Aviva Signature Investment Plan - Platinum
Can the Aviva Signature Investment Plan – platinum strike the right balance between living in the moment and securing your financial future?
Can the Aviva Signature Investment Plan – platinum combine wealth creation with life insurance protection?
Can the Aviva Signature Investment Plan – platinum ensure both long-term growth and peace of mind with a single investment?
In this review, we will explore Aviva Signature Investment Plan – Platinum’s features, benefits, and limitations, along with an estimate of the potential returns it can offer.
What is the Aviva Signature Investment Plan – Platinum?
What are the features of the Aviva Signature Investment Plan – Platinum?
Who is eligible for the Aviva Signature Investment Plan – Platinum?
What are the benefits of the Aviva Signature Investment Plan – Platinum?
What are the fund options in the Aviva Signature Investment Plan – Platinum?
What are the charges under the Aviva Signature Investment Plan – Platinum?
Grace Period, Discontinuance and Revival of Aviva Signature Investment Plan – Platinum
Free Look Period of Aviva Signature Investment Plan – Platinum
Surrendering the Aviva Signature Investment Plan – Platinum
What are the advantages of the Aviva Signature Investment Plan – Platinum?
What are the disadvantages of the Aviva Signature Investment Plan – Platinum?
Research Methodology of Aviva Signature Investment Plan – Platinum
Benefit Illustration – IRR Analysis of Aviva Signature Investment Plan
Aviva Signature Investment Plan – Platinum Vs. Other Investments
Aviva Signature Investment Plan – Platinum Vs. Pure-term + PPF/ELSS
Final verdict on Aviva Signature Investment Plan – Platinum
Aviva Signature Investment Plan – Platinum is a Unit Linked Non-Participating Individual Life Insurance Plan. It provides you with both Security (Sum Assured) and Growth (Fund Value) to support your family in your absence in case of an unfortunate event.
In case of death of Life Insured, the following amounts shall be paid as death benefit:
Death Benefit shall be at least 105% of the Total Premiums (Regular Premium and Top-Up Premium, if any) received up to the date of death
In case the life insured survives till the maturity date, the following amounts shall be payable on the maturity date as maturity benefit:
You can invest 100% of your premiums in any of the funds or choose a combination of funds as per your desire.
You can select from 8 funds tailored to different risk profiles, determined by their asset allocation. Ensure the fund you choose aligns with your personal risk tolerance.
| Asset Allocation | |||||
| S. no | Fund Name | Equity | Debt | Money Market and Other Cash Instruments | Risk Profile |
| 1 | Balance Fund II | 0-45% | 25-100% | 0-40% | Medium |
| 2 | Bond Fund II | NIL | 60-100% | 0-40% | Low |
| 3 | Enhancer Fund II | 60-100% | 0-40% | 0-40% | High |
| 4 | Growth Fund II | 30-85% | 0-50% | 0-40% | High |
| 5 | Infrastructure Fund | 60-100% | 0-40% | 0-40% | High |
| 6 | Protector Fund II | 0-20% | 25-100% | 0-40% | Low |
| 7 | PSU Fund | 60-100% | 0-40% | 0-40% | High |
| 8 | Midcap Fund | 60-100% | 0-40% | 0-40% | High |
| Govt Securities | Money Market and Other Cash Instruments | ||||
| Discontinued Policy fund | 60-100% | 0-40% | |||
Systematic Transfer Plan (STP):
This facility is available if at least 10% of premiums are allocated to Protector Fund-II. This feature will enable automatic switching from Protector Fund-II to Enhancer Fund-II on a weekly or monthly basis, as chosen, during the policy term, except in the last 2 years.
During the last 2 years (i.e., the last 24 months before maturity), the funds will be switched from the Enhancer Fund-II to the Protector Fund-II.
All switches under STP will be free of cost and do not carry any restriction on the minimum switch amount and minimum balance after the switch.
Retire Safe:
Under the Retire Safe strategy, the units in all the funds shall be systematically transferred to the BOND-II Fund from all other existing funds, if any.
The transfer of the units shall be done in 12 quarterly tranches during the last 12 quarters before the maturity date. No switching shall be allowed from the BOND-II fund to any other fund in the last 12 quarters of the Policy Tenure
NIL
Policy Administration Charge (PAC) will be made by monthly redemption of Units from the policy unit account and is applicable throughout the Aviva Signature Investment Plan – Platinum policy term.
| Policy year | Policy Administration Charge |
| 1 to 5 | 0.15% of Annualized Premium subject to max. of Rs. 500 per month |
| 6 onwards | 0.35% of Annualized Premium subject to max. of Rs. 500 per month |
FMC for all Funds other than the Discontinued Policy Fund would be 1.35% per annum. FMC for Discontinued Policy Fund would be 0.50% per annum
It will be applied on the Sum at risk, which is the difference between the amount of death Benefit Payable minus the Fund Value as a deduction of this charge.
| Age | 25 years | 35 years | 45 years | 55 years | 65 years | 75 years |
| Male | 0.9077 | 1.172 | 2.5145 | 7.3252 | 15.3337 | 37.2655 |
| Female | 0.9126 | 1.0589 | 2.0904 | 6.0197 | 13.4209 | 30.8471 |
This charge will be deducted from the policy unit account in case the policy is discontinued within the first 5 years. It is based on the annualised premium, fund value and the year of discontinuance.
The first four-unit switches within a Policy Year will be free of charge. On subsequent switches, a fee of ₹250 per switch transaction will be charged.
NIL
Implication of charges: Unlike other market-linked investment options, certain charges persist throughout the policy term. These ongoing expenses add to the investor’s costs and can gradually diminish overall returns over time.
The grace period for payment of the premium shall be 15 days when the Aviva Signature Investment Plan – Platinum policyholder pays the premium monthly and 30 days in all other cases
Lock-in-period means the period of five consecutive completed years from the date of commencement of the policy.
Policy Discontinuance within the Lock-in-period: the Fund Value will be credited to the Discontinued Policy fund after deducting the applicable discontinuance charges and the risk cover and rider cover, if any, shall cease.
The proceeds of the Discontinued Policy Fund shall be paid to you and the Aviva Signature Investment Plan – Platinum policy shall terminate at the end of the Lock-in-period.
Policy Discontinuance after the Lock-in-period: Your Aviva Signature Investment Plan – Platinum policy shall be converted into a reduced Paid-up Policy with the Paid-Up Sum Assured.
Paid-Up Sum Assured = Sum Assured x (Number of Limited or Regular Premiums Received / Total Number of Limited or Regular Premiums Payable under the Policy)
You have the option to revive the Aviva Signature Investment Plan – Platinum policy within the Revival Period of three years.
If the policyholder disagrees with any of the terms or conditions, he/she has the option to return the policy within 15 days (30 days if the policy is solicited through distance marketing) from the date of receipt of the policy document.
Lock-in-period means the period of five consecutive completed years from the date of commencement of the policy.
Within the lock-in period: the Funds shall remain invested in the Discontinued Policy Fund. The proceeds of the Discontinued Policy Fund shall be paid to you at the end of the Revival Period or Lock-in-period, whichever is later.
After the lock-in period: If You surrender the Aviva Signature Investment Plan – Platinum policy, Fund Value will be paid to you.
This section analyses the investment component of the Aviva Signature Investment Plan – Platinum. By estimating potential returns, we aim to assess the plan’s performance and compare it with alternative investment options.
The following Internal Rate of Return (IRR) analysis is based on the figures outlined in the Aviva Signature Investment Plan – Platinum policy brochure.
Consider a 38-year-old male who opts for the Aviva Signature Investment Plan – Platinum with a sum assured of ₹15 lakhs. Both the policy term and premium payment term are 20 years, requiring an annual premium of ₹1.5 lakhs.
| Male | 38 years |
| Sum Assured | ₹ 15,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 1,50,000 |
The fund value at the end of the policy term assumes consistent premium payments. The policy brochure projects potential returns based on assumed investment rates of 4% and 8%.
These rates are neither guaranteed nor indicative of the actual upper or lower limits of returns, as the maturity benefit depends on various factors, including the policy’s future performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 38 | 1 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 39 | 2 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 40 | 3 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 41 | 4 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 42 | 5 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 43 | 6 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 44 | 7 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 45 | 8 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 46 | 9 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 47 | 10 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 48 | 11 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 49 | 12 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 50 | 13 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 51 | 14 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 52 | 15 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 53 | 16 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 54 | 17 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 55 | 18 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 56 | 19 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 57 | 20 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 58 | 35,00,000 | 56,00,000 | |||
| IRR | 1.45% | 5.63% | |||
At a 4% return, the fund value is ₹35 lakhs, translating to an IRR of 1.45%, which is lower than the interest offered by a basic savings account as per the Aviva Signature Investment Plan – Platinum maturity calculator.
At an 8% return, the fund value grows to ₹56 lakhs, yielding an IRR of 5.63%, which is still below the interest rates provided by bank fixed deposits as per the Aviva Signature Investment Plan – Platinum maturity calculator.
Although the Aviva Signature Investment Plan – Platinum is positioned as a long-term investment, its low returns significantly limit wealth creation.
Consequently, the accumulated corpus may fall short of meeting financial goals, and the sum assured is also inadequate.
The Aviva Signature Investment Plan – Platinum falls short in its suitability due to its inability to offer inflation-beating returns and an inadequate sum assured. The blending of insurance and investment in a single product leads to suboptimal returns.
To illustrate this, let us explore an alternative strategy that separates insurance from investment.
Consider purchasing a pure-term life insurance policy with a sum assured of ₹15 lakhs at an annual premium of ₹9,700.
With a policy term and premium payment duration of 20 years, this leaves ₹1,40,300 annually available for investment. This amount can be allocated based on your risk appetite.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 15,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 9,700 |
| Investment | ₹ 1,40,300 |
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 38 | 1 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 39 | 2 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 40 | 3 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 41 | 4 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 42 | 5 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 43 | 6 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 44 | 7 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 45 | 8 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 46 | 9 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 47 | 10 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 48 | 11 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 49 | 12 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 50 | 13 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 51 | 14 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 52 | 15 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 53 | 16 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 54 | 17 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 55 | 18 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 56 | 19 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 57 | 20 | -1,50,000 | 15,00,000 | -1,50,000 | 15,00,000 |
| 58 | 62,27,719 | 1,02,73,154 | |||
| IRR | 6.53% | 10.68% | |||
Low-risk approach: Investing in a debt instrument like the Public Provident Fund (PPF) results in a maturity value of ₹62.27 lakhs with an IRR of 6.53%.
Notably, this is comparable to the returns in the 8% scenario of the Aviva Signature Investment Plan – Platinum, despite PPF being a safer debt instrument.
High-risk approach: Allocating the funds to an equity-oriented instrument like an Equity-Linked Savings Scheme (ELSS) yields a pre-tax maturity value of ₹1.13 crores.
After accounting for capital gains tax, the post-tax maturity value is ₹1.02 crores, with an IRR of 10.68%. ELSS, being market-linked, delivers significantly higher risk-adjusted returns along with the added benefit of liquidity and unrestricted withdrawals.
| ELSS Tax Calculation | |
| Maturity value after 20 years | 1,13,22,033 |
| Purchase price | 28,06,000 |
| Long-Term Capital Gains | 85,16,033 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 83,91,033 |
| Tax paid on LTCG | 10,48,879 |
| Maturity value after tax | 1,02,73,154 |
When compared, the Aviva Signature Investment Plan – Platinum lacks both the flexibility and the ability to deliver superior risk-adjusted returns, making it less effective than the alternative strategy of separating insurance and investment.
The Aviva Signature Investment Plan – Platinum is marketed as a dual-purpose solution, offering security through the sum assured and growth via the fund value to support your family. However, a closer evaluation reveals significant shortcomings due to its low potential returns.
The high charges associated with this ULIP (Unit-Linked Insurance Plan) severely impact its performance, resulting in subpar returns and limiting its ability to accumulate wealth and it also has a high agent commission.
Furthermore, the plan’s inadequate sum assured reduces its appeal. Combining insurance and investment in a single product compromises the overall efficiency of the Aviva Signature Investment Plan – Platinum.
A more effective strategy is to secure your family’s future with a pure-term life insurance policy, which provides substantial coverage at an affordable premium.
To achieve your financial goals, consider investing separately in options that align with your risk tolerance and time horizon.
For better returns on market-linked investments, avoiding ULIPs is recommended. Always analyse a product’s potential returns before committing your money.
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