All You Wanted To Know About Birla Sun Life Insurance’s Protection Plans     (03-Jan-2017 )



The statement, “Your family means the world to you”, is true irrespective where you live and what you do for a living. We all strive hard to offer them comfort, security, and happiness. But life is full of uncertainties and it is financially wise to provide for them. One such financial product that every working individual, with a dependent family, should opt for is a Term Insurance plan.

Among the plethora of term insurance plans currently available (with their variants), in today’s issue we have decided to evaluate the protection plans (term insurance) offered by Birla Sun Life Insurance (BSLI).

BSLI offers 3 plans under the protection plan category:

  1. Protect@Ease Plan: It is a traditional online term insurance plan. The plan offers an option to enhance the sum assured by 5% simple p.a. or 10% simple p.a. at inception depending upon one’s needs. On every policy anniversary, the sum assured will increase by 5% or 10% of the initial sum assured without any increase in the premium amount. It also provides an option to jointly cover one’s spouse in the same policy and enhance one’s cover at key milestones in one’s life. It provides built-in terminal illness benefit.

Here’s how the aforesaid plan differs from the existing plans offered by BSLI —BSLI Protector Plus Plan and BSLI Future Guard Plan

  1. BSLI Protection Plus Plan: It is a traditional life insurance plan. The plan offers an option to enhance the sum assured by 5% simple p.a. or 10% simple p.a. at inception depending upon one’s needs. On every policy anniversary, the sum assured will increase by 5% or 10% of the initial sum assured without any increase in the premium amount. The plan also offers a built in Total and Permanent Disability (TPD) cover.
     
  2. BSLI Future Guard Plan: It is a traditional non-participating life insurance plan offering “return of premium” option.

To make it simpler to understand here is a comparative table, to understand these plans…

An overview of Birla Sun Life Insurance's Protection Solutions
Parameters Protection Plus Plan Future Guard Plan Protect@Ease Plan
Objective Traditional term life insurance plan. Option of increasing sum assured with an in built Total and Permanent Disability (TPD) cover. Traditional non-participating life insurance plan with return of premium option on maturity. A traditional online term insurance plan with an inbuilt terminal illness benefit.
Entry Age 18 to 65 years 18 to 65 years 18 to 65 years
Policy Term 5 years to 30 years; subject to maximum age of 70 years 10 years to 30 years; subject to maximum age of 75 years 5 to 40 years; subject to maximum age of 80 years
Plan options Option 1: Level sum assured Option 2: Increasing sum assured Plan A:  100% return of your premiums paid
Plan B: 110% to 150% return of your premiums paid depending on your policy term
Option 1: Level sum assured
Option 2: Increasing sum assured
Sum Assured Minimum: Rs 30,00,000
Maximum: No limit
Minimum: Rs 5,00,000
Maximum: No limit
Minimum: Rs 30,00,000
Maximum: No limit
Premium payment term Regular pay Regular pay Single pay; limited pay - 5 to 7 years; regular pay
Premium payment mode Monthly, quarterly, half yearly and yearly Monthly, quarterly, half yearly and yearly Monthly or yearly
Riders 1) Accidental death and disability rider
2) Critical illness rider
3) Surgical care rider
4) Hospital care rider
5) Waiver of premium rider
6) Accidental death benefit rider plus
1) Accidental death and disability rider
2) Critical illness rider
3) Surgical care rider
4) Hospital care rider
5) Waiver of premium rider
6) Accidental death benefit rider plus
1) Accidental death and disability rider
2) Critical illness rider
3) Surgical care rider
4) Hospital care rider
5) Waiver of premium rider
6) Accidental death benefit rider plus
Total and Permanent Disability (TPD) benefit 50% of the sum assured at inception subject to a maximum of Rs 50,00,000 will be paid to the life insured. No TPD benefit under this plan No TPD benefit under this plan
Joint Life protection option No joint life protection option under this plan No joint life protection option under this plan Option to cover spouse under the same plan. The sum assured applicable for the spouse shall
be equal to 50% of primary life insured's sum assured. This option shall only be available where the sum assured of primary life insured is greater than or equal to Rs 60,00,000.
Enhanced life stage protection No enhanced life stage protection benefit available under this plan No enhanced life stage protection benefit available under this plan This feature is available only for:
1) Level term assurance option and
2) Regular pay policy and
3) The attained age of life insured is less than or equal to 50 years while exercising this option.

This option is not available if Joint Life Protection is opted.

1) In case of first marriage - Enhanced protection of 50% of sum assured at the inception of policy (subject to a maximum of Rs 50,00,000)

2) Birth of first child - Enhanced protection of 25% of sum assured at the inception of policy (subject to a maximum of Rs 25,00,000)

3) Birth of second child - Enhanced protection of 25% of sum assured at the inception of policy (subject to a maximum of Rs 25,00,000)
Death benefit It will be higher of:
1) 10 times of annualised premium
2) 105% of all the premiums paid as on the date of death
3) Sum assured at the time of death
It will be higher of:
1) 10 times of annualised premium
2) 105% of all the premiums paid as on the date of death
3) Sum assured at the time of death or Maturity sum assured
For regular and limited pay:
It will be the higher of:
1) 10 times of annualised premium
2) 105% of all the premiums paid as on the date of death
3) Sum assured at the time of death

For single pay:
It will be the higher of:
1) 125% of single premium for all ages
2) Minimum guaranteed sum assured on maturity; or
3) Absolute amount assured to be paid on death
Option of receiving the death benefit by the nominee 1) Lump sum payment or
2) Staggered payment
Lump sum payment 1) Lump sum payment or
2) Staggered payment
Maturity Benefit No maturity benefit under this plan Plan A:  100% return of your premiums paid
Plan B: 110% to 150% return of your premiums paid depending on your policy term
No maturity benefit under this plan
Surrender Benefit No surrender benefit under this plan The policy will acquire a surrender value after all due premiums for at least three full policy years are paid. No surrender benefit under this plan
Policy Loan No option to avail policy loan under this plan No option to avail policy loan under this plan No option to avail policy loan under this plan
Note: The table is for illustration purpose only
(Source: Product Brochures of all the three plans)


According to BSLI's life insurance calculator, the annual regular pay premiums for a non-smoking male aged 34 years for a sum assured of Rs 1 crore for a policy term of 30 years under different plans are as follows:

Sum Assured Option Annual Premium (Rs) (inclusive of taxes) (excluding premium for riders) (rounded off)
Level term assurance 11,724
Increasing sum assured—5% increasing level 18,952
Increasing sum assured—10% increasing level 26,203
Note: The table is for illustration purpose only
(Source: BSLI Online term plan premium calculator)


To Conclude…

The premiums offered by BSLI are competitive vis-à-vis other term insurance plans offered by other life insurance companies. Avoid purchasing a return of premium policy. The returns are paltry when you compare it with the time horizon. Always go for a pure term insurance plan with lump sum payment on death of the life insured.

The amount of premium should not be the only criteria to choose the insurer. Make sure to look at crucial factors such as operational years of the company, claim assistance of the company, the number of branches of the company, customer service, methods of paying the premiums etc. before you pick an insurer.

The recent amendment to Section 45 of the Insurance Act, 1938 makes it mandatory for all life insurance companies, operating in India, to settle all death claims (irrespective of mis-representation or mis-statement) after 3 years of the policy being in effect. This amendment reduces the importance of the claim settlement ratio, as one of the parameters that individuals use to choose the life insurance company.

Also, make sure you evaluate your needs and don't mix investments with insurance. They are best kept separate. While you evaluate your needs, make sure to use scientific measures on human life value to calculate the amount of insurance you would require before signing on the dotted line.

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