Aviva LifeBond Advantage

Overview

A non-participating unit linked savings oriented plan offering life insurance coverage and options to invest in different funds with various risk-return scenarios. Along with the life cover provided by the plan, multiple fund options under this policy can steadily add to the growth of investment. This plan has a single premium payment option and is meant for people who wish to build a corpus through investing their savings in various funds or want to secure the financial future of their children. The plan comes with an in-built Accidental Death Benefit (ADB) option that further increases the risk cover.

Eligibility Conditions for Aviva LifeBond Advantage Plan

The eligibility conditions for availing this policy can be depicted in the table mentioned below -

Parameter

Minimum

Maximum

Policy Term

10

73

Entry Age

2 years

65 years

Maturity Age

18 years

75 years

Key Features of Aviva LifeBond Advantage Plan

This plan meant for wealth creation has the following salient features -

Parameters

Details

   

Plan Type

Unit-linked insurance plan

   

Basis

Individual policy

   

Policy Term

10 years to 73 years

   

Policy Validity

Will be for the chosen policy term subject to non-surrender

   

Basic Sum Assured

1.25 times the Single Premium Paid

   

Associated ADB Sum Assured

Will be equal to the Basic Sum Assured subject to a maximum of INR 50 lakhs

   

Top up Sum Assured (TSA)

1.25 times the top-up premium

   

Coverage

Maturity Benefit = Fund value of all units in the main account and top-up accounts less withdrawals made (if any)

   
 

Death Benefit = Greater of the Base Sum Assured or fund value as per the single premium paid or 105% of the single premium + Greater of top-up sum assured or fund value as per top-up premiums or 105% of top-up premiums paid

   
       
 

Surrender Benefit

Before completion of 5 years

After completion of 5 years

   

Fund value minus discontinuation charges (if applicable) moved to Discontinued Policy Fund and paid out with accrued interest after 5 years’ completion

Fund value paid out immediately

Free look Period

30 days in case of online purchase. 15 days otherwise

   

Grace Period and Notice Period

Not applicable, since this is a single premium plan

   

Partial Withdrawals

Allowed after a period of 5 policy years, provided the following terms are met -

  • The withdrawal amount is INR 5,000 or more (subject to remaining fund value being more than INR 15,000)

  • The insured must be of 18 years or more

  • Total number of partial withdrawals per year will be exclusively limited to 4

   

Fund Choice Selection

Is allowed through -

  • Switching - Moving accumulated funds from one fund to another

  • Premium Redirection - Changing the premium allocation into a different set of funds

   

Settlement Option

Allows the Maturity Benefit to be availed in one of two available options -

  • Instalments over a period of 5 years post maturity in frequencies of monthly to yearly pay outs

  • Entire maturity amount as a lump sum

   

Nomination and Assignment

Nomination and assignment facility available but only one can be chosen at a time

   

Reinstatement or revival

Policy has a single premium payment, thus surrender or complete withdrawal ends the policy

   

Benefits and Advantages of Aviva LifeBond Advantage Plan

This plan from Aviva Life Insurance utilizes different investment funds to aid in the growth of wealth and can be opted for by anyone aiming to achieve greater returns on long term savings. Life insurance provided by this policy and the inbuilt accidental death benefit throughout the policy term are added benefits. The key advantages in opting for this plan can be mentioned in the following points -

  1. Life cover is present throughout the policy term
  2. Flexible long term policy tenures for an investment portfolio with variable risk and returns
  3. Applicable tax benefits can be availed as per Section 80C and 10(10D) of the Income Tax Act
  4. Policy can be withdrawn at any time
  5. Multiple fund options and unlimited switches to and from different fund options

The key benefits under this policy can be explained as below -

  1. Maturity Benefit - Paid once the policy reaches the maturity age, after the completion of the policy term, this amount can be paid to the policyholder or nominee. This amount includes the fund value of all the balance units in the main account and top-up account (if any)
  2. Death Benefit - In case of the death of the insured life, Death Benefit will be payable to the nominee. This will be less the partial withdrawals made by the policyholder. This sum includes the higher of every sum assured, all the fund value and 105% of all premiums
  3. Surrender Benefit - Policy has a lock-in period of 5 years. If surrendered within the lock-in period, funds move to Discontinuance Policy Fund and get paid after 5 years are complete. In case surrender is done after 5 years, fund value is paid out immediately
  4. Tax Benefit - Benefits are dependent on the prevailing tax laws

Investment of Funds under Aviva LifeBond Advantage Policy

This unit-linked plan from Aviva Life Insurance comes with seven active fund options that offer a variable mix of risk and return. The premiums paid could be used over all of the fund options, a specific few as chosen by the policyholder or even in a single one.

The details about the available funds have been mentioned in the table below -

Fund Name

Details

Asset Categories

   

Risk and Return Rating

   

Equity

Debt

Money Market

 
   

Fund Ratios

     

Protector Fund II

Generates steady returns and minimum exposure to equities

0-20%

25-100%

0-40%

Moderately Low

Bond Fund II

Steady income through investment in quality fixed income securities

0%

60-100%

0-40%

Very Low

Balanced Fund II

Balance of growth of capital and steady returns

0-45%

25-100%

0-40%

Moderately Low

Growth Fund II

Long term capital growth through high equity exposure

30-85%

0-50%

0-40%

Moderately High

PSU Fund

Steady returns through investment in PSU and similar equities

60-100%

0-40%

0-40%

Very High

Infrastructure Fund

Steady returns by investment in infrastructure and similar equities

60-100%

0-40%

0-40%

Very High

Enhancer Fund II

High equity exposure for aggressive long term capital growth

60-100%

0-40%

0-40%

Very High

Charges in Aviva LifeBond Advantage Policy

Being an insurance plan that relies on various funds to generate wealth on the investment made, the policy entails charges on quite a few aspects of itself. The applicable charges on this policy are as follows -

Charge

Particulars

Premium Allocation Charge

Premium ranges - INR 50,000-99,000 – 4%, INR 1,00,000-4,99,999 – 3%, INR 5,00,000 and above – 2%. For top-up premiums, it is 2%. All rates are per annum

Fund Management Charge

1.35% per annum of fund value, chargeable daily for all seven active funds and 0.50% per annum for Discontinued Policy Fund

Policy Administration Charge

Subject to INR 40 per month through cancellation of units

Mortality Charge

Dependent on policyholder’s age and level of cover

Miscellaneous Charges

N/A

Partial Withdrawal Charges

N/A

Switching Charges

0.5% of the amount being switched, subject to a maximum of INR 500 and minimum of INR 25 per request, post the first free 12 switches in a year

Premium Redirection

N/A

Premium Payment for Aviva LifeBond Advantage Policy

The details of premium payment for this plan can be summarised in the table below -

Premium Parameter

Details

Premiums

Single Premium for Main Account – Minimum of INR 50,000 and no maximum limit. Top-up premiums – Minimum of INR 5000 and maximum up to the amount of single premium

Premium Paying Term (PPT)

Once

Premium Paying Frequency

Once

Premium Paying Modes

ECS, debit cards, credit cards, cheques and other acceptable modes

Premium Discontinuation Scenario

In case a policyholder opts for a complete withdrawal within the first five years of the policy initiation, the fund value (as on the date of policy discontinuance) minus the discontinuance charge (depends on the insurer) will be shifted into a Discontinued Policy Fund and the interest rate applicable on this fund is 4% per annum as of October 2015. This fund shall attract an FMC of 0.50% per annum. If this scenario happens within the first five policy years, the funds shall be paid out at the end of the lock-in period of five years. If the discontinuance or complete withdrawal happens after 5 policy years, one can withdraw the fund value as on the particular date. Risk cover ceases immediately upon opting for complete withdrawal.

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