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Can the Tata AIA Sampoorna Raksha Promise Plan provide lifelong financial security for your loved ones?
Can the Tata AIA Sampoorna Raksha Promise Plan guarantee protection and peace of mind for your family’s future?
Can the Tata AIA Sampoorna Raksha Promise Plan secure your family’s future with a comprehensive plan?
This article explores the plan’s features, benefits, drawbacks, and return analysis, offering a detailed comparison to help you make an informed decision.
Table of Contents:
What is the Tata AIA Sampoorna Raksha Promise?
What are the features of Tata AIA Sampoorna Raksha Promise?
Who is eligible for Tata AIA Sampoorna Raksha Promise?
What are the benefits of Tata AIA Sampoorna Raksha Promise?
Grace period, Discontinuance and Revival of Tata AIA Sampoorna Raksha Promise
Free Look Period for the Tata AIA Sampoorna Raksha Promise
Surrendering the Tata AIA Sampoorna Raksha Promise
What are the advantages of the Tata AIA Sampoorna Raksha Promise?
What are the disadvantages of the Tata AIA Sampoorna Raksha Promise?
Research Methodology of the Tata AIA Sampoorna Raksha Promise
Benefit Illustration – IRR Analysis of Tata AIA Sampoorna Raksha Promise
Tata AIA Sampoorna Raksha Promise Vs. Other investments
Tata AIA Sampoorna Raksha Promise Vs. Pure-term + PPF / ELSS
Final Verdict on Tata AIA Sampoorna Raksha Promise
What is the Tata AIA Sampoorna Raksha Promise?
Tata AIA Sampoorna Raksha Promise is a non-linked, non-participating, pure risk, individual life insurance product. Tata AIA Sampoorna Raksha Promise Plan is the solution for comprehensive financial protection and security for your family. It leaves a lasting legacy for your loved ones, ensuring that our family’s financial needs are met.
What are the features of Tata AIA Sampoorna Raksha Promise?
- Flexibility to choose from 4 unique Death benefit options
- The whole-of-life coverage is available
- Acceleration of 50% of the base sum assured on diagnosis of terminal illness
- Inbuilt waiver of premium on terminal illness
- Flexibility to cover spouse under joint life option
- Option to receive death benefits as lumpsum and/or instalments
- 15% lower premium for Female lives
- The choice to transfer legacy sum assured to your child with the Family Plan option
- Instant payout on claim intimation
Who is eligible for Tata AIA Sampoorna Raksha Promise?
What are the benefits of Tata AIA Sampoorna Raksha Promise?
1.) Death Benefit
Option 1: Life Promise Option and Option 2: Life Promise Plus Option:
Under these options, the Tata AIA Sampoorna Raksha Promise policyholder chooses the Base SA at the time of purchase. In case the life assured dies during the policy term, the stipulated death benefit less any payout under Payor Accelerated Benefit will be paid out to the nominee.
The death benefit payable to the nominee is the highest of:
- 1.25 x Single Premium (excluding discount) or DB multiple x Annualised Premium (excluding discount);
- 105% of Total Premiums Paid up to the date of death; or
- An absolute amount assured to be paid on death
Option 3: Joint Life Promise Option and Option 4: Joint Life Promise Plus Option:
Under these options, the life assured (first life) and spouse of the life assured (second life) would be covered under the same policy. The Tata AIA Sampoorna Raksha Promise policyholder chooses the Base SA at the time of purchase.
In case of accidental death, an additional amount equal to the Base SA will be paid out to the nominee as a lump sum.
In case of the first death of either lives assured or simultaneous death of both the life assureds’ during the policy term, the stipulated death benefit less any payout under Payor Accelerated Benefit will be paid out to the nominee.
The death benefit payable to the nominee is the highest of:
- 1.25 x Single Premium (excluding discount) or DB multiple x Annualised Premium (excluding discount);
- 105% of Total Premiums Paid up to the date of death; or
- An absolute amount assured to be paid on death
2.) Payor Accelerator Benefit
(All four options)
An amount equal to 50% of the Base SA is paid out as a lump sum on acceptance of Terminal Illness (TI). All future premiums shall be waived off and the Tata AIA Sampoorna Raksha Promise policy will continue to remain in force for the remaining applicable benefit(s).
3.) Maturity Benefit
Option 1: Life Promise Option and Option 3: Joint Life Promise Option
In case the life assured survives till maturity, no additional benefit is payable
Option 2: Life Promise Plus Option and Option 4: Joint Life Promise Plus Option:
An amount equal to 100% of the Total Premiums Paid (excluding loading for modal premiums and discount) towards the base benefit option and “Life Stage” or “Top-up SA”, if opted and applicable, shall be payable at the end of the Policy Term, provided the life assured survives till maturity (Life Promise Plus) or both the life assured survive till maturity (Joint life Promise Plus).
Grace period, Discontinuance and Revival of Tata AIA Sampoorna Raksha Promise
Grace Period
The grace period for payment of the premium is 15 days, where the Tata AIA Sampoorna Raksha Promise policyholder pays the premium on a monthly basis and 30 days in all other cases.
Discontinuance
Life Promise and Joint Life Promise Options
Under regular premium paying mode, the Tata AIA Sampoorna Raksha Promise policy shall lapse at the end of the grace period and the risk cover and rider benefits, if any, will cease immediately.
Under limited payment mode, Unexpired Risk Premium Value is paid out after which the policy terminates
Life Promise Plus and Joint Life Promise Plus Options
Under both regular and limited pay – Before 1 full year’s premium is paid, the Tata AIA Sampoorna Raksha Promise policy shall lapse at the end of the grace period and the risk cover and rider benefits, if any, will cease immediately.
Under both regular and limited pay – After 1 full year’s premium is paid, the Tata AIA Sampoorna Raksha Promise policy will continue as a paid-up policy with reduced benefits Reduced Paid-up Sum assured). However, the policyholder shall have the option to surrender the policy.
Revival
You can revive your lapsed / Paid-up policy and the riders for its full coverage within five consecutive years from the due date of the first unpaid premium but before policy maturity.
Free Look Period for the Tata AIA Sampoorna Raksha Promise
If you have any objections to the terms and conditions of your Tata AIA Sampoorna Raksha Promise Policy, you may cancel the Policy within 30 days beginning from the date of receipt of the Policy document whether received electronically or otherwise.
Surrendering the Tata AIA Sampoorna Raksha Promise
The surrender benefit available under the product varies by the Option chosen. The Tata AIA Sampoorna Raksha Promise policy will terminate upon payment of this benefit.
Life Promise and Joint Life Promise Options
Regular pay: Risk-premium is zero
Single Pay and Limited Pay: Unexpired Risk Premium Value is payable.
Life Promise Plus and Joint Life Promise Plus Options
A Tata AIA Sampoorna Raksha Promise policy shall acquire a Surrender Value on completion of one policy year, provided one full year’s premium is paid for non-single pay policies. For Single Pay policies, the policy shall acquire a Surrender Value immediately after it is issued.
The surrender value shall be equal to the higher of the Guaranteed Surrender Value (GSV) and the Special Surrender Value (SSV)
What are the advantages of the Tata AIA Sampoorna Raksha Promise?
- With the Life Stage option, policyholders can increase their coverage upon experiencing significant life events.
- The Top-Up SA option allows policyholders to boost their life coverage by a set percentage each policy anniversary, with an additional premium.
- Upon maturity, policyholders have the option to extend their policy term.
- The Flexi Pay Benefit offers the flexibility to defer premium payments for up to 12 months.
- Enhance your coverage with comprehensive riders that offer unique health and wellness benefits.
- At the policy’s inception, the life insured has the option (with an additional premium) to transfer the Legacy Sum Assured to their child.
What are the disadvantages of the Tata AIA Sampoorna Raksha Promise?
- The Life Promise and Joint Life Promise options do not offer any maturity benefits.
- Loans are not available with this Tata AIA Sampoorna Raksha Promise plan.
- There is no surrender value for the Life Promise and Joint Life Promise options under the regular premium payment mode, as the risk premium is zero.
- The Whole Life option provides life coverage beyond your working years, which may be unnecessary.
Research Methodology of the Tata AIA Sampoorna Raksha Promise
The Tata AIA Sampoorna Raksha Promise offers life coverage for a specific term or your entire life. Under the Life Promise Plus and Joint Life Promise Plus Options, if the Tata AIA Sampoorna Raksha Promise policyholder survives the term, the premiums paid are returned.
However, in other plan options, no amount is payable upon survival. The premiums are simply refunded at maturity without any additional value, leading to a zero return on investment.
Benefit Illustration – IRR Analysis of Tata AIA Sampoorna Raksha Promise
To illustrate, consider an example from the policy brochure: A 40-year-old male selects the Tata AIA Sampoorna Raksha Promise Plan with a sum assured of ₹1 crore. He chooses a 20-year policy term with a 20-year premium payment term and opts for the Life Promise Plus Option.
| Male | 40 years |
| Sum Assured | ₹ 1,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 45,964 |
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -45,964 | 1,00,00,000 |
| 41 | 2 | -45,964 | 1,00,00,000 |
| 42 | 3 | -45,964 | 1,00,00,000 |
| 43 | 4 | -45,964 | 1,00,00,000 |
| 44 | 5 | -45,964 | 1,00,00,000 |
| 45 | 6 | -45,964 | 1,00,00,000 |
| 46 | 7 | -45,964 | 1,00,00,000 |
| 47 | 8 | -45,964 | 1,00,00,000 |
| 48 | 9 | -45,964 | 1,00,00,000 |
| 49 | 10 | -45,964 | 1,00,00,000 |
| 50 | 11 | -45,964 | 1,00,00,000 |
| 51 | 12 | -45,964 | 1,00,00,000 |
| 52 | 13 | -45,964 | 1,00,00,000 |
| 53 | 14 | -45,964 | 1,00,00,000 |
| 54 | 15 | -45,964 | 1,00,00,000 |
| 55 | 16 | -45,964 | 1,00,00,000 |
| 56 | 17 | -45,964 | 1,00,00,000 |
| 57 | 18 | -45,964 | 1,00,00,000 |
| 58 | 19 | -45,964 | 1,00,00,000 |
| 59 | 20 | -45,964 | 1,00,00,000 |
| 60 | 9,19,280 | 1,00,00,000 | |
| IRR | 0.00% |
The annual premium is ₹45,964. At the end of the policy term, he receives a maturity benefit of ₹9.19 lakhs. However, the internal rate of return (IRR) on this cash flow is zero as per the Tata AIA Sampoorna Raksha Promise Plan maturity calculator.
Insurance agents often promote the return of premium options, touting them as beneficial. In reality, these options offer little advantage to the policyholder and typically come with higher premiums compared to plans without this feature. We’ll delve deeper into this in the next section.
Tata AIA Sampoorna Raksha Promise Vs. Other investments
In personal finance, experts often advise starting your investment journey with a solid foundation of life and health insurance, backed by an emergency fund. In this regard, the Tata AIA Sampoorna Raksha Promise provides life coverage, but its premiums are on the higher side.
Let’s compare the premium of pure-term policies using the same metrics as mentioned in the previous example.
Tata AIA Sampoorna Raksha Promise Vs. Pure-term + PPF / ELSS
For a pure-term policy with a sum assured of ₹1 crore, the annual premium is ₹21,000, with both the policy term and premium payment term set at 20 years. By opting for a pure-term policy, you save ₹24,964 annually, which can then be invested elsewhere.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 1,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 21,000 |
| Investment | ₹ 24,964 |
High-risk investors might gravitate towards equity investments, while those with lower risk tolerance might prefer debt instruments. We’ve evaluated both options: investing in a PPF account for debt and an ELSS fund for equity.
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 40 | 1 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 41 | 2 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 42 | 3 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 43 | 4 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 44 | 5 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 45 | 6 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 46 | 7 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 47 | 8 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 48 | 9 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 49 | 10 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 50 | 11 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 51 | 12 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 52 | 13 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 53 | 14 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 54 | 15 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 55 | 16 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 56 | 17 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 57 | 18 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 58 | 19 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 59 | 20 | -45,964 | 1,00,00,000 | -45,964 | 1,00,00,000 |
| 60 | 11,08,117 | 1,00,00,000 | 18,40,778 | 1,00,00,000 | |
| IRR | 1.75% | 6.23% | |||
In the PPF account, the final value would be ₹11.08 lakhs, with an IRR of 1.75%. Although this return seems modest, it underscores the fact that the return of premium policies charges higher premiums only to repay them at the end of the term without generating real growth.
Conversely, the final pre-tax value in the ELSS fund would be ₹20.14 lakhs, with a post-tax value of ₹18.40 lakhs. The combined IRR for the ELSS investment and pure-term policy is 6.23% (post-tax return).
| ELSS Tax Calculation | |
| Maturity value after 20 years | 20,14,563 |
| Purchase price | 4,99,280 |
| Long-Term Capital Gains | 15,15,283 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 13,90,283 |
| Tax paid on LTCG | 1,73,785 |
| Maturity value after tax | 18,40,778 |
This comparison demonstrates the effective use of savings from opting for a pure-term life insurance policy. To achieve your life goals, it’s advisable to invest the saved premiums separately based on your risk tolerance, allowing you to build the necessary corpus over time.
Final Verdict on Tata AIA Sampoorna Raksha Promise
Life insurance plays a vital role in safeguarding your family’s future. Just as an investment portfolio is essential, so too is an insurance portfolio. Choosing the right product for your insurance needs is critical. The Tata AIA Sampoorna Raksha Promise Plan offers life insurance coverage for a fixed term or your entire life, with the added feature of returning the premiums if you survive the policy term.
However, a whole life cover that extends beyond your working years may be unnecessary and only adds to your premium burden and it also has a high agent commission. Similarly, while the return of the premium option may seem attractive, it comes with higher premiums.
These aspects increase your costs without offering significant value, making the Tata AIA Sampoorna Raksha Promise less suitable for your insurance portfolio.
A more effective approach is to opt for a pure-term life insurance policy and make separate investments to achieve your life goals. It’s important to carefully select your products and conduct a thorough analysis before making any decisions.
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If you need professional guidance, consulting a Certified Financial Planner is advisable. They have extensive knowledge of available products and can recommend options tailored to your risk tolerance, life goals, and time horizon.
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