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With the Insurance Regulatory and Development Authority (Irda) setting a deadline of September 1 for life insurers to comply with the new charge structure prescribed for unit-linked insurance products (Ulips), the insurance space is passing through a quiet period at the moment. Some insurers are using this opportunity to expand their non-Ulip product portfolio, Max New York Life Insurance being the latest among them.

The company has just launched Max New York Platinum Protect, a pure term life plan, primarily aimed at high net worth individuals (HNIs) - the minimum sum assured is Rs 25 lakh, and there is no limit on the cover you wish to obtain. Other life insurers such as ICICI Prudential Life, Kotak Life and Birla Sun Life offer similar products, which are targeted at individuals who boast of an affluent lifestyle, make efforts to maintain good health and have access to quality healthcare. While term rates in general have seen a decline over the years owing to better mortality experience, the HNI category has reaped the maximum benefits. Such individuals are considered eligible for a high value cover at a significantly lower premium, as the probability of death due to natural causes is assumed to be low.

Features

While the cover is extended to smokers as well as non-smokers, the former stands to gain in the form of further discount on premium payment. An individual who has not indulged in tobacco consumption in the last three years is deemed a non-smoker in this context. It gets even better if you are classified as a preferred non-smoker - someone who has not consumed tobacco in the last three years and follows a healthier lifestyle (determined on the basis of the specified medical examinations). For instance, under the company's existing term plan, the annual premium for a 30-year-old male opting for a Rs 50-lakh cover and a 20-year term works out to Rs 13,550; on the other hand, with all parameters remaining the same, a preferred non-smoker will have to pay merely Rs 7,250 under Platinum Protect.

In addition, this scheme comes with a Reduced Insurance Cover feature. Here, if the policyholder has paid premiums for a minimum of 15 consecutive policy years and discontinues the payment thereafter, the policy will continue with a reduced insurance cover, which is calculated as per the formula arrived at by the company. Simply put, keeping the parameters mentioned above in mind and assuming that the insured stops paying premium from the 16th policy year onwards, he will be eligible for a cover worth 50% of the sum assured thereafter till the end of the original term. However, he will not be entitled to any rider benefits then.

Rider benefits

The policyholder has the option of enhancing the scope of the cover by availing two riders - Personal Accident and Dread Disease benefits. The latter covers ten critical illnesses, including cancer, kidney failure, stroke, major organ transplant and coronary artery bypass surgery.

Stringent underwriting process

While the product brochure or your life insurance agent is unlikely to highlight this fact, it is only natural that the company would want to make sure that only those who maintain highest standards of health get this cover. This could mean several medical tests and rejection of your proposal if you fail to meet the criteria set.

Source : The Economic Times