Max Life Insurance's Shiksha Plus Super is a comprehensive life insurance policy to secure the bright future of your child. The insurance cover includes guaranteed family income benefit and funding of future premiums in case of the death of the policy holder. Shiksha Plus Super is a unit-linked insurance plan, which means, it provides risk coverage to the policy holder, along with the option to build a sound corpus by investing in market-related securities. The scheme offers flexibility to select, both the policy term and premium payment term.
The scheme offers two policy variant, Five Pay and Regular Pay to policy holders. The Five Pay variant has a ten years policy term with five years as premium payment terms. While in Regular Pay, the premium payment term is the same as a policy term, which varies from 15 to 25 years.
On the date of maturity, the policy holder will receive an amount which is equal to the Fund Value. The fund value is the sum of units accumulated over the period multiplied by NAV of the fund on the date of policy maturity. Fund Value = (Sum of all accumulated fund units) X (NAV of the respective fund on maturity date)
In the event of an untimely death of the policy holder during the policy term, the nominee is entitled to the following:
Lumpsum Payout Upon Death
Following is the sum paid to the nominee, whichever is the highest will be paid.
Family Income Benefit (FIB)
The nominee will receive an amount equal to 10% of the sum assured annually, i.e. at the death date of the policy holder, till the end of the policy term, not exceeding ten instalments. In any case, the nominee will receive a guaranteed minimum of three such instalments. In the case of death of the policy holder when less than three years since the inception of the policy is left, any excess instalments to meet the minimum requirement of three instalments will be paid on the date of maturity.
Funding of Premium (FOP)
The Max Life insurance will continue to fund the premiums of the policy until the end of the policy tenure, and the Fund Value will be paid at the date of maturity. The nominee will receive full benefits of the policy, even after the death of the policy holder.
Guaranteed Loyalty Additions
The policy holder will receive an additional 0.20% of the Fund Value in the form of units, which will be added to the accumulated units at the end of every policy year, starting from the eleventh policy year. Thereafter, the Loyalty Additions increase by 0.02% in absolute terms every year until the end of the policy tenure. The loyalty additions will be made only on the premium paying policies, including the premiums that are funded by company. In case of revival of policies, the loyalty addition will be made based on the fund value prevailing at the revival date. Five Pay policy holders are not eligible for Loyalty Additions under this scheme.
Tax Benefits
The policy holder is entitled to tax benefits on the premium paid under Section 80C and claims on maturity proceedings under Section 10 (10D) of the Income Tax Act, 1961.
The scheme plan can be availed by those who meet the eligibility requirements. The first and foremost condition for buying this plan is: The person must have a child (own or legally adopted) between the age of 0 and 18 years.
| Criteria | Eligibility |
|---|---|
| Minimum Entry Age (as on last birthday) | 21 years |
| Maximum Entry Age (as on last birthday) | 50 years |
| Maximum Maturity Age |
The minimum and maximum annualised premium for both variants are given below.
Five Pay
| Policy Term | 10 years |
|---|---|
| Minimum Annualised Premium | Rs. 50,000 |
| Maximum Annualised Premium | No Limit |
| Minimum Sum Assured | Rs. 5,00,000 |
| Maximum Sum Assured | No Limit, subject to the Board approved underwriting policy. |
Regular Pay
| Policy Term | 15 to 25 years |
|---|---|
| Minimum Annualised Premium | Rs. 25,000 |
| Minimum Annual Premium for Non-Annual Payment Mode | Rs. 48,000 |
| Maximum Annualised Premium | No Limit |
| Minimum Sum Assured | |
| Maximum Sum Assured | No Limit, subject to the Board approved underwriting policy. |
As discussed above, the policy holder can choose to invest in six funding options or use Max Life's investment strategies, like Systematic Transfer Plan or Dynamic Fund Allocation. Let's look at all the options in detail available to the policy holder.
Six Fund Options Available to Policy Holder
| Fund Name | Money Market & Cash Instruments (%) | Govt. Securities (%) | Corporate Bonds (%) | Money Market & Cash Instruments (%) | Equity and Equity related securities (%) | Risk Rating |
|---|---|---|---|---|---|---|
| High Growth Fund | Open-Ended Multi-Cap Equity Fund with Mid-Cap Focus. | 0-30 | 0-30 | 0-30 | 70-100 | Very High |
| Growth Super Fund | Open-Ended Equity Fund with Large-Cap Focus. | 0-20 | 0-20 | 0-30 | 70-100 | High |
| Growth Fund | An Open -Ended Hybrid Fund with Large-Cap Focus. | 0-30 | 0-30 | 0-40 | 20-70 | High |
| Balanced Fund | An Open -Ended Hybrid Fund with Combination of Equity and Debt. | 20-50 | 20-40 | 0-40 | 10-40 | Medium |
| Conservative Fund | An Open -Ended Hybrid Fund with Debt Focus. | 50-80 | 0-50 | 0-40 | 0-15 | Low |
| Secure Fund | An Open -Ended Debt Fund | 50-100 | 0-50 | 0-40 | Nil | Low |
| Secure Plus Fund (Only for STP Plan) | An Open -Ended Debt Fund. | 60-100 | 0-40 | 0-40 | Nil | Low |
This plan helps to replicate the concept of Rupee Cost Averaging Method of Investment on annualised premium.
Under this option, the annualised premium received net of Premium Allocation Charge is first allocated to Secure Plus Fund. Also, on each subsequent month, Fund Value of [1/(13 - month number in the Policy Year)] Units available at the beginning of the month is switched to Growth Super Fund automatically.
The STP option is available to policies with Annual Premium Payment Mode only.
Under this option, during the initial stages of the policy term, the investments will be made to Equity Oriented Funds as the policy term progresses towards maturity, the fund allocation shifts to conservative funds.
In this investment, the asset under management is held in the Growth Super Fund and Secure Fund in a predefined proportion and the proportion changes depending upon the years left to maturity. Following is the chart, which shows the fund allocation to the two different funds.
For Regular Pay
| Years to Maturity | Funds Allocated to Secure Fund (%) | Funds Allocated to Secure Fund (%) |
|---|---|---|
| 16-25 | 80 | 20 |
| 11-15 | 60 | 40 |
| 6-10 | 40 | 60 |
| 0-5 | 20 | 80 |
For Five Pay
| Years to Maturity | Funds Allocated to Secure Fund (%) | Funds Allocated to Secure Fund (%) |
|---|---|---|
| 8-10 | 70 | 30 |
| 8-10 | 50 | 50 |
| 0-3 | 30 | 70 |
Now, we will look at the different charges levied under this plan.
Premium Allocation Charge
This is a charge levied upfront on the premium by the insurance provider for allocating your premium. Below is the allocation charge structure.
| Policy Year | Five Pay | Regular Pay |
|---|---|---|
| 1 | 5% | 5% |
| 2 | 4% | 4% |
| 3-5 | 3% | 3% |
| 6-10 | - | 3% |
| 11 and above | - | - |
Fund Management Charge
This is the charge levied on the value of assets and is adjusted to the net asset value of the fund. The annual fund management charges for different funds are as follows.
| Fund Name | Annual Charges on Fund Value in % |
|---|---|
| High Growth Fund | 1.25 |
| Growth Super Fund | 1.25 |
| Growth Super Fund | 1.25 |
| Balanced Fund | 1.10 |
| Conservative Fund | 0.90 |
| Secure Fund | 0.90 |
| Secure Plus Fund | 0.90 |
| Discontinuance Policy Fund ( in case of policy discontinuance within first five policy year) | 0.50 |
Policy Administration Charge
This is a charge levied at each monthly anniversary of the policy by cancelling proportionate units starting from the date of the start of the policy.
| Premium Payment Mode | Policy Administration Charge (%) |
|---|---|
| Annual Mode | 0.32% p.m., compounding at 5% p.a. after the fifth policy year to a maximum of Rs. 500 p.m. |
| Non-Annual Mode | 0.22% p.m., compounding at 5% p.a. after the fifth policy year to a maximum of Rs. 500 p.m. |
Mortality Charge
This is charged for providing risk cover to the policy holder during the policy term. On every monthly anniversary, from the date of commencement of the policy, a proportionate number of units will be cancelled from the unit account at the prevailing NAV to meet the mortality charge.
The charge is levied on the attained age of the policy holder for the sum at risk. The sum at risk is the total benefits provided to the nominee in case of the death of the policy holder, which is calculated at a discount rate of 6.5% p.a. A few sample rates are as under- Age 21 30 40 50 60 65 Mortality Charge (per Rs 1000 sum at risk) 0.92 1.06 1.80 4.95 11.53 17.01
The full list of mortality charge rate is available on the company’s website.
Surrender or Discontinuance Charge
The following charges will be levied on the Fund Value on discontinuance of policy or complete surrender, whichever is earlier, as per the following charge table.
| Policy Year | Policy Year Surrender/Discontinuance Charge |
|---|---|
| 1 | 6 % of Annualised Premium or 6 % of Fund Value or Rs. 6,000, whichever is lowest. |
| 2 | 4 % of Annualised Premium or 4 % of Fund Value or Rs. 5,000, whichever is lowest. |
| 3 | 3 % of Annualised Premium or 3 % of Fund Value or Rs. 4,000, whichever is lowest. |
| 4 | 2 % of Annualised Premium or 2 % of Fund Value or Rs. 2,000, whichever is lowest. |
| 5 and above | Nil |
The scheme offers flexibility to policy holders during the tenure of the policy to have the most from the policy investment.
Switch
The policy scheme allows switching between different fund options at any time during the policy term. The minimum switch amount is Rs. 5,000, and a maximum of twelve switches are allowed in a policy year, which are free of charge.
The policy holder has the option to redirect the future premium payable towards any given funds by submitting the written instructions to the insurer. You need to specify the percentage of premium that you want to allocate or redirect against each fund. In one policy year, a maximum of six premium redirections are allowed free of charge.
The policy scheme allows a maximum of two partial withdrawals in a policy year after the completion of the first five policy years, and no charges are levied.
The minimum partial withdrawal allowed per transaction is Rs. 5,000, and the maximum is 50% of the Fund Value in a policy year, subject to a condition. The Fund Value immediately after the date of partial withdrawal should be at least equal to one annualised premium. So, you can make two partial withdrawal in a policy year, but you to make sure it is less than or equal to 50%.
You may use the settlement option, at least 15 days prior to the expiry of the policy term. On application, the insurer will continue to manage the funds for a maximum of five years from the date of maturity and make periodic payments.
While opting for settlement, you will have to instruct the insurer on payout period (up to five years) and frequency of payouts (monthly, quarterly, semi-annually, and yearly).
Under this option, the insurer will divide the balance number of units in the funds in equal instalments for payouts. During the settlement period, the fund management charges will continue to be levied and will not be allowed for partial withdrawals or exercise the switch option.
In this period, the policy holder will bear all the investment-related risks, and in the case of death of the policy holder, the nominee will be only entitled to Fund Value, prevailing as on the date of intimation of death. You can also exit from the settlement option early, and request a complete payout at prevailing Fund Value.
To purchase the Shiksha Plus Super Scheme, the user needs to fill up the application form or proposal form, and submit it along with the medical examination report and other KYC documents.
If the policy holder commits suicide within the 12 months of purchase or reviving the policy plan, all the risks covered under the policy shall come to an end, and the policy will terminate.
In this case, the nominee will be paid only the Fund Value, as on the date of death of the policy holder.
Max Life Shiksha Plus Super is a comprehensive insurance policy for securing your child's future, offering multiple benefits and flexibility to its policy holders. The scheme ensures your child's future is protected in your absence through continued financial support at the time of distress as well as during the planned requirement. Following are some of the Pros and Cons of the scheme.
Pros
Cons
Does the plan have an upper limit of maximum annualised premium?
No, there is no upper limit on the annualised premium, neither on the Five Pay variant nor on the Regular pay variant.
Does Shiksha plus Super plan provide loan facility?
No, policy holders cannot raise a loan using the policy documents or by giving it as collateral to the bank.
Are there any Riders or Top-up plans offered in this scheme?
No, there are no Riders or Top-up options available in this plan.
Will my sum payable at maturity get reduced due to partial withdrawal?
No, your sum payable at maturity will be equal to the fund value on the date of maturity.
I have missed the premium payment within the due date, will my policy get terminated?
No, your policy will not get terminated. You can pay your premium within the grace period of 30 days in case of annual mode and 15 days in case of non-annual mode from the due date of first unpaid premium. Your risk cover will continue, and charges in the policy will continue to apply.
Further, if you miss the due date, you can revive your policy within two years from the date of discontinuance.
What value will I receive if I surrender the policy within five years (lock-in period) of the effective date of policy?
In this case, the insurer will credit the Fund Value to the Discontinued Policy Fund after deducting applicable Surrender or Discontinuance Charges.
After the expiry of five years term from the start of the policy or after the lock-in period ends, the insurer will close the Discontinued Policy Fund, and give you the value of the fund.
All benefits under the plan will stop, and no further charges will be levied by the insurer except for Fund Management Charge on Discontinuance Policy Fund, i.e. 0.5% p.a.
You will be entitled to a guaranteed return of 4% p.a., as mandated by IRDAI.
Will I get Guaranteed Loyalty Additions after the revival of the policy tenure?
Yes, you will be credited with loyalty additions for previous years in case of revival of the policy, based on the Fund Value prevailing at the revival date.
Is the investment returns guaranteed under Shiksha Plus Super?
The minimum sum assured on death from the scheme is ten times of the annualised premium. As Shiksha Plus Super is a ULIP, which invests in market-related securities, the maturity benefits are not guaranteed. The performance of the scheme depends on the fund option chosen.
Am I entitled for a full refund during the free-look period?
Yes, you will be refunded the premium amount less mortality charges for the period covered, expenses incurred on medical examination (if any), and stamp duty.
How should I make a claim on the policy?
For making a claim request, you need to reach out to your nearest Max Life Insurance branch office, with the following documents:
You can also reach them using the following methods:
Under what circumstances does the policy cease to exist or will be terminated by the insurer?
The policy can be terminated under four circumstances:
