20140131 shiksha plus super fa qs

For internal training only

FREQUENTLY ASKED QUESTIONS – Shiksha Plus Super

Shiksha Plus Super Frequently Asked Questions Version 1.0

©Max Life Insurance For internal training only Page 2 of 9

Table of Contents

Contents

Basic Features ....................................................................................................................................... 3

Product Benefits .................................................................................................................................... 4

Policy Discontinuance ........................................................................................................................... 6

Charges .................................................................................................................................................. 8

Operations ............................................................................................................................................. 9



Basic Features

1. What is Shiksha Plus Super?

It is a unit linked insurance plan.

2. Does Shiksha Plus Super plan have variants?

Yes. Shiksha Plus Super has two variants –5 Pay and Regular Pay.

3. What is the age at entry and maturity?

The minimum entry age for this plan is 21 years and maximum entry age is 50 years.

Maximum Maturity Age for 5 Pay variant is 60 years.

Maximum Maturity Age for Regular Pay variant is 65 years.

4. What are the premium modes available with Shiksha Plus Super?

Annual, Semi-Annual, Quarterly & Monthly modes are available under this plan.

5. What are the Policy terms available?

The policy terms available under this plan are 10 years or option to pick a term between 15 to 25

years.

6. What are the minimum and maximum premiums allowed?

For 5 Pay variant, minimum annualised premium allowed is Rs. 50,000 for all modes.

For Regular Pay (15 to 25 year policy term) variant, minimum annualised premium allowed is Rs.

25,000 for annual mode and Rs. 48,000 for non-annual modes.

7. What cover multiples are allowed with the plan?

The cover multiple is as below:

Variant Cover Multiple Allowed

5 Pay 10 times Annualised premium

Regular Pay 10 times Annualised premium

8. What are the investment / fund options available with the plan?

The following funds are available under the plan

Growth Super Fund

Growth Fund

Balanced Fund

Conservative Fund

Secure Fund

The customer can also opt for either of the following investment strategies:

a) Dynamic Fund Allocation

b) Systematic Transfer Plan



Product Benefits

9. What is the death benefit?

On death of the Life Insured (who is same as Policyholder) the nominee/beneficiary will receive the

following:

a) Lumpsum Benefit - Higher of the {Sum Assured or (0.5 X Policy Term X Annualised

Premium) or 105% of total premiums paid till death} shall be payable immediately on the

date of death

b) Family Income Benefit - An amount equal to 10% of Sum Assured shall be payable on

each Policy Anniversary following or coinciding with the date of death of the Life Insured till

the end of Policy Term subject to a maximum of 10 such instalments. However, minimum of

3 such instalments are guaranteed to be paid under all circumstances in case of death

anytime during the Policy Term. Please further note in case of death of Life Insured with less

than three Policy anniversary left till the end of Policy Term, any excess instalments to meet

the minimum requirement of three instalments shall be payable on the maturity date.

For example – For a policy with Policy Term of 10 years, if the policyholder dies in 9th policy

year, then 1 instalment equal to 10% of Sum Assured will be paid on 9th Policy Anniversary

and remaining 2 instalments (each equal to 10% of Sum Assured) will be paid on the date of

maturity of the plan

c) Funding of Premium - Under this Benefit, the Company will fund all outstanding premiums

payable under the Policy and the Fund Value will be paid on maturity. The Policy will continue

even after the death of the Life Insured till the end of the Policy Term. All the benefits under

the Policy shall be payable to the beneficiary

10. Which riders are available with Shiksha Plus Super?

No riders are available with Shiksha Plus Super

11. What is the Maturity Benefit?

On maturity the policyholder will receive an amount equal to the Fund Value.

12. Are switches/redirections allowed under the plan?

Yes. Maximum of twelve (12) Switches are allowed in a Policy Year and all are free of charge. A

maximum of six (6) Premium Redirections are allowed in a Policy Year and all are free of charge.

13. Is partial withdrawal allowed under the plan?

Yes.

No Partial Withdrawals are allowed in the first five policy years and thereafter a maximum of two (2)

Partial Withdrawals are allowed in a policy year. There is no charge on Partial Withdrawals. The

minimum amount of Partial Withdrawal allowed per transaction is ` 5,000. In a policy year, the

maximum amount that can be partially withdrawn is 50% of the Fund Value as on the date of partial

withdrawal, subject to the Fund Value immediately after Partial Withdrawal being at least equal to 1

(One) Annualised Premium i.e. the customer may make two partial withdrawals in a policy year such

that the summation of percentage of Fund Value withdrawn, is less than or equal to 50%.

E.g.: A Policyholder makes first partial withdrawal in a policy year of 20% of Fund Value. He may

make a second partial withdrawal up to a maximum of 50%-20%= 30% of Fund Value, subject to the

above conditions.

14. Are there loyalty additions?



Loyalty additions are activated starting end of 11th policy year. An amount equal to 0.20% of fund

value shall be added to the fund at the beginning of every policy year, starting 11th policy year. The

loyalty additions increase @ 0.02% absolute every year. The additional units shall be created in

different Fund(s) in proportion of Fund Value at the time of credit. These loyalty additions shall be

subject to the following:

- Loyalty additions will be payable only on premium paying policies.

- In case of revival of policies, the loyalty additions for previous years will be paid based on the Fund

Value prevailing at the revival date.

It should be noted that the loyalty additions are only payable in case of Regular Pay variant. Loyalty

additions help loyal customers build a larger corpus.

15. What is Dynamic Fund Allocation?

Dynamic Fund Allocation option is an investment strategy which in early part of the Policy Term

invests in equity oriented funds and as Policy Term progresses it shifts the fund allocation towards

more conservative funds. The broad principle is to lock in the gains from the equity markets into non

volatile assets. This is done automatically without having to keep a track of the funds. Thus Dynamic

Fund Allocation feature helps balance growth and risk potential of equity markets

Regular Pay

Number of years to

Maturity

% Allocation to Growth Super

Fund % Allocation to Secure Fund

16 - 25 years 80% 20%

11 – 15 years 60% 40%

6 – 10 years 40% 60%

0 – 5 years 20% 80%

5 Pay

Number of years to

Maturity

% Allocation to Growth Super

Fund % Allocation to Secure Fund

8 - 10 years 70% 30%

4 - 7 years 50% 50%

0 - 3 years 30% 70%

16. What is Systematic Transfer Plan?

Under Systematic Transfer Plan the Annualised premium is first put in a safe non volatile fund (Secure

Plus Fund) and every month an equal number of units are released into equity oriented fund (Growth

Super Fund) such that by end of each policy year the entire premium is invested fully into equities.

Systematic Transfer Plan helps to replicate a rupee cost averaging method on the Annualised

premium.

17. Can the customer add top-ups?

No.

18. What if the customer does not need the money at maturity?

The customer can use the Settlement Option, by intimating Us in writing at least 15 days prior to the Maturity Date, to let their funds remain invested in the market for a maximum period up to 5 years.



During this time a fixed number of Units from the customer’s Fund(s) will be liquidated to and paid at

an agreed frequency (monthly/quarterly/semi-annual/annual). During the settlement period the Life

Insured will have no insurance cover (death benefit) and only Fund Management Charge will be applicable.

Policy Discontinuance

19. What is the surrender clause in Shiksha Plus Super Plan?

At any time during the policy term, the policyholder has the right to surrender the policy

Surrender within lock-in period (first five years of the date of inception of the policy)

In case the customer surrenders the policy within the Lock-in-Period, the Company will credit the

Fund Value by creation of units into the Discontinuance Policy Fund after deducting applicable

Surrender / Discontinuance Charges. At the expiry of five years from the effective date of the Policy

(i.e. at the expiry of the Lock-in Period), the Company will close the Unit Account and pay the value

of units in the Discontinuance Policy Fund as at that date. From the Date of Discontinuance, the risk

cover under the policy will stop and no further charges will be levied by the Company other than the

Fund Management Charge applicable on the Discontinuance Policy Fund, i.e. 0.5% p.a. currently. In

case the Life Insured dies anytime after the Date of Discontinuance, the Company shall pay the Fund

Value as on the date of death of the Life Insured.

Surrender after five years of the date of inception of the Policy

The Company shall close the Unit Account and pay the Fund Value of the Units in the Segregated

Fund(s) on the date of receipt of surrender request and the Policy shall terminate thereafter.

20. What will happen if the customer fails to pay the premium on the due date?

The customer will be given a grace period of 30 days in case he fails to pay the premium on the due

date.

21. Does the life cover continue during the grace period?

Yes, the life cover continues during the grace period.

22. What will happen if the customer does not pay the premium within the grace period?

The company will send a notice to the customer within 15 days of the end of the grace period. The

notice period will start from the date of receipt of this notice. The notice period is of 30 days.

23. Does the life cover continue during the notice period?

Yes the life cover continues during the notice period.

24. What are the options made available to the customer through the notice?

During the first 5 policy years:

a. Complete withdrawal from the policy without any risk cover, the policy will be deemed

surrendered in case the customer opts for this option

b. Revive the policy within a period of two years from the Date of Discontinuance of the

policy.

After the first 5 policy years



a. Complete withdrawal from the policy without any risk cover, the policy will be deemed

surrendered in case the customer opts for this option

b. Opt for revival of the policy within a period of two years from the Date of Discontinuance

of the policy.

c. Convert the policy into a paid up policy

25. What is revival period?

The revival period is a period of two years starting from the date of discontinuance during which the

policyholder can revive the policy.

26. Does the life cover continue during the revival period?

During the first 5 policy years: No

After the first 5 policy years: Yes

27. What will happen if the customer wants revive the policy during the revival period?

The customer can revive the policy in the revival period by doing the following:

i) Give a written request to revive the policy

ii) Produce evidence of insurability at their own cost

iii) Pay all the due premiums

28. How does a paid up policy work?

The policy will continue without any further premiums payable till the end of Policy Term and all

applicable charges, i.e. Policy Administration Charge, Mortality Charge and Fund Management

Charge will continue to be levied.

In this case, the Sum Assured under the policy will be reduced by the proportion of total

premiums paid to the total premiums payable as per the terms and conditions of the policy. This

reduced Sum Assured will be called the ‘Paid-up Sum Assured’. Guaranteed loyalty additions will

not be added to the Fund(s) once the policy is Paid-up.

The customer will have the option to revive the paid up policy within a period of two years from

the Date of Discontinuance The revival of the policy will, however, be subject to following

conditions:

- The Policyholder giving the Company a written request to revive the policy; and

- The Life Insured producing evidence of insurability at their own cost acceptable to the Company

as per the Board approved underwriting policy of the Company; and

- The customer paying the Company all overdue contractual premiums.

29. Are there any exclusions in the policy

In case of death of Life Insured by suicide within 12 months from the Effective Date of the policy

or from the Date of Revival, the policy will terminate and the Fund Value, as on the date of the

death, shall be paid by the Company.



Charges

30. What is the premium allocation charge for Shiksha Plus Super?

The premium allocation charge for Shiksha Plus Super is as below

Policy Year 5 Pay Regular Pay

1 5% 5%

2 4% 4%

3-5 3% 3%

6-10 Not Applicable 3%

11-20 Not Applicable 0%

31. What are the fund management charges?

The fund management charges are as below:

Name of Fund Charge (per annum) as %

of Fund Value

Growth Super Fund 1.25%

Growth Fund 1.25%

Balanced Fund 1.10%

Conservative Fund 0.90%

Secure Fund 0.90%

Secure Plus Fund (- only available with STP ) 0.90%

Discontinuance Policy Fund (only in case of

surrender or discontinuance with first 5 policy

years)

0.50%

32. What is the administration charge under the Shiksha Plus Super plan?

Policy Administration Charge (% of Annualised/ Single Premium)

Premium Payment

Term

Policy Administration Charge (% of Annualised/

Single Premium)

Annual mode 0.32% p.m. compounding at 5% p.a. from 6th year onwards

up to a maximum of ` 500 per month

Annual mode 0.22% p.m. compounding at 5% p.a. from 6th year onwards

up to a maximum of ` 500 per month

33. What are the surrender/discontinuance charges under the plan?

This charge shall be levied on the Fund Value at the time of Discontinuance of Policy or effecting

Complete Withdrawal (Surrender) whichever is earlier, as per the following table.

For 5 Pay and Regular Pay

Policy Year Surrender Charge

1 Lower of 6% of Annualised Premium or 6% of Fund Value or ` 6,000




5 & Above Nil



Operations

34. Which Proposal form to be used?

New ULIP proposal form is to be used for purchasing the plan. On the top left corner of the Proposal

Form is the stamp that reads ‘New’.

35. If customer complains that intimation has not been received about the notice period or revival

period what would the company do on the subsequent termination of the policy?

The company will ensure that the intimation notice is sent to the customers through various means

like letters, sms and emails. Also, it is mandatory for the customer to provide at least one phone

number. Hence, it is highly unlikely that the customer will not receive any communication for non-

payment of premiums.

36. What are Discontinuance charges? Is it similar to surrender charges?

Yes, discontinuance charges are the same as surrender charges.

37. Does the customer have to give the surrender request for surrender value to move to

Discontinued Policy Fund in case of lapse before completion of 5 policy years?

The Surrender Value will automatically move to the Discontinued Policy Fund if the policy is not

revived within the revival period. The surrender notice from the customer is not mandatory.

Economy & Finance

20140131 shiksha plus super fa qs