, so have a long-term horizon if you want to buy this plan.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
