With the investment horizon expanding so far the options available to all the investors keeps increasing each day. Unit Linked Insurance Plan which is one of the safest investment options have several offerings from big players of this insurance industry. Aviva Life Insurance Company Limited also has several options. In the article below we try to review the Aviva Freedom Life Advantage Plan which is available for all the investors seeking an ULIP option that has good returns to offer.
This particular plan launched by Aviva has states its objective as the plan which aims at providing financial protection to family and provides them great return for their investments. This ULIP option not only provides the option of a flexible insurance cover but also has the most comprehensive rider coverage and the joint option as per the same policy. Another advantage which comes along with this ULIP option is providing loyalty bonuses to the investor at the end of every 3rd year from 10th year onwards till the maturity of the ULIP. The plan also comes integrated with the accidental death cover.
What are the requirements to buy the Freedom Life Advantage Plan?
In order to apply for the Aviva Freedom Life Advantage plan individuals need to be of a minimum of 2 years of age and is open for application for people up till the age of 60 years. The policy term could be anywhere between 15 to 30 years. For example a person who is 50 years of age will have a policy term of 25 years as the plan maturity age cannot exceed 75 years.
What is the benefit one gets from this particular ULIP option?
There are three benefits that the ULIP option has on offer. They are:
- Tax Benefits: U/s 80C, 10 (10D) of the Income Tax Act, 1961 the investors can claim deductions for their investments as applicable.
- Death Benefit: In case the policyholder dies within the policy term then the nominee is entitled to receive higher of the sum assured or the actual fund value. After the payment is made to the nominee the policy gets terminated. It comes with an inbuilt accidental rider. At the time if the policyholder dies due to an accident there is further insurance cover which is payable to the nominee.
- Maturity Benefit: The policyholder gets the fund value on maturity.
What are the charges applicable to buy Aviva Freedom Life Advantage ULIP?
Overall there are 4 charges which are applicable when the ULIP is applied for. It is besides the charges for the optional riders. The charges are:
Premium Allocation Charges: The following table shows the charges which come as the Premium application charges:
Policy Year | Allocation Rate | |
Annual Premium <1 lac | Annual Premium>=1 lac | |
1st year | 94% | 94% |
2-5 years | 96% | 96% |
6th year onwards | 98% | 100% |
Fund Management Charge (FMC): It is the charge which is levied as a percentage to the fund value. It basically is charged as the fees to manage the funds for the policyholder. The charges have been fixed at 1.35%p.a. which is applicable to all the funds under this ULIP.
Policy Administration Charge: It is the monthly deduction that starts from the 1st month and has been fixed at 0.1% of the annual premium paid which is subject to Rs.400 per policy. It is deducted through cancellation of the units if the value.
Mortality Charge: It is the charge which is deducted as the part of life cover which is also recovered through cancellation of the units. Mortality Charge usually depends on the risk cover that is taken along with the factors such as the age, gender, and the health conditions.
Concluding Remarks
The Aviva Life Freedom Advantage is one such rare plan that offers the option of joint policy. The plan comes with inbuilt accidental rider as well as bonuses that add to the entire fund value. The policy is also flexible when it comes to changing the insurance cover.
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