Bharti Axa Life has launched a new plan by the name ‘Bharti Axa life Monthly Income Plan’.
This plan is a limited premium paying term plan with a policy term of 25 or 30 years. This plan pays sum assured to the policyholder/nominee in equal monthly installments instead of lump sum payment.
The sum assured under this plan is payable to the policyholder as regular monthly income for 15 years after the end of premium paying term.
In the event of death of the policyholder during the premium paying term, the monthly income shall accrue to the nominee from the next policy month onwards for a period of 15 years.
Even if the death of policyholder occurs after the premium paying term i.e. during the monthly income benefit period, the entire monthly income shall accrue to the nominee once again for the period of 15 years irrespective of payouts already made to the policyholder.
Upside
Upside of this plan is its death benefit in the form of monthly income that will continue to accrue to the nominee for 15 years irrespective of any payouts made to policyholder when he/she was alive.
That means for a policy term of 30 years, if policyholder were to survive till the end of the policy term, he/she will be entitled for monthly income for the last 15 years of the policy term only. However, in the event of the death of the policyholder say in the 28th policy year, where he/she would have already received the monthly income for about 13 years, the nominee will be entitled for monthly income for 15 years once again.
Downside
Downside of this plan is its survival benefits. Considering high premium charged by the plan, returns lead to low yield for its policyholders. Instead of this plan an investor can earn more return by investing in Public Provident Fund (PPF) for 15 years.
If you want to invest in this plan, considering its cost structure it is advisable that you should opt for longer policy term of 30 years.