Aviva's Dhan Samruddhi: Meant for the risk-averse

MUMBAI: Aviva Life Insurance has recently announced the launch of Aviva Dhan Samruddhi, a traditional money-back policy that offers guaranteed returns.

The product promises a guaranteed addition of 7-9% of the annual premium till the end of policy tenure as chosen by the insured. It can be either 10, 15 or 20 years. The premium payment term is fixed at 10 years irrespective of the policy tenure. The policy also offers a survival benefit of 125% of the annual premium every five years. At maturity, the policyholder will receive the sum assured along with guaranteed additions.

The minimum entry age is 13 years, with the upper limit being 55 years. The policyholder's age at maturity cannot exceed 70 years. The minimum annual premium and sum assured under the plan are Rs 6,464 and Rs 1 lakh respectively.

Upside: If you are a risk-averse individual, this product's guaranteed return feature will appeal to you. Also, 'payback' of 125% of annual premium at five-year intervals will take care of your liquidity needs in the interim.

Downside: The key drawback of any traditional plan is its opaque charge structure. The distribution of your premium among agents' commission and the amount actually invested is not disclosed, unlike the more transparent unit-linked insurance plans or mutual funds.