Tata AIA Life launches a new term insurance plan 'Maha RakshaSupreme'

MUMBAI: Tata-AIA Life (formerly, Tata-AIG) has recently launched a new term insurance product - Maha RakshaSupreme. With a minimum sum assured of Rs 50 lakh, this pure protection policy falls in the 'high-end' term plan category.

Most life insurers today offer such products to attract well-heeled individuals who can afford quality healthcare facilities. They have to pay lower premiums compared to regular term plan holders as the probability of death due to natural causes is perceived to be low. In addition, non-smokers and women are offered additional discounts in premiums.

The Maha Raksha plan offers two cover options - pure protection cover and extra protection cover. While the former is a simple term cover that hands out the basic sum assured to the nominee upon the insured's death, the latter comes with waiver of premium feature. That is, if the insured suffers from a total permanent disability during the policy tenure, s/he will be exempted from paying future premiums, but the cover will continue.

This apart, it offers policyholders the option of increasing their sum assured later in life. They can also choose from several riders like accidental death, critical illness, surgical benefit and so on.

Another key feature is the inbuilt payout accelerator benefit, which promises to pay out 50% of basic sum assured if the insured is diagnosed with a terminal illness. The balance is payable to the nominee after the policyholder's death.

Upside: Like other high-value term plans, this product, too, offers life cover at an economical rate. The extra protection cover option is an added benefit as it ensures that the policy remains in force even if the insured is unable to pay premiums due to a permanent disability.

Downside: Such plans typically prescribe stringent underwriting norms, which means obtaining the cover may not be easy. Also, since the minimum cover under the plan is Rs 50 lakh, it will primarily suit the needs of those with higher pay packages and healthier lifestyles.