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Don’t we all, as we embark on life’s journey, dream of milestones that mark our progress – a child’s education, their future marriage, a golden retirement, and perhaps even more?
But how do we ensure we’re prepared for these significant moments?
Well, meticulous planning and smart investing are key. And let’s not forget about safeguarding against the unexpected twists life throws our way. That’s where life insurance steps in, providing a safety net when we need it most.
Today, we’re diving into the Max Life Whole Life Super Plan, dissecting its inner workings like advantages and disadvantages (pros and cons) to see how it could be the missing piece in your financial puzzle. Ready to explore?
Table of Contents:
1. What is the Max Life Whole Super Plan?
2. What are the Features of Max Life Whole Life Super Plan?
3. Who is Eligible for the Max Life Whole Super Plan?
4. What are the benefits of the Max Life Whole Super Plan?
5. Grace Period, Discontinuance of premium & Revival of Max Life Whole Super Plan
6. Free Look Period of Max Life Whole Super Plan
7. Surrendering Max Life Whole Life Super Plan
8. What are the Advantages of Max Life Whole Life Super Plan?
9. What are the Disadvantages of Max Life Whole Life Super Plan?
10. Research Methodology of Max Life Whole Super Plan
11. Benefit Illustration – IRR Analysis of Max Life Whole Super Plan
12. Max Life Whole Super Plan Vs Other Investment Products
13. Effective channelising of premium
14. Final Verdict on Max Life Whole Life Policy
What is the Max Life Whole Super Plan?
Max Life Whole Super Plan is a Non-Linked Participating Individual Life Insurance Savings Plan. Under this Max Life Whole Super Plan, you pay premiums for only a limited number of years and enjoy protection up to the age of 100 years. With the power of bonuses, life cover continues to increase as your age increases.
What are the Features of Max Life Whole Life Super Plan?
- The Max Life Whole Super Plan offers you guaranteed protection till 100 years of age.
- Option to choose the Premium Payment Terms between 5/10/15 years.
- Maturity Benefit of 100% of Guaranteed Sum Assured.
- Maturity Benefit of 100% of Guaranteed Sum Assured
- Flexibility to choose your Bonus Options either Paid in Cash or Paid-up Addition as per your need.
- Flexibility to withdraw money to meet any of your Life’s Milestones.
Who is Eligible for the Max Life Whole Super Plan?
| Minimum | Maximum | |
| Age at Entry | 18 years | 50/55/60 years |
| Maximum Age at Maturity | 100 years | |
| Policy term | 100 less age at Entry | |
| Premium Paying Term | 10/15/20 years | |
| Sum Assured | ₹ 50,000 | No Limits |
What are the benefits of the Max Life Whole Super Plan?
i.) Death benefit
On death during the term of the Max Life Whole Super Plan policy, the following benefit will be paid:
Guaranteed Death Benefit, plus Accrued Paid Up Additions (if any), plus Terminal Bonus (if any)
Guaranteed Death Benefit is defined as higher of:
- 11 times Annualised premium or
- 105% of all the Total Premiums Paid as of the date of death of the life insured or
- Guaranteed Sum Assured on Maturity chosen by the Policyholder at Max Life Whole Super Plan policy inception
ii.) Maturity Benefit
On the Max Life Whole Super Plan policy anniversary immediately following or coinciding with Life Insured attaining the age of 100 years, the following benefit shall be paid:
Guaranteed Sum Assured on Maturity + Accrued Paid Up Additions (if any) + Terminal Bonus (if any)
iii.) Bonuses
You can choose one of the below-mentioned options:
Paid In Cash: Bonus declared by the Company is paid out to the Policyholder as and when declared
Premium Offset: Bonus declared by the Company will be used to offset future premiums payable by the Policyholder
Paid Up Additions (PUA): A bonus declared by the Company will be used to purchase Paid Up Additions (PUA). These PUA increase the Living and Death Benefits under the policy and will be payable in full on the earlier of Death or Maturity
Grace Period, Discontinuance of premium & Revival of Max Life Whole Super Plan
i.) Grace Period
A grace period of 30 days from the premium due date (15 days in case of Monthly mode) for payment of each premium will be allowed.
ii.) Discontinuance of Premium
Once the policy acquires a surrender value after payment of 2 full years’ premiums, by default the policy will become Reduced Paid-Up in case of nonpayment of any further premium.
iii.) Revival
Once the policy has lapsed, it can be revived within a revival period of five years from the due date of the first unpaid premium. Death benefit & Maturity benefit will be reduced using the proportionate premiums method.
Free Look Period of Max Life Whole Super Plan
You have a period of 15 days (30 days if the Max Life Whole Super Plan policy is sourced through Distance Marketing modes) from the date of receipt of the policy document, to review the terms and conditions of the policy, where if you disagree with any of those terms and conditions, you have the option to return the Max Life Whole Super Plan policy.
Surrendering Max Life Whole Life Super Plan
The policyholder can surrender the Max Life Whole Super Plan policy at any time after it has acquired a surrender value. The Max Life Whole Super Plan policy acquires a Surrender Value immediately on payment of the first two years’ premium. The surrender value will be equal to the higher of Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV).
What are the Advantages of Max Life Whole Life Super Plan?
- Up to 50% of the Guaranteed Sum Assured on Maturity is payable on diagnosis of Critical illness.
- Riders can be added to the base policy.
- Tax benefit for premium paid & Benefits received.
What are the Disadvantages of Max Life Whole Life Super Plan?
- No Loan is available under this Max Life Whole Super Plan.
- Bonuses are non-guaranteed amounts.
Research Methodology of Max Life Whole Super Plan
In this section, we will assess the Max Life Whole Super Plan based on its return percentage. The Max Life Whole Life Policy offers lifelong protection. Bonuses can be received either when declared or accumulated and withdrawn at a later time. If not withdrawn, paid-up bonuses are disbursed upon maturity.
Let’s calculate the Internal Rate of Return for this Max Life Whole Super Plan using the official calculator figures provided in the policy leaflet.
Benefit Illustration – IRR Analysis of Max Life Whole Super Plan
A 30-year-old male buys Max Life Whole Life Super with a Guaranteed Sum Assured on Maturity of ₹ 5,00,000. He chooses a 20-year policy term. His annualised premium is ₹12,405.
| Male | 30 years |
| Sum Assured | ₹ 5 Lakhs |
| Policy Term | 100-30 = 70 years |
| Premium Paying term | 20 years |
| Annualised Premium | ₹ 12,405.00 |
The below scenarios are depicted at an assumed rate of returns with 4% p.a. and 8% p.a. and these are not the upper or lower limits of what one can expect from this Max Life Whole Super Plan policy, as it is dependent on a number of factors including future investment performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 30 | 1 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 31 | 2 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 32 | 3 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 33 | 4 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 34 | 5 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 35 | 6 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 36 | 7 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 37 | 8 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 38 | 9 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 39 | 10 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 40 | 11 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 41 | 12 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 42 | 13 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 43 | 14 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 44 | 15 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 45 | 16 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 46 | 17 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 47 | 18 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 48 | 19 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 49 | 20 | -12,405 | 5,00,000 | -12,405 | 5,00,000 |
| 50 | 21 | 0 | 5,00,000 | 0 | 5,00,000 |
| 51 | 22 | 0 | 5,00,000 | 0 | 5,00,000 |
| 52 | 23 | 0 | 5,00,000 | 0 | 5,00,000 |
| 53 | 24 | 0 | 5,00,000 | 0 | 5,00,000 |
| 54 | 25 | 0 | 5,00,000 | 0 | 5,00,000 |
| 55 | 26 | 0 | 5,00,000 | 0 | 5,00,000 |
| 56 | 27 | 0 | 5,00,000 | 0 | 5,00,000 |
| 57 | 28 | 0 | 5,00,000 | 0 | 5,00,000 |
| 58 | 29 | 0 | 5,00,000 | 0 | 5,00,000 |
| 59 | 30 | 0 | 5,00,000 | 0 | 5,00,000 |
| 60 | 31 | 0 | 5,00,000 | 0 | 5,00,000 |
| 61 | 32 | 0 | 5,00,000 | 0 | 5,00,000 |
| 62 | 33 | 0 | 5,00,000 | 0 | 5,00,000 |
| 63 | 34 | 0 | 5,00,000 | 0 | 5,00,000 |
| 64 | 35 | 0 | 5,00,000 | 0 | 5,00,000 |
| 65 | 36 | 0 | 5,00,000 | 0 | 5,00,000 |
| 66 | 37 | 0 | 5,00,000 | 0 | 5,00,000 |
| 67 | 38 | 0 | 5,00,000 | 0 | 5,00,000 |
| 68 | 39 | 0 | 5,00,000 | 0 | 5,00,000 |
| 69 | 40 | 0 | 5,00,000 | 0 | 5,00,000 |
| 70 | 41 | 0 | 5,00,000 | 0 | 5,00,000 |
| 71 | 42 | 0 | 5,00,000 | 0 | 5,00,000 |
| 72 | 43 | 0 | 5,00,000 | 0 | 5,00,000 |
| 73 | 44 | 0 | 5,00,000 | 0 | 5,00,000 |
| 74 | 45 | 0 | 5,00,000 | 0 | 5,00,000 |
| 75 | 46 | 0 | 5,00,000 | 0 | 5,00,000 |
| 76 | 47 | 0 | 5,00,000 | 0 | 5,00,000 |
| 77 | 48 | 0 | 5,00,000 | 0 | 5,00,000 |
| 78 | 49 | 0 | 5,00,000 | 0 | 5,00,000 |
| 79 | 50 | 0 | 5,00,000 | 0 | 5,00,000 |
| 80 | 51 | 0 | 5,00,000 | 0 | 5,00,000 |
| 81 | 52 | 0 | 5,00,000 | 0 | 5,00,000 |
| 82 | 53 | 0 | 5,00,000 | 0 | 5,00,000 |
| 83 | 54 | 0 | 5,00,000 | 0 | 5,00,000 |
| 84 | 55 | 0 | 5,00,000 | 0 | 5,00,000 |
| 85 | 56 | 0 | 5,00,000 | 0 | 5,00,000 |
| 86 | 57 | 0 | 5,00,000 | 0 | 5,00,000 |
| 87 | 58 | 0 | 5,00,000 | 0 | 5,00,000 |
| 88 | 59 | 0 | 5,00,000 | 0 | 5,00,000 |
| 89 | 60 | 0 | 5,00,000 | 0 | 5,00,000 |
| 90 | 61 | 0 | 5,00,000 | 0 | 5,00,000 |
| 91 | 62 | 0 | 5,00,000 | 0 | 5,00,000 |
| 92 | 63 | 0 | 5,00,000 | 0 | 5,00,000 |
| 93 | 64 | 0 | 5,00,000 | 0 | 5,00,000 |
| 94 | 65 | 0 | 5,00,000 | 0 | 5,00,000 |
| 95 | 66 | 0 | 5,00,000 | 0 | 5,00,000 |
| 96 | 67 | 0 | 5,00,000 | 0 | 5,00,000 |
| 97 | 68 | 0 | 5,00,000 | 0 | 5,00,000 |
| 98 | 69 | 0 | 5,00,000 | 0 | 5,00,000 |
| 99 | 70 | 0 | 5,00,000 | 0 | 5,00,000 |
| 100 | 8,89,991 | 5,00,000 | 45,67,862 | 5,00,000 | |
| IRR | 2.12% | 4.87% | |||
Here the policyholder chooses the Paid-up addition bonus option. So, all bonuses are receivable at maturity. At the assumed bonus rate of 4% p.a., the final maturity value is 8.89 Lakhs as per the Max Life Whole Life Policy super plan calculator. The IRR for the 4% scenario is 2.12% as per the Max Life Whole Life Policy super plan calculator.
At the assumed bonus rate of 8% p.a., the final maturity value is 45.67 Lakhs. The IRR for the 4% scenario is 4.87%.
The primary downside of the Max Life Whole Life Super Plan is that undrawn bonuses offer no immediate benefit to the policyholder. These bonuses are only payable upon maturity or in the event of death.
The Internal Rate of Return (IRR) in both scenarios falls short, being lower than the inflation rate. Consequently, purchasing the Max Life Whole Life Policy super plan cannot be deemed an investment, as its benefits cannot be utilized for achieving life goals. Even opting for yearly cash bonuses does not provide flexibility for significant expenses or life goals.
Max Life Whole Super Plan Vs Other Investment Products
Investing in a whole life insurance policy might seem like a prudent decision for securing financial stability throughout one’s lifetime. The fundamental purpose of life insurance is to provide financial protection for dependents in the event of the policyholder’s death. After retirement, when individuals are no longer in the active earning phase and their dependents are financially independent, the need for life cover significantly decreases.
Therefore, purchasing a whole life insurance policy after retirement holds little to no practical value, as the retirement corpus is adequately equipped to fulfill the financial needs without the need for additional life cover.
Effective channelising of premium
In essence, the retirement corpus serves as a robust financial safety net, eliminating the necessity for an additional life insurance policy. By redirecting the funds that would have been allocated towards whole life insurance premiums into retirement savings and investments, individuals can further bolster their financial security during retirement.
Opting for a pure-term life insurance policy until the age of 60-65 is often ample. These policies offer substantial coverage at reasonable premiums, allowing for significant savings. These saved funds can then be strategically directed elsewhere for maximum benefit.
Investing in the Public Provident Fund (PPF), a debt instrument, provides a stable return of 7.1% per annum. Alternatively, for those willing to embrace risk, opting for equity mutual funds presents a more favourable option. On average, equity mutual funds yield around 12% per annum.
Final Verdict on Max Life Whole Life Policy
Max Life Whole Life provides coverage for the entirety of one’s life. The Max Life Whole Super Plan policy gradually accrues bonuses over time, which can be accessed as necessary. It’s important to note that these bonuses are not guaranteed.
If withdrawn annually, the accumulated cash bonus may either be spent on discretionary expenses or, if left untouched, may not contribute additional value to the policyholder, as it is only available at maturity or in the event of death.
Max Life’s whole life policy may not be the most efficient investment vehicle for everyone, as their returns are typically lower compared to other investment options like mutual funds or even debt instruments due to multiple reasons including High Agent commission.
It is crucial to carefully consider the premiums, as they tend to be higher compared to term life insurance. As previously mentioned, the funds saved by selecting a pure-term life insurance policy can be efficiently allocated toward wealth accumulation.
For crucial financial decisions, would you rely solely on information from social media platforms like Quora, Facebook, Twitter? Please Consult a financial advisor to determine the appropriate life coverage and devise a strategy for achieving your financial goals. A customized financial plan can address all your requirements.
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