Max Life Platinum Wealth Plan Review: Is It Worth Investing?

To achieve our financial dreams, 

We work harder & try to save most of our earnings. 

But will that be enough?

Don’t we need to invest to maximize our earnings through inflation-beating returns?

Max Life Platinum Wealth Plan assures you that it will maximize your hard-earned money through market-linked returns and protect your family’s financial future, even when you are no longer around. 

Will this plan be a valuable addition to your Investment Portfolio?

Will it really help you to realize your financial dreams? 

Let us find out by conducting an in-depth analysis to help you find out the answer to this question.

Table of Contents:

1.)What is Max Life Platinum Wealth Plan?
2.)Features of Max Life Platinum Wealth Plan
3.) Eligibility Criteria of Max Life Platinum Wealth Plan
4.)Max Life Platinum Wealth Plan at a glance
5.) 6 Fund Options in the Max Life Platinum Wealth Plan
6.)Benefits of the Max Life Platinum Wealth Plan

• Maturity Benefit
• Death Benefit

7.) Guaranteed Loyalty Additions and Guaranteed Wealth Boosters in the Max Life Platinum Wealth Plan
8.) Other Benefits of the Max Life Platinum Wealth Plan
9.)Various Charges under the Max Life Platinum Wealth Plan
10.) A grace period, Discontinuance & paid-up, Revival of the Max Life Platinum Wealth Plan
11.) Free look period of the Max Life Platinum Wealth Plan
12.) Surrendering the Max Life Platinum Wealth Plan
13.) Advantages of the Max Life Platinum Wealth Plan
14.) Disadvantages of the Max Life Flexi Wealth Plan
15.) Research Methodology
16.) Max Life Platinum Wealth Plan – IRR Analysis
17.)Max Life Platinum Wealth Plan Vs. Other Investment Alternatives
18.) Max Life Platinum Wealth Plan Vs. Term Insurance + PPF / ELSS
19.)Final Verdict of the Max Life Platinum Wealth Plan

What is Max Life Platinum Wealth Plan?

It is a Unit Linked, non-participating, Individual, Life Insurance plan. 

Max Life Platinum Wealth Plan secures your family’s financial future with comprehensive maturity and death benefits. 

At the same time, you can also enjoy Guaranteed Loyalty Additions and Wealth Boosters as additional benefits. 

Features of the Max Life Platinum Wealth Plan

• You can choose your Premium Payment Term and Policy Term at your convenience.
• It provides comprehensive life Insurance coverage for you.
• You can opt for additional cover by choosing riders.
• Guaranteed Loyalty Additions and Guaranteed Wealth Boosters enhance your Base Policy Fund Value.
• The policyholder has an option to decrease the premium up to 50% of the original Annualised Premium subject to the minimum premium limit, only once post the end of the 5-year lock-in period.
• There are 6 fund options & 2 investment strategies for you to choose from.

Eligibility Criteria of the Max Life Platinum Wealth Plan

Let us look at the basic information we need to know about this policy at a glance below:

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Product Type	A Unit Linked Non-Participating Individual Life Insurance Plan
Coverage	Individual
Min. age at entry	91 days
Max. age at entry	Premium payment term	Max. entry age
	Single pay/limited pay (5 years)	60
	Regular Pay	55
Min. maturity age	18 years
Max. maturity age	Premium payment term	Max. maturity age
	Single pay/limited pay (5 years)	70
	Regular Pay	65
Premium payment term/policy term	Premium payment term	Policy term
	Single pay	10
	Limited pay	10 to 20
	Regular pay	10 to 20
Annualized premium	Min.- Rs.2,00,000 (for all variants) Max.- No limit
Premium payment mode	Single pay – Premium payment is on a one-time basis
	Limited pay (5 years) / Regular pay – Annual, Semi-Annual, Quarterly, or Monthly
Premium Bands	Band 1: Premium of less than ₹ 5 Lakhs
	Band 2: Premium of ₹ 5 Lakhs and above
Sum Assured Multiple	Single Pay: 1.25 times the Single premium
	Limited Pay (5 years) / Regular Pay (10 times Annualised Premium

Max Life Platinum Wealth Plan at a glance:

Two investment Strategies:

Let us look at the two investment strategies in detail below;

The Systematic Transfer Plan:

It allows the policyholder to duplicate the rupee cost-averaging approach on the policyholder’s annualized premium. 

First, units will be acquired in Secure Plus, then on each consecutive monthly anniversary, units available in Secure Plus Fund will be progressively moved to the Growth Super Fund based on the following formula: 

[1 / (13–month number in the policy year)]

Dynamic Fund Allocation (DFA) strategy:

This strategy can help the policyholder to strike the right balance between debt and equity by rebalancing on yearly basis till the end of the policy maturity. 

The funds will be divided between the Growth Super Fund and the Secure Fund in a predetermined proportion that varies according to the number of years before the maturity.

Number of Years to Maturity	Proportion in Growth Super Fund	Proportion in Secure Fund
16 – 20 years	80%	20%
8 – 15 years	70%	30%
4 – 7 years	50%	50%
0 – 3 years	20%	80%

6 Fund Options in the Max Life Platinum Wealth Plan

Let us look at what funds options are available in the Max Life Platinum Wealth Plan by looking at the table given below according to the kind of fund it is and the risk profile it has.

Funds	Equities	Govt Sec	Corporate bond	Money Market	Risk profile
High Growth	70-100	0-30	0-30	0-30	Very High
Growth super	70-100	0-20	0-20	0-30	High
Growth	20-70	0-30	0-30	0-40	High
Balanced	10 – 40	20-50	20-40	0-40	Medium
Conservative	0-15	50-80	0-50	0-40	Low
Secure	0	50-100	0-50	0-40	Low

Benefits of the Max Life Platinum Wealth Plan

Maturity Benefit:

On maturity, you will be eligible to receive the Fund value, provided the settlement option has not been exercised.

Death Benefit:

In case of Death of the Life Insured anytime during the term of the policy, the following death benefit is payable;

The Death Benefit is defined as the higher of the following:

For Single Pay Variant:

Sum Assured will be equal to a higher of

• 1.25 times the Single premium (reduced by applicable partial withdrawals, if any), or
• 105% of cumulative premiums paid till the date of death, or
• Total Fund Value (as of the date of death)

For Limited Pay / Regular Pay Variant:

Sum Assured will be equal to a higher of 

• 10 times the annualized premium or 0.5 times the product of Policy, or
• Term and annualized premium (reduced by applicable partial withdrawals, if any), or
• 105% of cumulative premiums paid till the date of death, or
• Total Fund Value (as of the date of death).

Guaranteed Loyalty Additions and Guaranteed Wealth Boosters in the Max Life Platinum Wealth Plan:

Guaranteed Loyalty Additions:The Company will pay an additional percentage of Fund Value to the fund by the creation of additional units, at the end of the policy year.

Guaranteed Wealth Boosters:It is an additional percentage of Fund Value to be added to the fund by the creation of additional units, at the end of every 5 years starting from the 10th policy year. The additional percentage will be determined by the premium paid by the Policyholder.

Other Benefits of the Max Life Platinum Wealth Plan

Switch

You may Switch between available Funds at any time during the Policy Term, subject to a minimum Switch amount of Rs.5,000. There is no limit on the number of switches done in a policy year.

Premium Redirection

You may redirect your future premiums between available Funds at any time. A maximum of six Premium Redirections are allowed for free in a policy year.

Partial Withdrawal

No partial withdrawals are allowed in the first five policy years and thereafter a maximum of two partial withdrawals with a minimum amount of Rs.5000 are allowed in any policy year.

Settlement Option:

“If settlement option is chosen, the policy will continue after the maturity date for a period not exceeding 5 years from the maturity date”.

The first instalment will be paid out on the Date of Maturity. During the settlement period, you will not be entitled to effect partial withdrawal or smart withdrawal but Switches will be allowed.

All inherent investment risks shall continue to be borne by the investor. Only Fund Management Charges, switching charges (if any), and mortality charges on death benefits will be deducted during this period.

Premium Reduction:

Available after completion of the first five policy years. Option to decrease the premium up to 50% of your original Annualized Premium, subject to the minimum premium limit. 

This option can opt only once during the term of the contract, and the premium once reduced, cannot be subsequently increased. The sum assured of the base plan will be reduced in the same proportion as the reduction in premium.

Additional rider benefit:

• Max Life Partner Care Rider

Various Charges under the Max Life Platinum Wealth Plan

Let us look at some of the charges available in this plan below:

1. Premium Allocation Charge:

The premium allocation charge is levied as a % of each premium paid. The rate of premium allocation charge depends on the premium paying term & policy term, it ranges between 3% & 6%. There is no premium allocation charge from the 11th policy year onwards.

2. Fund Management Charge:

The annual rates of the Fund Management Charge are mentioned below: 

Fund Management Charge (% of Fund Value)
Fund Name	Fund Management Charge (p.a.)
High Growth Fund	1.25%
Growth Super Fund	1.25%
Growth Fund	1.25%
Balanced Fund	1.10%
Conservative Fund	0.90%
Secure Fund	0.90%
Secure Plus Fund	0.90%
Discontinuance Policy Fund	0.50%

3. Policy Administration Charge

This is a fixed charge of Rs.330 per month (Single pay) or Rs.400 per month (Limited Regular pay). This charge is applicable for 5 years & from the 6^th policy year there is no administration charge.

4. Mortality Charge

This charge is unisex and is levied on the attained age of the Life Insured on the Sum at Risk and these charges are guaranteed for the entire Policy Term. 

Age (in years)	Mortality charge(per₹ 1,000 Sum at Risk)
0 (91 days)	3.56
10	0.35
18	0.64
25	0.79
30	0.84
35	1.03
40	1.44
45	2.30
50	3.96

5. Surrender / Discontinuance Charge

 This charge shall be levied on the Fund Value at the time of Discontinuance of the policy or effecting Complete Withdrawal (Surrender) whichever is earlier. There is no surrender / Discontinuance charge from the 5^th policy year onwards.

6. Switch Charge

 There are no charges for switching.

7. Premium Redirection Charge 

A maximum of six Premium Redirections are allowed in each policy year and they are free of any charge.

8. Partial Withdrawal Charge

After the first five policy years, a maximum of two Partial Withdrawals are allowed in a policy year and they are free of any charge. 

9. Rider Charge 

In case you have opted for the Max Life Partner Care rider, a rider charge will be levied on the rider sum at risk every month.

10. Miscellaneous Charges 

There are no miscellaneous charges for this policy.

Inference from these charges: Some of the charges are essential to run the plan like mortality charges, and fund management charges. But some charges like premium allocation charges, and policy administration charges may pull down your overall fund value. There are no discontinuance/ surrender charges for other investment products.

A grace period, Discontinuance & paid-up, Revival of the Max Life Platinum Wealth Plan 

Grace period:

A Grace Period of 30 days from the due date of the first unpaid premium will be allowed. It will be reduced to 15 days if the policyholder uses the monthly mode.

Discontinuance & Paid-up:

Discontinuance of payment of premium during the first five policy years (Lock-in Period) – Upon the expiry of the grace period, the Fund Value, by the creation of units will be credited into the Discontinued Policy Fund after deducting applicable Discontinuance Charges. The risk cover under the policy will stop and no further charges will be levied other than the Fund Management Charge.

Discontinuance of payment of premium post the first five policy years (i.e., after the expiry of the Lock in Period) – the policy shall be converted into a reduced paid-up policy with the paid-up sum assured i.e., current sum assured multiplied by the total number of the premiums paid to the original number of premiums payable as per the terms and conditions of the policy.

Revival:

You will have the Revival Period of three years from the Date of Discontinuance to revive your policy.

Free look period of the Max Life Platinum Wealth Plan

If you disagree with the terms and conditions of the policy, you can return the policy within a period of 15 days from the date of receipt of the policy.

The free look period will be extended up to 30 days if the policyholder bought the plan online or through distance mode.

Surrendering the Max Life Platinum Wealth Plan

You have the right to surrender the policy at any time during the Policy Term. The surrender benefit is equal to the Fund Value less applicable to surrender / discontinuance charges.

Surrendering the Max Life Platinum Wealth Plan within five years of the Effective Date of the policy (i.e., within the Lock-in Period) – the Fund Value will be credited to the Discontinuance Policy Fund after deducting applicable Surrender / Discontinuance Charges. At the expiry of five years from the effective date of the policy (i.e., at the expiry of the Lock-in Period), you will receive the value of units in the Discontinuance Policy Fund.

Surrender after five years of the Effective Date of the policy (i.e., after the completion of the Lock-in Period) – Surrender Value which is equal to the Fund Value of the Units in the Segregated Fund(s) is receivable.

Advantages of the Max Life Platinum Wealth Plan

• You have a choice of choosing from 2 investment strategies & 6 funds.
• Guaranteed loyalty additions & guaranteed wealth boosters will increase your base fund value.
• Unlimited free switches, 6 premium redirections & 2 partial withdrawals (after the lock-in period) are allowed in a policy year.
• Settlement option can be exercised during maturity.

Disadvantages of the Max Life Flexi Wealth Plan

• No liquidity in the first 5 years of the policy.
• Loyalty addition starts from the 6^th year (Band 1), and 11^th year (Band 2) & Wealth booster starts from the 10^th year only.
• After deducting all the charges, only the net premium will be invested.
• The loan option is not available.
• During the settlement period, the investor should bear the investment risk.

For more details, you can read the Max Life Platinum Wealth Policy Brochure.

Research Methodology

So far, we have discussed the features & the various plan options available in the Max Life Platinum Wealth Plan. 

Next, we are proceeding with an in-depth analysis to figure out the potential return of this policy. 

Since the Max Life Platinum Wealth Policy has a lot of charges, let us understand the plan with the help of a Benefit Illustration taken from the Max Life Website.  

Max Life Platinum Wealth Plan – IRR Analysis

The Assumptions for Comparisons:

Age of Life Insured	35
Premium Payment Term	20 Years
Policy Term	20 Years
Annualized Premium	₹ 2,00,000
Sum Assured	₹ 20,00,000

If a 35-year-old male buys the Max Life Platinum Wealth Policy for a sum assured of Rs. 20 lakhs with an annual premium of 2 lakhs. Both the premium paying term & policy term is for 20 years. 

The assumed rates of return are @ 4% p.a. at the worst-case scenario and 8% p.a. at the best-case scenario for the Balanced Fund. 

These are not guaranteed upper or lower limits of returns of the Funds selected in your policy, as the performance of the Funds is dependent on several factors including future investment performance.

		At 4% p.a.		At 8% p.a.
Age	Year	Annualized premium / Maturity benefit	Death benefit	Annualized premium / Maturity benefit	Death benefit
35	1	-2,00,000	20,00,000	-2,00,000	20,00,000
36	2	-2,00,000	20,00,000	-2,00,000	20,00,000
37	3	-2,00,000	20,00,000	-2,00,000	20,00,000
38	4	-2,00,000	20,00,000	-2,00,000	20,00,000
39	5	-2,00,000	20,00,000	-2,00,000	20,00,000
40	6	-2,00,000	20,00,000	-2,00,000	20,00,000
41	7	-2,00,000	20,00,000	-2,00,000	20,00,000
42	8	-2,00,000	20,00,000	-2,00,000	20,00,000
43	9	-2,00,000	20,00,000	-2,00,000	20,00,000
44	10	-2,00,000	20,00,000	-2,00,000	20,00,000
45	11	-2,00,000	20,00,000	-2,00,000	20,00,000
46	12	-2,00,000	20,00,000	-2,00,000	20,00,000
47	13	-2,00,000	20,00,000	-2,00,000	20,00,000
48	14	-2,00,000	20,00,000	-2,00,000	20,00,000
49	15	-2,00,000	20,00,000	-2,00,000	20,00,000
50	16	-2,00,000	20,00,000	-2,00,000	20,00,000
51	17	-2,00,000	20,00,000	-2,00,000	20,00,000
52	18	-2,00,000	20,00,000	-2,00,000	20,00,000
53	19	-2,00,000	20,00,000	-2,00,000	20,00,000
54	20	-2,00,000	20,00,000	-2,00,000	20,00,000
55		55,04,191		86,21,557
	IRR	2.95%		6.85%

The IRR under 4% & 8% of the assumed rate of return is 2.95% & 6.85% respectively. 

In the worst-case scenario of 4% p.a., your IRR only gets close to a Savings bank account rate of interest.

In the best-case scenario of 8% p.a.; your IRR works out to a Fixed bank deposit rate of interest. 

After investing for a long-time horizon of 20 years & getting this Internal Rate of Return is not beneficial to your Investment Portfolio. This will not help you to achieve the inflated cost of your financial goals in the long run. 

Any investment scheme you choose to invest in should help you to combat inflation which is not served by the Max Life Platinum wealth plan.

Max Life Platinum Wealth Plan Vs. Other Investment Alternatives

Since the Max Life Platinum Wealth plan has both life cover & investment options, we can assume a Pure Term Life Insurance for life cover & other investment alternatives for Wealth accumulation purposes. 

To fairly determine whether this plan is a good fit or not or if there are actually other better market-related investment instruments available in the market, We need to compare the Max Life Platinum Wealth Plan’s IRR with other Market investment alternatives’ IRR.

In order to achieve our financial goals, we need to invest in a better-yielding product. 

We can assume a similar cash flow as in the above illustration for comparison purposes.

Pure term insurance
Sum Assured	1 crore
Policy Term	20 years
Annual Premium	₹ 15,000
Balance amount for investment	₹ 1,85,000

Max Life Platinum Wealth Plan Vs. Term Insurance + PPF / ELSS

Pure term insurance for a sum assured of Rs. 1 crore would cost just Rs.15,000. 

In the above illustration, the annual cash outflow is Rs. 2 lakhs. After paying a premium for a pure-term insurance policy, you will be left with ₹ 1,85,000. 

This amount can be invested as per your choice depending on your risk appetite.

Risk-averse investors can choose debt instruments & Aggressive investors can go for equity instruments. 

Let us work out the internal rate of return for the Pure term insurance + Investments.

		Term insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death benefit	Term Insurance premium + ELSS	Death benefit
35	1	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
36	2	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
37	3	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
38	4	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
39	5	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
40	6	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
41	7	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
42	8	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
43	9	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
44	10	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
45	11	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
46	12	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
47	13	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
48	14	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
49	15	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
50	16	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
51	17	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
52	18	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
53	19	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
54	20	-2,00,000	1,00,00,000	-2,00,000	1,00,00,000
55		82,34,083		1,38,53,654
	IRR	6.46%		10.77%

For our analysis, we have taken PPF under debt instrument & ELSS under Equity Instrument. The returns under the ELSS Mutual Fund are post-tax returns. 

The IRR for Term Insurance + PPF is 6.46% & IRR for Term Insurance + ELSS is 10.77%. 

These rates are comparatively better than the Max Life Platinum Wealth Plan. Moreover, you get a life cover of Rs. 1 crore which is missing in the Max Life Platinum Wealth Plan. 

Final Verdict of the Max Life Platinum Wealth Plan

Max Life Platinum Wealth Plan provides you with two portfolio strategies and multiple Fund options for investors with different risk appetites. 

Though you get a market-linked return, the plan has in-built charges which make the return insufficient. There is a liquidity issue in the first 5 years. Also, the sum assured is very poor for the life cover you opt to cover for your next 10 to 20 years.

Alternatively, Pure Term Insurance offers high coverage at an affordable premium instead of paying a high premium for insurance cum savings products. Pure-term insurance makes the room for other investments. This strategy will help you to achieve your financial goals without any derailing in your plans.

If you are looking for some guidance on making your investments, you can always consult with your Financial Advisor to customize your financial plan according to your financial goals.