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Some of your Financial Goals might be non-negotiable & requires a solid Plan. So, be calculative of every single penny you earn in your investment Journey.
Max Life Smart Fixed Return Digital Plan is an Insurance Product that combines protection along with giving you lump sum benefits that are assured right at the outset.
There are three variants available in this plan:
- Gold
- Platinum
- Titanium
Will this Max Life Smart Fixed Return Digital Plan benefit you? In this article let us find out how the Titanium variant of this plan works.
Table of Contents:
1.)What is Max Life Smart Fixed Return Digital Plan?
2.)Features of the Max Life Smart Fixed Return Digital Plan
3.)Eligibility Criteria of the Max Life Smart Fixed Return Digital Plan
4.)Benefits under the Titanium Variant of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
- Maturity Benefit
- Death Benefit
5.)A Grace Period, Reduced paid-up & Revival of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
6.)Free Look-Up Period of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
7.)Surrendering the Max Life Smart Fixed Return Digital Plan – Titanium Variant
8.)Advantages of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
9.)Disadvantages of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
10.)Research Methodology
11.)IRR Analysis of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
12.)Max Life Smart Fixed Return Digital Plan – Titanium Variant Vs Other Investment Products
13.)Final Verdict on the Max Life smart Fixed Return Digital Plan – Titanium Variant
What is Max Life Smart Fixed Return Digital Plan?
Max Life Smart Fixed Return Digital Plan is a Non-Linked, Non-Participating, Individual, Life Insurance, Savings Plan.
It provides a safety net for your family & builds a savings corpus.
It provides a maturity benefit if you survive the term, and a death benefit that can act as a financial net for your family in case the worst-case scenario happens.
Features of the Max Life Smart Fixed Return Digital Plan
- The onboarding process is easy, quick & hassle-free.
- Flexibility to choose the level of Death Benefit cover you need for the financial security of your family.
- Enjoy higher benefits for higher premiums paid, as per your chosen financial goals.
- It offers special benefits for its women customers.
- The plan offers Guaranteed Returns payable as a lump sum at maturity.
- You have the option of taking a loan against policy to help you in case of financial emergencies.
- Tax benefits as per Sec 80C & Sec 10(10D).
Eligibility Criteria of the Max Life Smart Fixed Return Digital Plan
Let us look at the eligibility criteria of the Max Life Smart Fixed Return Digital Plan under each variant it offers in a tabular column below;
| Gold | Platinum / Titanium | |
|---|---|---|
| Premium Paying term | Single pay | 5 years |
| Premium Paying mode | Single pay | Annual, Semi-Annual, Quarterly Monthly |
| Minimum premium | 35000 | Annual: 11,000 |
Semi-Annual: 6,000
Quarterly:3,000
Monthly:1,000Maximum premiumNo limit
| Coverage Type | Death Benefit Multiple | Policy Term (in years) | Age at Entry* (in years) | Age at Maturity* (in years) | |||
|---|---|---|---|---|---|---|---|
| Mini | Maxi | Mini | Maxi | ||||
| Gold | Single Life | 1.25 | 5 | 13 | 50 | 18 | 55 |
| 10 | 8 | 50 | 18 | 60 | |||
| 10 | 5 | 13 | 45 | 18 | 50 | ||
| 10 | 8 | 45 | 18 | 55 | |||
| Joint Life | 1.25 (1st death) | ||||||
10 (2nd death)513501855108501860Platinum / TitaniumSingle Life11513501855108501860
Benefits under the Titanium Variant of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
Maturity Benefit
A Guaranteed lump sum on survival at the end of the chosen period (Policy Term) of 5 or 10 years.
This lump sum includes additional benefits in the form of Guaranteed Additions which accrue once you have completed paying all your due premiums.
Death Benefit
A Death Benefit of at least 11 times the Annualized Premium.
A Grace Period, Reduced paid-up & Revival of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
Grace period
A grace period of 30 days for Annual, Semi-Annual and Quarterly modes and 15 days in case of Monthly Premium Payment Mode from the due date for payment of each premium will be allowed for payment of contractual premium.
Reduced paid-up
Once the policy acquires a surrender value, by default the policy will become RPU in case of non-payment of any further premium.
Revival
A lapse/RPU policy can be revived within a revival period of five consecutive years from the due date of the first unpaid premium.
Free Look-Up Period of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
If you disagree with any of those terms and conditions of the Max Life Smart Fixed Return Digital Plan, you can return the policy within a period of 15 days to the corporation from the date of receipt of the policy document.
The Free Look-Up Period will be extended up to 30 days from the date of receipt of the policy document in case of electronic policies and policies obtained through Distance Marketing modes.
Surrendering the Max Life Smart Fixed Return Digital Plan – Titanium Variant
The policyholder can surrender the policy anytime during the policy term after it has acquired a surrender value. The policy acquires a Surrender Value as follows:
5 Pay: On payment of the first two full years’ premium.
Single Pay: Immediately on payment of single premium.
The surrender value will be equal to the higher Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV).
Advantages of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
- It is a Non-Participating & Non-Linked Policy, so the benefits are guaranteed.
- The Premium Paying Term is limited but, you get life cover for a full term of the policy.
- Higher Maturity Benefits will be offered for higher premium bands.
- To increase their level of protection, optional riders can be added.
- Special benefits for female customers.
Disadvantages of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
- The Maturity Benefit will not suffice to fulfil your Life’s Financial Goals.
- Sum Assured on death is inadequate.
- There is no Loyalty addition.
For further details, you can refer to the Max Life Smart Fixed Return Digital Policy Brochure.
Research Methodology
Max Life Smart Fixed Return Digital Plan – Titanium variant has assured maturity benefits.
You pay a premium for 5 years & the maturity benefit is paid to you on surviving the policy term.
Let us calculate the Internal Rate of Return for this cash flow.
We can compare the returns with a Fixed Instrument Return. This will give us better clarity on our investment decision.
IRR Analysis of the Max Life Smart Fixed Return Digital Plan – Titanium Variant
A 40-year-old male opts for the Titanium variant of the Max Life Smart Fixed Return Digital Plan & chooses a policy term of 10 years, a premium paying term of 5 years.
The annual premium is ₹ 3,04,000 & the sum assured is ₹ 33,44,000.
He receives the sum assured on maturity on completion of 10 years.
| Fixed Return Digital plan – Titanium Variant | |||
|---|---|---|---|
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -3,04,000 | 33,44,000 |
| 41 | 2 | -3,04,000 | 33,44,000 |
| 42 | 3 | -3,04,000 | 33,44,000 |
| 43 | 4 | -3,04,000 | 33,44,000 |
| 44 | 5 | -3,04,000 | 33,44,000 |
| 45 | 6 | 0 | 33,44,000 |
| 46 | 7 | 0 | 33,44,000 |
| 47 | 8 | 0 | 33,44,000 |
| 48 | 9 | 0 | 33,44,000 |
| 49 | 10 | 0 | 33,44,000 |
| 50 | 26,90,775 | 33,44,000 | |
| IRR | 7.33% | ||
The IRR works out to be 7.33%. This return may seem beneficial for a traditional Life Insurance Plan.
But considering the policy term, this plan may not be beneficial in the long run. It is also important to note that until the completion of 10 years, your funds get locked.
Here the opportunity cost is investing in a better liquidity investment product. If you invest in Bank FDs, you may earn a similar return at the same time you may have better liquidity than the Max Life Smart Fixed Return Digital Plan.
In the long term, this plan may not be attractive, especially in the rising interest scenario.
Max Life Smart Fixed Return Digital Plan – Titanium Variant Vs Other Investment Products
Max Life Smart Fixed Return Digital Plan may not be beneficial for an investor from a liquidity perspective. We can compare this plan with other investment products.
We can assume all the metrics similar to the Max Life Smart Fixed Return Digital Plan – Titanium Variant. During the Premium Paying Term of 5 years, the premium amount can be utilised for life cover & corpus accumulation.
Max Life Smart Fixed Return Digital Plan – Titanium Variant Vs. Pure Term Insurance + ELSS Mutual Fund
The premium for a Pure Term Policy is Rs. 24,500, the Policy Term is for 10 years & the Premium Paying Term is for 5 years.
The balance amount of ₹ 2,79,500 can be invested for corpus accumulation. The choice of investment could be based on your risk appetite. Here, ELSS Mutual Fund is chosen.
| Term insurance + ELSS | |||
|---|---|---|---|
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 40 | 1 | -3,04,000 | 25,00,000 |
| 41 | 2 | -3,04,000 | 25,00,000 |
| 42 | 3 | -3,04,000 | 25,00,000 |
| 43 | 4 | -3,04,000 | 25,00,000 |
| 44 | 5 | -3,04,000 | 25,00,000 |
| 45 | 6 | 0 | 25,00,000 |
| 46 | 7 | 0 | 25,00,000 |
| 47 | 8 | 0 | 25,00,000 |
| 48 | 9 | 0 | 25,00,000 |
| 49 | 10 | 0 | 25,00,000 |
| 50 | 33,04,035 | 25,00,000 | |
| IRR | 10.07% | ||
The Maturity proceeds of the ELSS fund are taxable. We have made tax calculations & arrived at the Post-Tax Maturity Value & the Post-Tax IRR.
The ELSS Post-Tax calculation is given below.
| ELSS Tax calculation | |
|---|---|
| Pre-tax Maturity value | ₹ 35,04,761 |
| Less: Amount Invested | ₹ 13,97,500 |
| Long-Term capital gains | ₹ 21,07,261 |
| Less: Exemption limit | ₹ 1,00,000 |
| Taxable LTCG | ₹ 20,07,261 |
| Tax paid on LTCG | ₹ 2,00,726 |
| Post-tax Maturity value | ₹ 33,04,035 |
The ELSS Post-Tax IRR works out to be 10.07% which is higher than the Max Life Smart Fixed Return Digital Plan – Titanium Variant. Also, from the liquidity perspective, it is beneficial for the investor.
You can make partial withdrawals as & when required after the Lock-in period of 3 years instead of waiting for the whole policy term of 10 years.
Final Verdict on the Max Life smart Fixed Return Digital Plan – Titanium Variant
Max Life Smart Fixed Return Digital Plan is an Endowment Policy. You don’t need to worry about how the market is functioning as this plan offers you guaranteed returns at the time of maturity.
Though the maturity proceeds are guaranteed, you receive the proceeds only at the end of your Policy Term. Locking your funds for the long term is not beneficial from an investment perspective. This makes the policy look unattractive to the investor.
Choose an investment avenue that suits your time horizon of financial goals Viz Short term or long-term financial goal. Understand the cash flow pattern of the plan before investing. Also, have adequate life insurance, health insurance & emergency corpus before investing for your financial goals.
You can also consult with a Professional Financial Advisor to see which Investment Product is suitable for your Investment Portfolio for better results in the long run.
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