Tata AIA Sampoorna Raksha Plus Plan: Good or Bad? An Insightful Review

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Can the Tata AIA Sampoorna Raksha Plus Plan safeguard your loved ones with a trusted and reliable life insurance plan?

Can the Tata AIA Sampoorna Raksha Plus Plan ensure financial stability with a comprehensive protection plan?

Can the Tata AIA Sampoorna Raksha Plus Plan offer life cover and financial security for your loved ones?

Let’s explore this by reviewing the Tata AIA Sampoorna Raksha Plus plan. This article will analyse its features, advantages, disadvantages, and returns using an Internal Rate of Return (IRR) analysis.

What is the Tata AIA Sampoorna Raksha Plus?

Tata AIA Life Insurance Sampoorna Raksha Plus is a Non-Linked, Non-Participating, Individual Life Insurance, Savings Product. Tata AIA Life Insurance Sampoorna Raksha Plus not only protects you from the uncertainties of life but also gives you the return of premiums paid on survival till the maturity of the Policy.

What are the features of the Tata AIA Sampoorna Raksha Plus?

Flexibility to choose between two death benefit options:
i.) Sum Assured on Death as Lump sum benefit in death or
ii.) Sum Assured on Death as Lump sum benefit in death and monthly income for the next 10 years
Return of Premium, in case of survival till maturity
Life Cover for Tata AIA Life Insurance Sampoorna Raksha Plus Policy Terms of up to 40 years or up to Age 100 years
Choice of Regular or Limited (5 / 10 / 12 Years) Premium Paying Term
Lower premium rates for Non-Smokers and Female lives
Enhance your protection with the Optional Rider
Large Sum Assured discount for Higher Coverage
Tax benefit under Sec 80C and Sec 10(10D).

Who is eligible for the Tata AIA Sampoorna Raksha Plus?

Plan parameters	Minimum	Maximum
Age at Entry	18 years	For Regular Pay & Limited Pay 5 years: 70 For Limited Pay 10 years & 12 years: 65
Age at Maturity	28 years	100 years
Policy Term	Premium paying term	Policy term
	For Regular Pay & Limited Pay 5 years	10 to 40, Subject to a maximum maturity age of 100 years
	For Limited Pay for 10 years & 12 years	15 to 40, Subject to a maximum maturity age of 100 years
Premium paying term	Limited pay – 5,10,12 Regular pay
Basic sum assured	₹ 50,00,000	No limit
Annualised premium	Based on the minimum basic sum assured	Based on the maximum basic sum assured
Premium payment mode	Annual/ Half-yearly/ Quarterly/ Monthly

What are the benefits of Tata AIA Sampoorna Raksha Plus?

1.) Death benefit

Option 1: “Sum Assured on Death” payable on Death

Upon the death of the insured during the term of the Tata AIA Life Insurance Sampoorna Raksha Plus policy, provided the policy is in force, the death benefit i.e., the Sum Assured on Death is payable immediately to the Nominee.

Option 2: “Sum Assured on Death” payable on Death & Monthly Income thereafter for 10 years

Along with the Sum Assured on Death, the Nominee shall also receive a monthly income equal to 1% of the Basic Sum Assured for 10 years starting from the next monthly anniversary following the date of death.

Under both the options, “Sum Assured on Death” shall be defined as the highest of the following:

10 times the Annualized Premium
105% of the Total Premiums Paid up to the date of death
Minimum Guaranteed Sum Assured on Maturity
The absolute amount assured to be paid on death

2.) Maturity benefit

On survival till the end of the Tata AIA Life Insurance Sampoorna Raksha Plus policy term, the Total Premiums Paid will be returned

3.) Survival benefit

There is no survival benefit

Grace period, Reduced paid-up and Revival of Tata AIA Sampoorna Raksha Plus

Grace period

If you are unable to pay your Premium on time, starting from the premium due date, a grace period of 15 days for the monthly mode and 30 days for all other modes will be offered.

Lapse

At any time during the Tata AIA Life Insurance Sampoorna Raksha Plus policy term, if the premiums are not paid within the grace period, the policy will lapse. This will only be true in the case of those limited Pay 5 & limited Pay 10/ 12/ regular pay policies for which premiums have only been paid for less than 2 years.

Reduced paid-up

The Tata AIA Life Insurance Sampoorna Raksha Plus policy will be converted into a Reduced Paid-up policy by default, provided premiums for at least two (2) years are paid and subsequent premiums remain unpaid.

Revival

If a premium is in default beyond the Grace Period and subject to the Policy not having been surrendered, it may be revived within 5 years after the due date of the first unpaid premium and before the date of maturity.

Free Look Period of the Tata AIA Sampoorna Raksha Plus

If you are not satisfied with the terms and conditions, features of the policy, you have the right to cancel the policy within 15 days from the date of receipt of the policy document. The said period of 15 days shall stand extended to 30 days if the policy is sourced through distance marketing mode.

Surrendering Tata AIA Sampoorna Raksha Plus

The Tata AIA Life Insurance Sampoorna Raksha Plus policy shall acquire a Guaranteed Surrender Value and a Special Surrender Value and may be surrendered at any time during the term of the policy, provided at least two (2) full years’ premiums have been paid.

The surrender value = Higher of Guaranteed Surrender Value and Special Surrender Value) where,

Guaranteed Surrender Value = Guaranteed Surrender Value Factor multiplied by Total Premiums Paid Special Surrender Value = Special Surrender Value Factor multiplied by Total Premiums Paid

What are the advantages of the Tata AIA Sampoorna Raksha Plus?

For those who opt for a high level of protection, a High Protection Discount shall be given which is expressed as a percentage of the premium.
Special rates for non-smokers and preferential rates are also offered to female lives.

What are the disadvantages of the Tata AIA Sampoorna Raksha Plus?

The maturity benefit merely returns the premiums paid, without adding any real value.
The premium cost is high relative to the life coverage provided.

Research Methodology of Tata AIA Sampoorna Raksha Plus

The Tata AIA Sampoorna Raksha Plus plan provides life coverage throughout the policy term, with premiums payable either as limited pay or regular pay. If the Tata AIA Life Insurance Sampoorna Raksha Plus policyholder survives until the end of the term, the total premiums paid are refunded.

However, there is no additional value added to the maturity benefit. When we calculate the Internal Rate of Return (IRR) for this cash flow, it turns out to be zero.

Benefit Illustration – IRR Analysis of Tata AIA Sampoorna Raksha Plus

For example, a 30-year-old male purchases the Tata AIA Sampoorna Raksha Plus with a sum assured of ₹1 crore. The policy term and premium payment term are both 30 years, with an annual premium of ₹16,500.

Over the course of the policy, a total of ₹4,95,000 is paid in premiums, which is then returned as the maturity benefit at the end of the term.

Male	30 years
Sum Assured	₹ 1,00,00,000
Policy Term	30 years
Premium Paying Term	30 years
Annualised Premium	₹ 16,500

Age	Year	Annualised premium / Maturity benefit	Death benefit
30	1	-16,500	1,00,00,000
31	2	-16,500	1,00,00,000
32	3	-16,500	1,00,00,000
33	4	-16,500	1,00,00,000
34	5	-16,500	1,00,00,000
35	6	-16,500	1,00,00,000
36	7	-16,500	1,00,00,000
37	8	-16,500	1,00,00,000
38	9	-16,500	1,00,00,000
39	10	-16,500	1,00,00,000
40	11	-16,500	1,00,00,000
41	12	-16,500	1,00,00,000
42	13	-16,500	1,00,00,000
43	14	-16,500	1,00,00,000
44	15	-16,500	1,00,00,000
45	16	-16,500	1,00,00,000
46	17	-16,500	1,00,00,000
47	18	-16,500	1,00,00,000
48	19	-16,500	1,00,00,000
49	20	-16,500	1,00,00,000
50	21	-16,500	1,00,00,000
51	22	-16,500	1,00,00,000
52	23	-16,500	1,00,00,000
53	24	-16,500	1,00,00,000
54	25	-16,500	1,00,00,000
55	26	-16,500	1,00,00,000
56	27	-16,500	1,00,00,000
57	28	-16,500	1,00,00,000
58	29	-16,500	1,00,00,000
59	30	-16,500	1,00,00,000
60		4,95,000

	IRR	0.00%

Since there is no value addition, the return is effectively zero as per the Tata AIA Life Insurance Sampoorna Raksha Plus Plan maturity calculator. The return of premium, without accounting for the time value of money, results in no return on investment.

Tata AIA Sampoorna Raksha Plus Vs. Other investments

For life coverage, a pure-term insurance policy without a return of premium is the most suitable option. The premiums for these policies are lower compared to those with a return of premium.

The savings from choosing a pure-term life policy can then be invested separately. Let’s illustrate this with the following scenario.

Tata AIA Sampoorna Raksha Plus Vs. Pure Term + ELSS

Consider a pure-term life insurance policy with a sum assured of ₹1 crore, available for an annual premium of ₹12,700. The policy term and premium payment term are both 30 years. In comparison, a return of premium policy costs ₹16,800 annually.

Pure Term Life Insurance Policy
Sum Assured	₹ 1,00,00,000
Policy Term	30 years
Premium Paying Term	30 years
Annualised Premium	₹ 12,700
Investment	₹ 3,800

By opting for the pure-term policy, you save ₹3,800 each year, which can be invested separately. The investment vehicle should be selected based on individual risk tolerance.

Age	Year	Term Insurance premium + ELSS	Death benefit
30	1	-16,500	1,00,00,000
31	2	-16,500	1,00,00,000
32	3	-16,500	1,00,00,000
33	4	-16,500	1,00,00,000
34	5	-16,500	1,00,00,000
35	6	-16,500	1,00,00,000
36	7	-16,500	1,00,00,000
37	8	-16,500	1,00,00,000
38	9	-16,500	1,00,00,000
39	10	-16,500	1,00,00,000
40	11	-16,500	1,00,00,000
41	12	-16,500	1,00,00,000
42	13	-16,500	1,00,00,000
43	14	-16,500	1,00,00,000
44	15	-16,500	1,00,00,000
45	16	-16,500	1,00,00,000
46	17	-16,500	1,00,00,000
47	18	-16,500	1,00,00,000
48	19	-16,500	1,00,00,000
49	20	-16,500	1,00,00,000
50	21	-16,500	1,00,00,000
51	22	-16,500	1,00,00,000
52	23	-16,500	1,00,00,000
53	24	-16,500	1,00,00,000
54	25	-16,500	1,00,00,000
55	26	-16,500	1,00,00,000
56	27	-16,500	1,00,00,000
57	28	-16,500	1,00,00,000
58	29	-16,500	1,00,00,000
59	30	-16,500	1,00,00,000
60		9,28,598

	IRR	3.80%

In this example, the surplus is invested in an ELSS fund. After 30 years, the post-tax value of the ELSS fund is ₹9.28 lakhs, down from a pre-tax value of ₹10.27 lakhs, with an IRR of 3.80%.

ELSS Tax Calculation
Maturity value after 30 years	10,27,112
Purchase price	1,14,000
Long-Term Capital Gains	9,13,112
Exemption limit	1,25,000
Taxable LTCG	7,88,112
Tax paid on LTCG	98,514
Maturity value after tax	9,28,598

While the returns may not be exceptionally high, you still accumulate a substantial corpus over time. Compared to the Tata AIA Sampoorna Raksha Plus, this approach yields a higher final maturity amount, helping you achieve your life goals more effectively.

Final Verdict on Tata AIA Sampoorna Raksha Plus

Selecting life insurance coverage with an adequate sum assured is a fundamental step in financial planning. It acts as a safety net, providing financial security to your family.

Choosing the right life insurance plan is crucial, and there are several options available in the market, such as Endowment plans, Money-back plans, ULIPs, and pure-term plans.

Participating policies or Linked policies don’t offer any significant advantage over pure-term policies. These plans are often expensive provide little value in terms of investment and also have a high agent commission.

For instance, the Tata AIA Sampoorna Raksha Plus has higher premiums, which are returned at the end of the policy term.

On the other hand, opting for a pure-term policy offers savings on premiums. The combination of affordable premiums and an adequate (high) sum assured provides a significant advantage over other life insurance policies.

To achieve your financial goals, it’s advisable to build a separate investment portfolio tailored to your risk tolerance.

Choosing the right insurance and investment products is a critical aspect of financial planning. It’s important to carefully assess any plan before making a decision.

If you have any questions about selecting the right product, consulting a Certified Financial Planner is recommended. Their expertise can help you choose the appropriate products based on your personal preferences and goals.

Tata AIA Sampoorna Raksha Plus Plan: Good or Bad? An Insightful Review

Table of Contents:

What is the Tata AIA Sampoorna Raksha Plus?

What are the features of the Tata AIA Sampoorna Raksha Plus?

Who is eligible for the Tata AIA Sampoorna Raksha Plus?