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*The Author is a Financial Advisor and can be reached at
raughs@gmail.com

AEGON Religare Invest Maximiser Plan aims to maximise your investment with the low premium allocation charges. AEGON Religare Invest maximiser not only maximizes investment but also provides you necessary protection.

Key Features

Invest Maximiser has a very low Premium Allocation charges among the ULIP options available. A percentage of the premium appropriated towards charges from the premium received. The Premium allocation charge is only 5% for the first year and it is only 2% from second to fourth year. Fifth year onwards it is zero.

Benefits

Special Units – The special units are added to your account at the end of 10th year and every 3rd year thereafter. The value of special units would be equal to 1.50% of the average month end fund values of the last 36 months before the allotment of special units.

Maturity - On maturity, you receive the fund value existing on maturity date. If you do not wish to take the entire maturity amount at one go, you can avail of the Settlement Option.

Settlement Option - Under this option, you receive your maturity proceeds in installments over a period you choose (not exceeding 5 years). Investment risk during the settlement period will be borne by you.

Death - In case of your unfortunate demise during the policy term, the nominee will receive the Sum Assured or the Fund Value, whichever is higher and the contract will be terminated.

Surrender – You can surrender the policy any time after the first 3 policy years. There is no surrender charge after 4 policy years.

Features

Premium Re-direction – This feature allows you to alter the premium allocation to be applied to your future premiums, including top-ups.

Increase in premium- As you move up the ladder in your professional life, your affordability increases. In such cases, you may want to increase your premium. AEGON Religare Invest Maximiser Plan allows you to increase your premium subject to certain conditions.

Top-Up Premium – A Top-Up premium is an additional amount of premium over and above the contractual basic premiums with a minimum amount of Rs. 5,000.

Switch – This feature helps you shift your investment from one fund to another. Twelve switches are free in each policy year. All you need to do is provide us with the amount or percentage of the fund you want to switch.

Premium Allocation Charges (PAC)

This is the percentage of premium deducted towards charges from the premium received. In short the premium amount that is invested is net of this premium allocation charge (PAC).
For example if the premium paid is Rs 50,000 and the PAC is 20% in the first year, then Rs 10,000 will be deducted as PAC and the remaining Rs 40,000 will be invested on behalf of the customer. The PAC is high in the first year and varies from insurance company to company. In case of some insurance companies the PAC charge varies from as low as 10% to more than 50% of the premium paid in the first year and gradually reduces from the second year onwards.

In case of Aegon Religare Invest Maximiser Plan the PAC for the first year is 5%. For the 2nd, 3rd and 4th year the PAC is 2% and from the 5th year onwards the PAC is Nil. So the PAC in this plan is less than similar plans available in the market. So in terms of PAC this plan definitely scores over its competitors in the ULIP category. Also in case of lot of plans the PAC is charged for all the years whereas in this plan it is charged only for the first 4 years.

Fund Management Charge (FMC)

This charge is levied as a percentage of the value of assets. For the enhanced equity fund in this plan, the FMC is 1.25% per annum, which is very much similar to unit linked plans of other companies in the market.

However the company brochure mentions the company can increase the FMC after taking approval from Insurance Regulatory Development Authority (IRDA). But the company also mentions that this charge shall in no case exceed 2% per annum at any point of time.

Policy Administration Charge

This charge is levied at the beginning of each policy month from the policy fund value by cancelling units worth the amount to be charged. For example if the policy administration charge for a particular month is Rs 44 and the NAV of the unit is Rs 11 at that point of time, then at the beginning of the month the policyholder’s 4 units will be cancelled and the policyholder’s total units will get reduced by 4 units.

In this plan the policy administration charge is Rs 40 per month for the calendar years 2009 and 2010. Thereafter from 1st January 2011 the policy administration charge will increase by 5% compounded every year.

The above charges are calculated taking into consideration 5% compounded increase from Jan 2011 onwards.

Mortality Charge

This charge is levied at the beginning of each policy month by cancelling units worth the amount to be charged. This charge is levied against the life cover (sum assured) provided by the insurance company. This charge depends on the age of the life insured. Once the fund valued exceeds the sum assured amount, the insurance company is not exposed to risk of life cover. In this case the fund value is paid if death happens as the fund value is more than the sum assured. This charge is levied by other insurance companies also in their ULIPs.

Miscellaneous Charges

Apart from the above charges, there are switching charges, premium redirection charges and partial withdrawal charges. These charges are levied after the customer avails the service above the maximum free threshold. These charges are levied by other insurance companies also in their ULIPs.

Surrender Charges

In this plan the customer can surrender the policy anytime after the first 3 policy years. There is no surrender charge after 4 policy years.

In this plan there are no surrender charges after 4 years.

Other Features

This plan also allows the investor to increase the premium subject to certain conditions.

The life insured can also avail riders like Accidental Death Benefit Rider, Accidental Dismemberment Rider and Permanent Total Disability Rider.

The policy also offers special units which are added to the account at the end of 10th year and every 3rd year thereafter. The value of special units would be equal to 1.50% of the average month end fund values of the last 36 months before the allotment of special units. These units are also known as bonus units or loyalty units or persistency units.

The tenure of this policy is for 25 years, but the customer can exit the plan anytime after 4 years and take the entire fund value without any deductions as the surrender charges don’t apply after 4 years.

*The Author is a Financial Advisor and can be reached at
raughs@gmail.com