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Does the Tata AIA Shubh Flexi Income Plan truly offer financial flexibility, or are there hidden strings attached?
Does the Tata AIA Shubh Flexi Income Plan provide real value, or is it just marketing hype?
Can the Tata AIA Shubh Flexi Income Plan help you achieve your long-term financial goals, or will it fall short when you need it most?
In this review, we will analyse its features, benefits, and drawbacks, along with a detailed illustration.
Table of Contents:
What is the Tata AIA Shubh Flexi Income Plan?
What are the features of the Tata AIA Shubh Flexi Income Plan?
Who is eligible for the Tata AIA Shubh Flexi Income Plan?
What are the benefits of the Tata AIA Shubh Flexi Income Plan?
Grace Period, Lapse and Paid-up policy and Revival of Tata AIA Shubh Flexi Income Plan
Free Look period for Tata AIA Shubh Flexi Income Plan
Surrendering Tata AIA Shubh Flexi Income Plan
What are the advantages of the Tata AIA Shubh Flexi Income Plan?
What are the disadvantages of the Tata AIA Shubh Flexi Income Plan?
Research Methodology of Tata AIA Shubh Flexi Income Plan
Benefit Illustration – IRR Analysis of Tata AIA Shubh Flexi Income Plan
Tata AIA Shubh Flexi Income Plan Vs. Other Investments
Tata AIA Shubh Flexi Income Plan Vs. Pure-term + ELSS
Final Verdict on Tata AIA Shubh Flexi Income Plan
What is the Tata AIA Shubh Flexi Income Plan?
TATA AIA Shubh Flexi Income Plan is an Individual, Non-Linked, Participating, Life Insurance Savings Plan.
It is a customizable savings plan that adapts to your financial goals, whether ensuring steady income for daily needs or planning for a comfortable retirement. It has a built-in financial security and growth potential.
What are the features of the Tata AIA Shubh Flexi Income Plan?
- Three plan options to choose from:
a) Endowment – Lump sum payout at maturity
b) Early Income – Regular income starts early
c) Deferred Income – Regular income starts after deferment period - Higher Cash Bonus potential with the deferment option
- Cover Continuance Benefit, ensuring:
a) Waiver of future premiums
b) Death benefit payout
c) Continuation of future benefit payouts - Waiver of Premium option to safeguard your loved ones:
a) Future premiums are waived
b) Life cover remains active
c) Benefit payouts continue - Flexibility to combine multiple plan options for a customized solution
- Choice of life cover level based on individual needs
Who is eligible for the Tata AIA Shubh Flexi Income Plan?
| Plan Parameters | Minimum | Maximum | |||
| Age at Entry | 0 days | 65 years | |||
| Age at Maturity | Cover till Age 100: 100 years | Cover till Age: 100 years | |||
| Other than Cover till Age 100: 18 years | Other than Cover till age 100: 85 years | ||||
| Premium Payment Term (PPT) | Option | Other than Cover till Age 100 | Cover till Age 100 | Other than Cover till Age 100 | Cover till Age 100 |
| Option 1 – Endowment | Limited Pay – | NA | Limited Pay – | NA | |
| 5 to 12 years | 5 to 12 years | ||||
| Regular Pay: Same as Policy term | Regular Pay: Same as Policy term | ||||
| Single Pay | Single Pay | ||||
| Option 2- Early Income | Limited Pay: 5 years | Limited Pay: 5 years | Limited Pay: 12 years | Limited Pay: 12 years | |
| Regular Pay: Same as Policy term | Regular Pay: Same as Policy term | ||||
| Single Pay | Single Pay | ||||
| Option 3- Deferred Income | Limited Pay: 5 years | Limited Pay: 12 years | |||
| Policy Term (PT) | Option | Other than Cover till Age 100 | Cover till Age 100 | Other than Cover till Age 100 | Cover till Age 100 |
| Option 1 – Endowment | 10 years | NA | 50 years | NA | |
| Option 2- Early Income | 10 Years | Limited Pay: 100 minus Entry Age | Limited Pay: | Limited Pay: | |
| Regular Pay/Single Pay: NA | 50 years, 60 – Entry Age, 85-Entry Age | 100 – Entry Age | |||
| Regular Pay/Single Pay: 50 years | Regular Pay/Single Pay: NA | ||||
| Option 3- Deferred Income | Limited Pay: 10 Years | 100 minus Entry Age | Limited Pay: | 100 – Entry Age | |
| Regular Pay/Single Pay: NA | 50 years, 60 – Entry Age, 85-Entry Age | ||||
| Regular Pay/Single Pay: BA | |||||
| Basic Sum Assured | Other than Single Pay: | No Limit, subject to the Board Approved Underwriting Policy (BAUP) | |||
| Age at Entry less than 50 years: | ₹ 84,000 | ||||
| Age at Entry 50 years and Above: | ₹ 60,000 | ||||
| Single Pay: ₹ 15,000 | |||||
| Premium (Rs.) | Rs. 12,000 per annum | No limit, subject to the Board Approved Underwriting Policy | |||
| Premium Payment Mode | Annual / Half-yearly / Quarterly / Monthly | ||||
| Income/Survival Benefit frequency | Annually in Advance/ Half-yearly in Advance / Quarterly in Advance / Monthly in Advance / Annually in Arrears / Half-yearly in Arrears / Quarterly in Arrears / Monthly in Arrears | ||||
What are the benefits of the Tata AIA Shubh Flexi Income Plan?
Death benefit
Option 1: Endowment
The Death Benefit shall be paid to the nominee, which is:
- Sum Assured on Death plus:
- Accrued Simple Reversionary Bonus (if any), plus
- Interim Bonus (if any), plus
- Terminal Bonus (if declared)
Further, the Death Benefit shall be a minimum of 105% of Total Premiums paid (excluding modal loadings).
Option 2: Early Income
The Death Benefit shall be paid to the nominee, which is:
- Sum Assured on Death plus:
- Interim Bonus (if any) plus
- Terminal Bonus (if declared) plus
- Sub-wallet Balance (if any)
Further, the Death Benefit shall be a minimum of 105% of Total Premiums paid (excluding modal loadings).
Option 3: Deferred Income
The Death Benefit shall be paid to the nominee, which is:
- Sum Assured on Death plus:
- Accrued Simple Reversionary Bonus (if any) plus
- Interim Bonus (if any) plus iii. Terminal Bonus (if declared) plus
- Sub-wallet Balance (if any)
Survival Benefit
Option 1: Endowment
No Survival Benefit is Payable
Option 2: Early Income and Option 3: Deferred Income
Provided the policy is in force and all due premiums have been paid, the TATA AIA Shubh Flexi Income Plan policyholder will receive a Cash Bonus, if declared, until death or end of policy term, whichever is earlier.
The survival benefit shall be payable after the end of the deferment period as per the payout frequency chosen by the policyholder.
Maturity Benefit
Option 1: Endowment
At the end of the TATA AIA Shubh Flexi Income Plan Policy Term, the Maturity Benefit will be:
- Sum Assured on Maturity plus
- Accrued Reversionary Bonus (if any), plus
- Terminal Bonus on Maturity (if declared).
Option 2: Early Income
At the end of the TATA AIA Shubh Flexi Income Plan Policy Term, the Maturity Benet will be:
- Sum Assured on Maturity plus
- Balance in Sub-wallet (if any) plus
- Terminal Bonus on Maturity (if declared).
Option 3: Deferred Income
At the end of the TATA AIA Shubh Flexi Income Plan Policy Term, the Maturity Benet will be:
- Sum Assured on Maturity plus
- Any Accrued Reversionary Bonus, plus
- Terminal Bonus on Maturity (if declared), plus
- Balance in Sub-wallet, if any
Grace Period, Lapse and Paid-up policy and Revival of Tata AIA Shubh Flexi Income Plan
Grace Period
A Grace Period of fifteen (15) days for the monthly mode and thirty (30) days for all other modes from the due date will be allowed for payment of each subsequent premium.
Lapse
On discontinuance of payment of premium during the first policy year, the TATA AIA Shubh Flexi Income Plan policy will lapse, and no further benefits shall be paid.
Paid-up
On discontinuance of payment of premium any time after the payment of the first year’s premium, it will be made Reduced Paid-up at the end of the grace period.
Revival
The TATA AIA Shubh Flexi Income Plan policy can be revived within the period of 5 years from the due date of the first unpaid premium by payment of all due premiums together.
Free Look period for Tata AIA Shubh Flexi Income Plan
If the Policyholder is not satisfied with the terms & conditions of the policy, s/he has the right to cancel the Policy within 30 days, whether received electronically or otherwise after the Policyholder receives the Policy Document.
Surrendering Tata AIA Shubh Flexi Income Plan
A Surrender value shall be payable on completion of one policy year, provided one full year’s premium is paid in case of a Regular/Limited Pay policy, and the same shall be payable immediately on payment of the single premium in case of a Single Pay policy.
The surrender value payable is higher of the Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV).
What are the advantages of the Tata AIA Shubh Flexi Income Plan?
- Optional Add-ons: Cover Continuance Benefit and Waiver of Premium Benefit can be added for enhanced protection.
- Future Cash Bonuses will be paid on the selected Special Date.
- Flexible Benefit Withdrawal: At inception or anytime during the policy term, the policyholder can choose to receive full or partial benefits in their Sub-Wallet.
- Premium Adjustment Option: For non-single pay policies, cash bonuses (if any) can be used to adjust future premium payments.
- Customizable Cash Bonus Payouts: Under Early Income and Deferred Income options, cash bonuses can be received annually, half-yearly, quarterly, or monthly as per preference.
- Exclusive Discounts: Special discounts are available for existing customers and women policyholders.
What are the disadvantages of the Tata AIA Shubh Flexi Income Plan?
- Limited Life Coverage: The plan offers inadequate protection.
- Lower Returns with Early Survival Benefits: Opting for early payouts reduces overall returns.
- Relatively Modest Returns: The plan may not provide competitive returns compared to other investment options.
- Fluctuating Survival Benefits: Payouts vary due to the dependency on bonuses.
Research Methodology of Tata AIA Shubh Flexi Income Plan
The Tata AIA Shubh Flexi Income Plan offers a key investment feature that allows policyholders to pay premiums for a limited period while choosing to receive survival benefits early or defer them.
The maturity benefit is provided at the end of the policy term. However, to make an informed decision, it is crucial to analyse the cash flow in terms of return percentages.
Benefit Illustration – IRR Analysis of Tata AIA Shubh Flexi Income Plan
Let’s consider a 30-year-old male opting for this plan with a 30-year policy term and a 10-year premium payment term, contributing an annual premium of ₹1,00,000. The base sum assured is ₹11 lakhs, and he selects Plan Option 1: Endowment, where the payout is received only at maturity.
| Male | 30 years |
| Sum Assured | ₹ 11,00,000 |
| Policy Term | 30 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
The illustration assumes investment returns of 4% and 8%, though these are not guaranteed and may vary based on actual policy performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 41 | 2 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 42 | 3 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 43 | 4 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 44 | 5 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 45 | 6 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 46 | 7 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 47 | 8 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 48 | 9 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 49 | 10 | -1,00,000 | 11,00,000 | -1,00,000 | 11,00,000 |
| 50 | 11 | 0 | 11,00,000 | 0 | 11,00,000 |
| 51 | 12 | 0 | 11,00,000 | 0 | 11,00,000 |
| 52 | 13 | 0 | 11,00,000 | 0 | 11,00,000 |
| 53 | 14 | 0 | 11,00,000 | 0 | 11,00,000 |
| 54 | 15 | 0 | 11,00,000 | 0 | 11,00,000 |
| 55 | 16 | 0 | 11,00,000 | 0 | 11,00,000 |
| 56 | 17 | 0 | 11,00,000 | 0 | 11,00,000 |
| 57 | 18 | 0 | 11,00,000 | 0 | 11,00,000 |
| 58 | 19 | 0 | 11,00,000 | 0 | 11,00,000 |
| 59 | 20 | 0 | 11,00,000 | 0 | 11,00,000 |
| 60 | 21 | 0 | 11,00,000 | 0 | 11,00,000 |
| 61 | 22 | 0 | 11,00,000 | 0 | 11,00,000 |
| 62 | 23 | 0 | 11,00,000 | 0 | 11,00,000 |
| 63 | 24 | 0 | 11,00,000 | 0 | 11,00,000 |
| 64 | 25 | 0 | 11,00,000 | 0 | 11,00,000 |
| 65 | 26 | 0 | 11,00,000 | 0 | 11,00,000 |
| 66 | 27 | 0 | 11,00,000 | 0 | 11,00,000 |
| 67 | 28 | 0 | 11,00,000 | 0 | 11,00,000 |
| 68 | 29 | 0 | 11,00,000 | 0 | 11,00,000 |
| 69 | 30 | 0 | 11,00,000 | 0 | 11,00,000 |
| 70 | 20,95,620 | 55,96,730 | |||
| IRR | 2.93% | 6.91% | |||
At a 4% return, the estimated maturity payout is ₹20.95 lakhs, resulting in an Internal Rate of Return (IRR) of 2.93% as per the TATA AIA Shubh Flexi Income Plan maturity calculator, which is lower than typical savings account interest rates.
At an 8% return, the projected maturity payout is ₹55.96 lakhs, yielding an IRR of 6.91% as per the TATA AIA Shubh Flexi Income Plan maturity calculator, which is comparable to or sometimes lower than bank fixed deposit interest rates.
Despite the long 30-year investment horizon, the returns from the Tata AIA Shubh Flexi Income Plan may struggle to keep pace with inflation, making it difficult to achieve future financial goals. Additionally, the life cover offered is insufficient.
Given the low life coverage and moderate returns, this plan may not be the most suitable choice for long-term investors looking for wealth creation and financial security
Tata AIA Shubh Flexi Income Plan Vs. Other Investments
While the Tata AIA Shubh Flexi Income Plan offers flexibility in receiving survival benefits, its returns are relatively low. The same premium could be better utilized to build a substantial corpus or generate a steady cash flow.
Although this plan combines life insurance and investment, separating these two components can lead to better financial outcomes. Let’s explore this using the same premium from the previous example.
Tata AIA Shubh Flexi Income Plan Vs. Pure-term + ELSS
A pure-term life insurance policy with a sum assured of ₹11 lakhs costs an annual premium of ₹10,800 for a 30-year term with a 10-year premium payment period. This leaves ₹89,200 annually, which can be invested based on individual risk tolerance.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 11,00,000 |
| Policy Term | 30 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 10,800 |
| Investment | ₹ 89,200 |
Low-risk investors may opt for debt instruments like the Public Provident Fund (PPF). High-risk investors could consider equity-based investments such as Equity-Linked Savings Schemes (ELSS). For this comparison, we assume investment in ELSS funds.
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 40 | 1 | -1,00,000 | 11,00,000 |
| 41 | 2 | -1,00,000 | 11,00,000 |
| 42 | 3 | -1,00,000 | 11,00,000 |
| 43 | 4 | -1,00,000 | 11,00,000 |
| 44 | 5 | -1,00,000 | 11,00,000 |
| 45 | 6 | -1,00,000 | 11,00,000 |
| 46 | 7 | -1,00,000 | 11,00,000 |
| 47 | 8 | -1,00,000 | 11,00,000 |
| 48 | 9 | -1,00,000 | 11,00,000 |
| 49 | 10 | -1,00,000 | 11,00,000 |
| 50 | 11 | 0 | 11,00,000 |
| 51 | 12 | 0 | 11,00,000 |
| 52 | 13 | 0 | 11,00,000 |
| 53 | 14 | 0 | 11,00,000 |
| 54 | 15 | 0 | 11,00,000 |
| 55 | 16 | 0 | 11,00,000 |
| 56 | 17 | 0 | 11,00,000 |
| 57 | 18 | 0 | 11,00,000 |
| 58 | 19 | 0 | 11,00,000 |
| 59 | 20 | 0 | 11,00,000 |
| 60 | 21 | 0 | 11,00,000 |
| 61 | 22 | 0 | 11,00,000 |
| 62 | 23 | 0 | 11,00,000 |
| 63 | 24 | 0 | 11,00,000 |
| 64 | 25 | 0 | 11,00,000 |
| 65 | 26 | 0 | 11,00,000 |
| 66 | 27 | 0 | 11,00,000 |
| 67 | 28 | 0 | 11,00,000 |
| 68 | 29 | 0 | 11,00,000 |
| 69 | 30 | 0 | 11,00,000 |
| 70 | 1,49,24,927 | ||
| IRR | 10.99% | ||
Potential Wealth Creation with ELSS
Pre-tax maturity value: ₹1.69 Crores
Post-tax maturity value (after capital gains tax): ₹1.49 Crores
Post-tax Internal Rate of Return (IRR): 10.99%
| ELSS Tax Calculation | |
| Maturity value after 30 years | 1,69,11,773 |
| Purchase price | 8,92,000 |
| Long-Term Capital Gains | 1,60,19,773 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 1,58,94,773 |
| Tax paid on LTCG | 19,86,847 |
| Maturity value after tax | 1,49,24,927 |
By adopting this term insurance + investment approach, the accumulated corpus is substantially higher than the Tata AIA Shubh Flexi Income Plan.
The higher return rate outpaces inflation, making it a far more effective strategy for wealth creation and financial growth.
Final Verdict on Tata AIA Shubh Flexi Income Plan
The Tata AIA Shubh Flexi Income Plan offers three options, allowing policyholders to choose based on their cash flow needs. While the plan’s cash flow design may appear attractive, its benefits are not guaranteed as they depend on bonuses.
A detailed returns analysis reveals that the returns are lower than inflation, limiting long-term wealth creation. The sum assured is inadequate, offering insufficient financial protection.
Both the insurance and investment aspects of the Tata AIA Shubh Flexi Income plan are not favourable for investors seeking growth and security and it also has a high agent commission.
As an investor, it is essential to align your financial choices with life goals and cash flow needs. Instead of combining insurance and investment, investing separately allows for better returns and flexibility.
Your investment selection should be based on risk tolerance and time horizon.
To ensure financial security, opt for pure-term life insurance, which provides adequate coverage at a lower cost.
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For strategic financial planning, consulting a Certified Financial Planner (CFP) can help you identify the right investment products tailored to your specific goals.
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