Max New York Life Fast Track Plan


Name of Policy 

Max New York Life Fast Track Plan

Type of Policy

ULIP

Various Investment Options

Choice  of six well managed funds to suit your risk appetite:

·         Growth Super Fund

·         Conservative Fund

·         Secure Fund

·         Growth Fund

·         Balanced Fund

·         Money Market Fund

 

Features

Parameter

Value

Minimum/Maximum Entry Age of Life Insured

30/60 years

Maximum Age of Life Assured at Maturity

70 years

Premium Payment Term & Policy Term

Single – 10 year term

5 Pay – 10 year term

10 Pay – 20 year term

Premium Payment Mode

Limited Pay: Annual/Semi-Annual/Quarterly & Monthly Modes. Quarterly/Monthly mandatory on standing instructions – Electronic Clearance System/Direct Debit/Credit Card.

Minimum Annual Target Premium

All Variants: Rs. 1,00,000

Maximum Annual Target Premium

No Limit

Sum Assured Multiples

Limited Pay

Age 30 to 45 years: 10 or 20 times ATP

Age 46 to 60 years: 10 times ATP

Single Pay(SP)

Age 30 to 45: 1.25 or 5 times SP

Age 46 to 60: 1.25 times SP

Death Benefit

Sum Assured + Fund Value

Riders Offered

Personal Accident Benefit, Dread Disease

 

Charges

Explanation

Premium Allocation Charge

The premium allocation charge will be 4% of annual Premium throughout the Premium Payment Term in case you opt for a 5 Pay or 10 Pay option.

The Premium allocation charge for single premium is 2%.

Policy Administration Charge

This is a charge expressed as fixed amount of Rs.900 p.a.(Rs. 75 per month) for Single Pay & Rs.1500(Rs.125 per month) for 5 Pay & 10 Pay variants and is levied at each monthly anniversary by cancelling proportionate units starting from the first Policy Year. This charge will inflate @5% p.a. compounded annually starting from the 2nd Policy Year

Mortality Charge

Mortality Rates per thousand sum at risk:

Age

30

35

40

45

Mortality Charge(Rs)

1.61

1.82

2.49

3.55

Switching Charge

No switching charge is applicable, 12 switches are allowed in a policy year and all are free of charge

Redirection Charge

No redirection charge is applicable, 12 redirection are allowed in a policy year and all are free of charge.

Partial Withdrawal Charge

No Partial Withdrawal charge is applicable, 12 partial withdrawals are allowed in a policy year and all are free of charge.

Surrender/Discontinuance Charge

This charge shall be levied on the Fund Value at the time of discontinuance of Policy or effective surrender whichever is earlier, as per the following table:

If Policy is surrendered/discontinued

Surrender/Discontinuation Charge shall be lower of the following

As a %age of ATP

As a %age of Fund Value

Fixed amount

In 1st Policy Year

6%

6%

6,000

In 2nd Policy Year

4%

4%

5,000

In 3rd Policy Year

3%

3%

4,000

In 4th Policy year

2%

2%

2,000

 

Fund Management Charge*

Fund Name

Growth Fund

Growth Super Fund

Balanced Fund

Conservative Fund

Money Market Fund

Secure Fund

Secure Plus Fund***

Fund Managem-ent Charge p.a.

1.25%

1.25%

1.10%

0.90%

1.25%**

0.90%

0.90%

* Charges shall not increase during the term of the policy and are subject to the term and approval of the authority.

** Under this fund, declared NAV will not be less than the previous day NAV for which a cost of guarantee charge of 0.35% p.a. is levied and is included within the FMC of 1.25% p.a.

*** Available only with STP option.

Illustration

Let us assume a simple case:

  •      Your age: 33 years
  •      Investment: Rs.1 lakh every year for the next 10 years.
  •      Policy term: 20 years
  •      Annual Target Premium: Rs.1,00,000 per year
  •      Maturity Value @ 10%: Rs. 31,88,566 @6%: Rs. 17,22,669

The life insurance component is miniscule, not exceeding 10/20 times your annual premium. If you really want life insurance, a good term plan will give you life insurance of about 500 times your annual premium – so you would rather avoid the  fund.

 

 

Let’s see what you get:

  •       life cover plus Investment
  •      Of your first year premium of Rs. 1,00,000/-  4%+Rs 1500 p.a.+ Mortality chargeis removed. Most of this goes to your agent’s pocket. Only the remaining gets invested in the fund.
  •      Of your second year premium of Rs.50,000/- .4%+Mortality charge gets removed again. Most of this again goes to your agent, and only the remaining gets invested.
  •       In addition to this, of your total fund, the fund management charge of ~1.35% is cut every year
  •       Instead, if this Rs.50,000 per year had gone into a Systematic Investment Plan in a Mutual Fund, giving a return of approximately 15% a year on a five year average, not a single Rupee would have been deducted as policy charges. It would not take a mathematician to deduce that the returns here will be much better.

 

In summary, investments can deliver returns only if the costs are not so high.

 

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