Tata AIA Smart Sampoorna Rakshak Plan: Good or Bad? A Detailed ULIP Review

Listen to this article

Can the Tata AIA Smart Sampoorna Rakshak secure your family’s financial future with protection and growth?

Can the Tata AIA Smart Sampoorna Rakshak could combine life insurance with wealth creation?

Can the Tata AIA Smart Sampoorna Rakshak plan offer lifelong protection and the potential for wealth accumulation?In this review, we’ll explore the plan’s features, benefits, drawbacks, and evaluate potential returns through IRR analysis. Let’s determine if this plan is right for you.

What is the Tata AIA Smart Sampoorna Rakshak?

Tata AIA Life Insurance Smart Sampoorna Raksha is a Unit-linked, Non-participating, Individual Life Insurance Plan. Tata AIA Smart Sampoorna Rakshak is a protection and savings-oriented Unit Linked Insurance Plan that makes your money grow steadily over time with a choice of multiple funds and also provides adequate life cover to your loved ones.

What are the features of Tata AIA Smart Sampoorna Rakshak?

Flexibility to pay Regular premium or Limited premium of 5, 10 and 12 years
Choose from 21 funds ranging from equity-oriented to fixed income-focused, based on your risk appetite
Safeguard your financial goals through Death Benefits in case of unfortunate death during the policy term
Refund of 2X Premium Allocation Charges in policy years 10, 11, 12 and 13
Refund of 2X Mortality Charges from the 11^th policy year onwards.
Tax benefit as per applicable tax laws

Who is eligible for the Tata AIA Smart Sampoorna Rakshak?

	Minimum	Maximum
Entry Age	18 years	60 years
Maturity Age	48 years	100 years
Policy term	30 years	40 years
Premium paying term	Limited pay: 5/10/12 years Regular pay: equal to the policy term
Premium payment frequency	Annual, Half-yearly, Quarterly and Monthly
Minimum Annualised Premium	Limited Pay 5 years: ₹ 60,000 Others: ₹ 18,000 Top-up Premium: ₹ 5,000 per Top-up
Basic Sum assured	10 times the annualised premium	No limit

What are the benefits of the Tata AIA Smart Sampoorna Rakshak?

1.) Maturity benefit

On survival to the end of the Tata AIA Smart Sampoorna Rakshak policy term, you will receive the Total Fund Value including Top-Up Premium Fund Value valued at applicable NAV on the date of Maturity.

2.) Death benefit

In case of death of the life insured during the Tata AIA Smart Sampoorna Rakshak policy term and while the policy is in force, the Nominee/legal heir will get the Highest of

The Basic Sum Assured net of all “Deductible Partial Withdrawals”, if any, from the Regular Premium Fund Value, or
The Regular Premium Fund Value of this Policy or
105% of the total Regular Premiums paid up to the date of death.

In addition to this: The highest of

The approved Top-up Sum Assured(s) or
Top-up Premium Fund Value of this Policy or
105% of the total Top-up Premiums paid up to the date of death.

3.) Refund of charges

Refund of 2X Mortality Charges: Starting from the 11^th policy year, at the end of each Tata AIA Smart Sampoorna Rakshak policy month, 2 times the mortality charge (excluding underwriting extra and taxes) deducted in the 120^th month prior shall be added to the Fund Value in the form of addition of units.

Refund of 2X Premium Allocation Charges: At the end of the 10th, 11th 12th and 13th policy years, 2 times the total Premium Allocation Charges (excluding taxes) deducted 10 years prior (i.e. over the policy years 1,2 3 and 4 respectively) shall be added to the Fund Value in the form of addition of units.

What are the Investment Strategies and Fund options of the Tata AIA Smart Sampoorna Rakshak?

You can choose from the 21 investment fund options with the option to use the Enhanced Systematic Money Allocation & Regular Transfer (Enhanced SMART) portfolio strategy.

Your allocable Regular Premium and Top-ups (if any) are invested in one or more investment funds as per your chosen asset allocation.

S.no	Fund Name	Risk Profile	Asset Allocation
			Equity	Debt	Money Market
1	Emerging opportunities Fund	High	80-100%	0-10%	0-20%
2	Sustainable Equity Fund	High	80-100%	0-20%	0-20%
3	Multi Cap Fund	High	60-100%	0-40%	0-40%
4	India Consumption Fund	High	60-100%	0-40%	0-40%
5	Top 50 Fund	High	60-100%	–	0-40%
6	Top 200 fund	High	60-100%	–	0-40%
7	Super Select Equity Fund	High	60-100%	0-40%	0-40%
8	Large Cap Equity Fund	High	80-100%	–	0-20%
9	Whole Life Mid-Cap Equity Fund	High	60-100%	–	0-40%
10	Dynamic Advantage Plan	Medium	20-80%	20-80%	0-20%
11	Whole Life Aggressive Growth Fund	Medium to High	50-80%	20-50%	0-30%
12	Whole Life Stable Growth Fund	Low to Medium	30-50%	50-70%	0-20%
13	Whole Life Income Fund	Low	–	60-100%	0-40%
14	Whole Life Short-Term Fixed Income Fund	Low	–	60-100%	0-40%
15	Flexi Growth Fund	High	70-100%	0-10%	0-30%
16	Constant Maturity Fund	Medium	–	80-100%	0-20%
17	Target Maturity Fund	Medium	–	80-100%	0-20%
18	Small cap Discovery Fund	High	70-100%	0-10%	0-30%
19	Business Cycle Fund	High	70-100%	0-30%	0-30%
20	Rising India Fund	High	70-100%	0-30%	0-30%
21	Mid-cap Momentum Index Fund	High	0-80%	–	0-20%
			Govt Sec	Money market
	Discontinued policy fund		60-100%	0-40%

Enhanced SMART option

This option is applicable till PPT only. An enhanced SMART strategy is not available with top-up premium funds.

The Tata AIA Smart Sampoorna Rakshak policyholder gets the choice between two funds—a debt-oriented fund and an equity-oriented fund—under the Enhanced SMART option. For the variety of available funding, please see the table below:

Debt oriented funds	Equity oriented funds
Whole Life Income Fund	Large Cap Equity Fund
Whole Life Short-Term Fixed Income Fund	Whole Life Mid-Cap Equity Fund
Constant Maturity Fund	Multi Cap Fund
Target Maturity Fund	India Consumption Fund
	Top 50 Fund
	Top 200 fund
	Super Select Equity Fund
	Emerging opportunities Fund
	Sustainable Equity Fund
	Flexi Growth Fund
	Small cap Discovery Fund
	Business Cycle Fund
	Rising India Fund
	Mid-cap Momentum Index Fund

Here, the entire annual allocable premium is parked in the selected debt-oriented fund before being systematically transferred into the Tata AIA Smart Sampoorna Rakshak policyholder’s preferred equity fund It allows you to enter the volatile equity market in a structured manner.

What are the charges under the Tata AIA Sampoorna Rakshak?

A. Premium Allocation Charge

Premium Allocation Charge as below will be deducted from the Regular Premium. The net Regular Premium after the deduction of charges is invested in Funds as per your choice.

Policy Year	% of Annualised Premium
1	12%
2	6%
3	5%
4	3%
5^th year onwards	Nil

B. Policy Administration Charge

A Policy Administration Charge of 0.41% of the Annualised premium from the 5^th policy year will be deducted by cancelling Units at the NAV from the Fund Value of the policy at the beginning of each Tata AIA Smart Sampoorna Rakshak policy month.

This charge may be increased by up to a maximum of 5% p.a. compounded annually subject to a maximum of Rs.500 per month

C. Fund Management Charge

Sr. No	Fund Name	Fund Management Charge p.a.
1	Multi Cap Fund	1.20%
2	India Consumption Fund	1.20%
3	Top 50 Fund	1.20%
4	Top 200 fund	1.20%
5	Super Select Equity Fund	1.20%
6	Large Cap Equity Fund	1.20%
7	Whole Life Mid-Cap Equity Fund	1.20%
8	Whole Life Aggressive Growth Fund	1.10%
9	Whole Life Stable Growth Fund	1.00%
10	Whole Life Income Fund	0.80%
11	Whole Life Short-Term Fixed Income Fund	0.65%
12	Emerging opportunities Funds	1.20%
13	Sustainable Equity Fund	1.20%
14	Dynamic Advantage Fund	1.35%
15	Flexi Growth Fund	1.20%
16	Constant Maturity Fund	0.80%
17	Target Maturity Fund	0.80%
18	Small cap Discovery Fund	1.20%
19	Business Cycle Fund	1.20%
20	Rising India Fund	1.20%
21	Mid-cap Momentum Index Fund	1.20%
	Discontinued policy fund	0.50%

D. Mortality Charges

The Mortality Charge of the Basic Policy will be deducted by cancelling Units at the current NAV, from the Regular Premium Fund value of the Policy on each Tata AIA Smart Sampoorna Rakshak Policy Month Anniversary.

Age	25	35	45	55
Mortality charge per 1000 Sum at risk p.a.	0.787	1.016	2.179	6.348

E. Discontinuance charges

The discontinuance charge depends on the year of discontinuance, premium amount & premium paying term. There is no discontinuance charge after the 5^th policy year onwards.

F. Partial Withdrawal Charge

There are no partial withdrawal charges under the Tata AIA Smart Sampoorna Rakshak Plan

G. Fund Switching Charge

There are 12 (twelve) free switches per policy year. Thereafter a charge of ₹ 100 per switch will be applicable

H. Premium Re-direction Charge

There is no fund re-direction charge applicable under this Tata AIA Smart Sampoorna Rakshak plan

Inference from the charges:

The charges mentioned above are relatively high compared to other market-linked investments. Premium allocation charges, policy administration fees, and discontinuance charges act as overhead costs for investors, ultimately reducing your long-term returns.

Grace Period, Discontinuance & paid-up and Revival for Tata AIA Smart Sampoorna Rakshak

i.) Grace period

A Grace Period of 30 days (15 days for monthly mode) from the due date of the first unpaid premium will be allowed in the Tata AIA Smart Sampoorna Rakshak Policy.

ii.) Discontinuance & Paid-up

For Regular / Limited pay policies

Discontinuance of payment of premium during first five policy years (Lock-in Period) – Upon the expiry of the grace period, the Fund Value, by the creation of units will be credited into the Discontinued Policy Fund after deducting applicable Discontinuance Charges.

The risk cover under the Plan will stop and no further charges will be levied other than the Fund Management Charge. The Tata AIA Smart Sampoorna Rakshak Policyholder is not permitted to exercise Switches or Partial Withdrawals during this time.

Discontinuance of payment of premium post first five policy years (i.e., after the expiry of the Lock in Period) – the policy shall be converted into a reduced paid-up policy with the paid-up sum assured i.e., current sum assured multiplied by the total number of premiums paid to the original number of premiums payable as per the terms and conditions of the Policy.

iii.) Revival

You will have a Revival Period of three years from the Date of Discontinuance to revive your Tata AIA Smart Sampoorna Rakshak policy.

Free look period for Tata AIA Smart Sampoorna Rakshak

If you disagree with the terms of the Tata AIA Smart Sampoorna Rakshak policy, you can return the policy within 30 days beginning from the date of receipt of the policy document, whether received electronically or otherwise.

Surrendering Tata AIA Smart Sampoorna Rakshak

Within the lock-in period of Policy (5 years) – The “Discontinued Policy Fund,” which is kept by the Company, will be credited with the fund value less any applicable discontinuance charges as of the date of discontinuance.

The ‘Proceeds of the Discontinued Policy’, or the fund value as of the date of discontinuance plus all income collected after deducting fund management fees, shall be paid to the policyholder after completion of the lock-in period.

After the Lock-in Period (5 years) – the total fund value as of the date of complete withdrawal shall be paid to the Tata AIA Smart Sampoorna Rakshak policyholder.

What are the advantages of the Tata AIA Smart Sampoorna Rakshak?

After the 5^th policy year, a maximum of 4 partial withdrawals are allowed in a policy year.
You have the flexibility to pay additional premiums as a Top-up premium and the Sum assured will increase accordingly.
You have the option to receive the maturity benefit either in lumpsum or in the form of periodical payments over a settlement period of 5 years.
Flexibility to customize your product by adding optional riders

What are the disadvantages of the Tata AIA Smart Sampoorna Rakshak?

A loan facility is not available.
The lock period is five years.
After the deduction of charges, only the net premium is invested.
Life cover is inadequate.
During the settlement term, the Tata AIA Smart Sampoorna Rakshak policyholder bears the investment risk in the investment portfolio.

Research Methodology of Tata AIA Smart Sampoorna Rakshak

Market-linked products come with significant risks, making it crucial to assess potential returns before investing.

Calculating these returns allows for comparison with other investments, enabling informed decisions. Let’s determine the Internal Rate of Return (IRR) using figures from the policy brochure.

Benefit Illustration – IRR Analysis of Tata AIA Smart Sampoorna Rakshak

Consider a 35-year-old male who chooses the Tata AIA Smart Sampoorna Rakshak Plan with a sum assured of ₹10 lakhs. The policy term is 40 years, with a premium payment term of 10 years and an annual premium of ₹50,000.

Male	35 years
Sum Assured	₹ 10,00,000
Policy Term	40 years
Premium Paying Term	10 years
Annualised Premium	₹ 50,000

At the end of the term, he receives the fund value. Illustrations suggest two assumed future investment returns: 8% p.a. and 4% p.a. These rates are not guaranteed and do not reflect the maximum or minimum potential returns.

		At 4% p.a.		At 8% p.a.
Age	Year	Annualised premium / Maturity benefit	Death benefit	Annualised premium / Maturity benefit	Death benefit
35	1	-50,000	10,00,000	-50,000	10,00,000
36	2	-50,000	10,00,000	-50,000	10,00,000
37	3	-50,000	10,00,000	-50,000	10,00,000
38	4	-50,000	10,00,000	-50,000	10,00,000
39	5	-50,000	10,00,000	-50,000	10,00,000
40	6	-50,000	10,00,000	-50,000	10,00,000
41	7	-50,000	10,00,000	-50,000	10,00,000
42	8	-50,000	10,00,000	-50,000	10,00,000
43	9	-50,000	10,00,000	-50,000	10,00,000
44	10	-50,000	10,00,000	-50,000	10,00,000
45	11	0	10,00,000	0	10,00,000
46	12	0	10,00,000	0	10,00,000
47	13	0	10,00,000	0	10,00,000
48	14	0	10,00,000	0	10,00,000
49	15	0	10,00,000	0	10,00,000
50	16	0	10,00,000	0	10,00,000
51	17	0	10,00,000	0	10,00,000
52	18	0	10,00,000	0	10,00,000
53	19	0	10,00,000	0	10,00,000
54	20	0	10,00,000	0	10,00,000
55	21	0	10,00,000	0	10,00,000
56	22	0	10,00,000	0	10,00,000
57	23	0	10,00,000	0	10,00,000
58	24	0	10,00,000	0	10,00,000
59	25	0	10,00,000	0	10,00,000
60	26	0	10,00,000	0	10,00,000
61	27	0	10,00,000	0	10,00,000
62	28	0	10,00,000	0	10,00,000
63	29	0	10,00,000	0	10,00,000
64	30	0	10,00,000	0	10,00,000
65	31	0	10,00,000	0	10,00,000
66	32	0	10,00,000	0	10,00,000
67	33	0	10,00,000	0	10,00,000
68	34	0	10,00,000	0	10,00,000
69	35	0	10,00,000	0	10,00,000
70	36	0	10,00,000	0	10,00,000
71	37	0	10,00,000	0	10,00,000
72	38	0	10,00,000	0	10,00,000
73	39	0	10,00,000	0	10,00,000
74	40	0	10,00,000	0	10,00,000
75		9,03,428		40,22,575

	IRR	1.68%		6.01%

With a 4% return, the fund value is ₹9.03 lakhs, yielding an IRR of 1.68%, which essentially offers no value addition. At an 8% return, the fund value reaches ₹40.22 lakhs, yielding an IRR of 6.01% as per the Tata AIA Smart Sampoorna Rakshak Plan maturity calculator.

While Tata AIA Smart Sampoorna Rakshak is a market-linked product, its returns are comparable to those of a debt instrument.

The risk and returns are not proportionate, impacting your investment decision. This imbalance between risk and return is a significant drawback of the Tata AIA Smart Sampoorna Rakshak.

Tata AIA Smart Sampoorna Rakshak Vs. Other Investments

Alpha generation is a key factor in any market-linked investment, but it’s notably absent in Tata AIA Smart Sampoorna Rakshak. Additionally, the life cover provided is insufficient.

To better understand its performance, let’s compare the Tata AIA Smart Sampoorna Rakshak with other investments using the same criteria. Rather than combining life cover with market returns, separating them can lead to better overall returns.

Tata AIA Smart Sampoorna Rakshak Vs. Pure Term + PPF / ELSS

For life insurance, a pure term life insurance policy with a sum assured of ₹10 lakhs costs ₹11,800 annually. The policy term is 35 years, with a 10-year premium payment period.

After paying the premium from the ₹50,000, you’re left with ₹38,200 for investment, which can be allocated according to your risk tolerance.

Pure Term Life Insurance Policy
Sum Assured	₹ 10,00,000
Policy Term	35 years
Premium Paying Term	10 years
Annualised Premium	₹ 11,800
Investment	₹ 38,200

Low-risk investors might opt for debt instruments like PPF, while high-risk investors could choose equity instruments like ELSS funds. Here, we consider both scenarios.

		Term Insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death benefit	Term Insurance premium + ELSS	Death benefit
35	1	-50,000	10,00,000	-50,000	10,00,000
36	2	-50,000	10,00,000	-50,000	10,00,000
37	3	-50,000	10,00,000	-50,000	10,00,000
38	4	-50,000	10,00,000	-50,000	10,00,000
39	5	-50,000	10,00,000	-50,000	10,00,000
40	6	-50,000	10,00,000	-50,000	10,00,000
41	7	-50,000	10,00,000	-50,000	10,00,000
42	8	-50,000	10,00,000	-50,000	10,00,000
43	9	-50,000	10,00,000	-50,000	10,00,000
44	10	-47,500	10,00,000	-50,000	10,00,000
45	11	-500	10,00,000	0	10,00,000
46	12	-500	10,00,000	0	10,00,000
47	13	-500	10,00,000	0	10,00,000
48	14	-500	10,00,000	0	10,00,000
49	15	-500	10,00,000	0	10,00,000
50	16	0	10,00,000	0	10,00,000
51	17	0	10,00,000	0	10,00,000
52	18	0	10,00,000	0	10,00,000
53	19	0	10,00,000	0	10,00,000
54	20	0	10,00,000	0	10,00,000
55	21	0	10,00,000	0	10,00,000
56	22	0	10,00,000	0	10,00,000
57	23	0	10,00,000	0	10,00,000
58	24	0	10,00,000	0	10,00,000
59	25	0	10,00,000	0	10,00,000
60	26	0	10,00,000	0	10,00,000
61	27	0	10,00,000	0	10,00,000
62	28	0	10,00,000	0	10,00,000
63	29	0	10,00,000	0	10,00,000
64	30	0	10,00,000	0	10,00,000
65	31	0	10,00,000	0	10,00,000
66	32	0	10,00,000	0	10,00,000
67	33	0	10,00,000	0	10,00,000
68	34	0	10,00,000	0	10,00,000
69	35	0	10,00,000	0	10,00,000
70	36	0	10,00,000	0	10,00,000
71	37	0	10,00,000	0	10,00,000
72	38	0	10,00,000	0	10,00,000
73	39	0	10,00,000	0	10,00,000
74	40	0	10,00,000	0	10,00,000
75		44,42,343		1,97,45,679

	IRR	6.30%		10.78%

A PPF account requires a minimum contribution of ₹500 for 15 years. Given the 10-year premium payment term, adjustments were made in the final year’s contribution. The PPF’s final maturity value is ₹44.42 lakhs, with an IRR of 6.30%.

For the ELSS fund, the pre-tax maturity value is ₹2.24 crores. After accounting for capital gains tax, the final maturity amount is ₹1.97 crores, yielding a post-tax IRR of 10.78%.

ELSS Tax Calculation
Maturity Value after 40 years	2,24,94,062
Purchase price	3,82,000
Long-Term Capital Gains	2,21,12,062
Exemption limit	1,25,000
Taxable LTCG	2,19,87,062
Tax paid on LTCG	27,48,383
Maturity value after tax	1,97,45,679

Despite being a debt instrument, the PPF offers higher returns than the 8% scenario of Tata AIA Smart Sampoorna Rakshak.

The ELSS fund, also a market-linked product, provides a superior risk-adjusted return. Additionally, it offers the flexibility to withdraw funds as needed, without restrictions.

The liquidity and inflation-beating returns of these alternatives are significant advantages compared to Tata AIA Smart Sampoorna Rakshak.

Final Verdict on Tata AIA Smart Sampoorna Rakshak

Market-related investments are typically intended for long-term goals, providing investors with the opportunity to take on higher risk.

However, while the Tata AIA Smart Sampoorna Rakshak is classified as a high-risk investment, its potential returns do not justify the level of risk involved. This could impede your wealth accumulation efforts.

Inflation can increase the cost of your goals over time, potentially leading to a shortfall in the funds needed for your future objectives and also it has a high agent commission.

Additionally, the sum assured by this plan is insufficient, making it likely that investing in Tata AIA Smart Sampoorna Rakshak could derail your financial plans.

A better alternative for securing your family’s future is a pure-term life insurance policy. These policies offer high coverage at affordable premiums, providing essential support in times of uncertainty.

To achieve your long-term goals, it’s crucial to develop a solid investment strategy that can effectively navigate the financial landscape.

When it comes to financial advice, do Quora, Facebook, and Twitter have the last word?

Before making any financial decisions, carefully evaluate the product. If you need clarification, consult a Certified Financial Planner who can help you create a personalized financial plan based on your time horizon, risk tolerance, and life goals.

Tata AIA Smart Sampoorna Rakshak Plan: Good or Bad? A Detailed ULIP Review

Table of Contents:

What is the Tata AIA Smart Sampoorna Rakshak?

What are the features of Tata AIA Smart Sampoorna Rakshak?

Who is eligible for the Tata AIA Smart Sampoorna Rakshak?