What protects the dreams & hopes of your loved ones?
Life insurance!
What salvages you from hefty medical bills?
Health Insurance!
What helps your money to grow?
Investment!
All these plans & policies should suffice your family’s ever-growing needs. Tata AIA has come up with a solution that covers our health, wealth & protection needs. The Tata AIA Param Rakshak Plus Solution claims to provide 360-degree protection that covers our life & health and also allows our wealth to grow. Let us look into the benefits of 3 schemes that come under the Tata AIA Param Rakshak Plus Solution.
Table of Contents
1.) An overview of Tata AIA Param Rakshak Plus Solution
2.) Features of TATA AIA Param Rakshak Plus Solution
3.) Eligibility Criteria of TATA AIA Param Rakshak Solution
4.) Advantages of TATA AIA Param Rakshak Solution
5.) Disadvantages of TATA AIA Param Rakshak Solution
6.) Research Methodology on TATA AIA Param Rakshak Plus Solution
7.) Benefit Illustration Analysis of TATA AIA Param Rakshak Plus Solution
8.) Final Verdict on TATA AIA Param Rakshak Plus Solution
An overview of Tata AIA Param Rakshak Plus Solution
The Tata AIA Param Rakshak Plus Solution comprises 3 plans under the Tata AIA life insurance company.
Tata AIA Param Rakshak Plus Solution:
TATA AIA Param Rakshak Plus Solution is a Unit-linked, Non-participating, Individual Life Insurance Plan for Savings and Life Protection (UIN:110L156V01).
Health Rider (UIN: 110A032V02) – Tata AIA Life Insurance Linked Comprehensive Protection Rider, a Non-linked, Non-participating, Individual Health Rider
Health Rider (UIN: 110A031V02) – Tata AIA Life Insurance Linked Comprehensive Health Rider policy, a Non-linked, Non-participating, Individual Health Rider.
| Features | Benefit | Param Rakshak plus solution | Param Rakshak solution |
| Life Insurance Cover | Lump sum benefit paid to the family in case of unfortunate death | ✅ | ✅ |
| Accidental Death Benefit | Additional Sum Assured in case of Accidental Death. 2X Additional Sum Assured in case of accidental death in public transport. | ✅ | ✅ |
| Accidental Total & Permanent Disability Benefit | Benefit pay-out in case of Total and Permanent disability due to the accident. 2X Benefit in case of disability due to an accident in public transport | ✅ | ✅ |
| Criticare Plus Benefit | 40 Critical Illness Conditions covered | ✅ | ❌ |
| HospiCare Benefit | Hospital Cash Benefit. Per day Hospitalization Benefit @ 0.5% of the Sum Assured. 2X of Per day Hospitalization Benefit for ICU Benefit | ✅ | ❌ |
| Return on Maturity at the end of the Policy Term. | Fund value on Maturity from the Base Plan (Market linked returns) | ✅ | ✅ |
Features of TATA AIA Param Rakshak Plus Solution:
- The plan offers you coverage up to the age of 100.
- Pay the annualised premium for a limited period or regular period.
- Flexibility in choosing the combination of accidental Death Benefit, Accidental Total & Permanent Disability Benefit, Critical illness & Terminal illness.
- On maturity the fund value from the base plan is payable.
- All the benefits under this plan can be received as per the requirement. It can be either in the form of lumpsum pay-out or income for a limited period or income till survivor of partner or waiver of premium.
Eligibility Criteria of TATA AIA Param Rakshak Solution:
| Min / Max Entry (age last birthday) | 18 years/60 years | |
| Max Age at Maturity (age last birthday) |
Permanent Disability Benefit (ATPD) – 85 years
|
|
| Coverage Term | 30 or 40 years, subject to the maximum maturity age (given above) | |
| Premium Payment Term (PPT) |
|
|
| Minimum Premium |
|
|
| Premium Mode | Annual only | |
| Sum Assured | Minimum | Maximum |
| Base (Life cover) – 50 Lakhs
ADB and ATPD – 50 Lakhs HCB – 10 Lakhs Criticare Plus – 20 Lakhs |
Base (Life cover) – No Limit
ADB and ATPD – 2 Cr. HCB – 40 Lakhs Criticare Plus – 1 Cr. |
|
| Increase /Decrease in Basic Sum Assured – Not allowed
Rider SA cannot exceed the base SA |
||
Advantages of TATA AIA Param Rakshak Solution:
- A complete 360-degree protection that helps in savings & other covers under a single policy. No need to buy multiple plans.
- There are 11 fund options to select for wealth accumulation.
- Tax benefit under Sec 80C & Sec 10 (10D).
Disadvantages of TATA AIA Param Rakshak Solution:
- The maturity benefits of the ULIP are not guaranteed. Locking the funds for a longer period is not advisable.
- Various charges are deducted from the premium & only the left-out balance gets invested in the chosen fund.
- Premium payment is allowed in annual mode alone.
- Although the premium paying term is limited, the fund value can be withdrawn after the end of the policy term of 40 years.
Research Methodology on TATA AIA Param Rakshak Plus Solution:
Till now, we have seen all the important details that we need to know about TATA AIA Param Rakshak Plus Solution.
These details can explain only a few things about TATA AIA Param Rakshak Plus Solution. But, it is not enough for us to decide whether it is suitable for your investment portfolio or not.
So, now, let’s do a detailed analysis of the TATA AIA Param Rakshak Plus Solution and how much return we can get from this plan by using the TATA AIA Param Rakshak Plus Solution online calculator.
Then we can use the same value on other investments to see how much investment return we can get from other investment plans.
Later, we are going to compare the IRR of TATA AIA Param Rakshak Plus Solution with other investments to see which performs better.
This can help us to decide whether we should purchase this plan or not.
Benefit Illustration Analysis of TATA AIA Param Rakshak Plus Solution:
The following table depicts the premium for various options that can be chosen under this plan. The premium for all the add-ons is mentioned in the respective cell. In this illustration, the policyholder is a 40-year-old male who included all the add-on options that are available in the Tata AIA Param Rakshak Plus Solution. Out of the total annual premium paid, deductions are made for the respective add-on features & the balance gets invested in ULIP (market-linked product).
The assumed future investment returns are 8% and 4%. These assumed rates of return are not guaranteed and there are no upper and lower limits on what you might get back at Maturity because the value of your Policy is dependent on several factors including future investment performance.
| 5 pay | 10 Pay | 12 Pay | Regular Pay (40 Years) | |||||
| Basic Sum Assured –
1 Crore |
1,96,078 | 1,11,111 | 94,340 | 61,350 | ||||
| Accidental Death Benefit –
1 Crore |
19,100 | 10,600 | 9,100 | 4,500 | ||||
| Accidental Total and Permanent Disability Benefit –
1 Crore |
11,500 | 6,400 | 5,500 | 2,700 | ||||
| CritiCare Plus Benefit –
20 Lakhs |
65,020 | 35,740 | 30,680 | 15,900 | ||||
| HospiCare Benefit –
10 Lakhs |
5,150 | 2,830 | 2,430 | 1,260 | ||||
| Total annual Premium | 2,96,848 | 1,66,681 | 1,42,050 | 85,710 | ||||
| Return in Value | IRR | Return in Value | IRR | Return in Value | IRR | Return in Value | IRR | |
| Return @ 4% | 10,90,489 | -0.81% | 13,36,403 | -0.62% | 13,67,509 | -0.64% | 28,52,024 | -0.92% |
| Return @ 8% | 61,00,430 | 3.79% | 58,51,303 | 3.59% | 58,92,703 | 3.64% | 74,40,671 | 3.47% |
The value of the fund at the end of the policy term is meagre to meet any financial goals. The IRR is negative if the fund return is 4%. The major reason for this low IRR is, the Fund management charges, premium allocation charge, Mortality charge & other rider charges are deducted from the premium. The balance amount is funnelled towards the chosen fund option.
Even if the fund return is 8%, the IRR ranges between 3.5% & 3.75%. Locking funds for non-guaranteed returns which are much lesser than the bank FD rate is not recommended. The IRR of Tata AIA Param Rakshak Plus Solution is not worthwhile in terms of investment.
This plan focuses on life & health cover mainly. So, the major chunk of the premium which is paid annually is utilised towards these covers. This is the reason for the low return on investment. Those who are having investment motives can look for other options like PPF & Mutual funds.
The current rate of interest for PPF is 7.1% & any equity mutual fund would deliver a 10 -12% return on average in the long run. Also, PPF & ELSS mutual funds are tax efficient & help to attain the required corpus for life goals.
Final Verdict on TATA AIA Param Rakshak Plus Solution:
After analysing all the factors of Tata AIA Param Rakshak Plus Solution, it creates an illusion of relieving you from the hassle of finding different plans for health, wealth & protection.
It is a comprehensive plan which also offers market-linked returns. This plan might be suitable for those who are looking for life cover with additional riders & health cover under one plan.
But the point to be noted is since the plan has numerous add-ons, the premium for these add-ons is a big burden in terms of investment perspective.
Since the money apportioned for savings after the allocation of various charges is limited, the return on investment on Tata AIA Param Rakshak Plus Solution is not sustainable in the long run.
In Tata AIA Param Rakshak Plus Solution, the investment is given relatively less importance. So, the “All in one plan” is not suitable for investors to chase their dreams. This plan is not ideal for investment.
Pure term insurance provides high coverage at a low premium. To enhance the term insurance’s utility, additional riders can be added according to the requirement of the individual. Similarly, health coverage for the family is required. The health cover (base policy) can also be added with Top-up plans if required.
Combining all with investment ruins the overall plan. Choose an appropriate investment vehicle to chase your dreams.
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