Bajaj Allianz Retire Rich A Unit-Linked Pension Plan. Frequently Asked Questions. FAQs ( ) Ver.1

Transcription

1 Frequently Asked Questions

2 Ques 1. Ques 2. Ques 3. Ques 4. Ques 5. Ques 6. Ques 7. What type of product is Bajaj Allianz Retire Rich? Bajaj Allianz Retire Rich is a Non-Participating, Individual, Unit-Linked, Deferred Pension Plan. What is the minimum and maximum entry age in this plan? The minimum age at entry is 30 years and the maximum age at entry is 73 years. What is the minimum and maximum vesting age in this plan? The minimum vesting age is 37 years and the maximum vesting age is 80 years. What are the minimum and maximum policy terms in this plan? The minimum policy term is 7 years and the maximum is 30 years. What are the premium payment options available in this plan? The premium payment options available are regular, limited and single. What are the minimum and maximum premium payment terms for Regular/ Limited Premium Payment option? The minimum premium payment term is 5 years and the maximum is upto the Policy Term chosen. What is the minimum and maximum premium for this plan? The minimum premium is as mentioned in the below table: For Regular and Limited Premium Payment options Premium Paying Term Yearly Half-yearly Quarterly Monthly Less than 7 years Rs. 50,000 Rs. 37,500 Rs. 25,000 Rs. 9,500 7 to 10 years Rs. 25,000 Rs. 19,000 Rs. 12,500 Rs. 4, years and above Rs. 15,000 Rs. 11,500 Rs. 8,000 Rs. 3,000 Monthly premium payment frequency will be available under salary deduction scheme & ECS only For Single Premium Payment option Policy Term Single Premium 7 to 10 years Rs. 1,00, years and above Rs. 50,000 There is no limit for maximum regular premium payable. Ques 8. Ques 9. Ques 10. What is the minimum and maximum top up premium in this plan? The minimum top up premium payable is Rs. 5,000 and the maximum is no limit. What will be the vesting benefit under this plan? The vesting benefit under the plan will be higher of the Guaranteed Vesting Benefit or the total Fund Value as on the vesting date. What will be the Guaranteed Vesting Benefit under this plan? The Guaranteed Vesting Benefit will be 101% of the sum of all premiums and top up premiums (if any) paid.

3 Ques 11. What are the available options to utilize the vesting benefit under this plan? The options which are available for utilization of the vesting benefit are as mentioned below: i) Take up to 1/3 rd * of the vesting benefit and purchase an immediate annuity from us with the balance amount at the then prevailing annuity rates, under any immediate annuity plan available on sale then. The available immediate annuity product with us is Pension Guarantee. ii) Purchase a single premium deferred pension plan from us, using the entire proceeds of the vesting benefit irrespective of the minimum single premium. iii) Extend the prevailing deferment period under the plan to any available period^ as on the vesting date, provided the policyholder s age as on the vesting date is less than 55 years. The prevailing Guaranteed Death Benefit, Guaranteed Vesting Benefit and option to pay top up premiums will continue during the extended deferment period. Once the option is chosen, the Guaranteed Vesting Benefit shall not be applicable at the original vesting date. No premiums need to be paid during the extended deferment period. During the extended deferment period, all applicable charges will get deducted. Note: The policyholder will have to exercise one of the above three options before the vesting date * Maximum as allowed by Income Tax Act currently ^The maximum extended deferment period available will be 30 years minus existing policy term Ques 12. Ques 13. Ques 14. Ques 15. Is there an option to terminate the extended deferent period once this option is chosen? During the extended deferment period the policy can be surrendered anytime. The surrender value will have to be utilized in one of the ways as mentioned in Answer 31 below. Where is the fund value invested during the extended deferment period? The fund value will remain invested in the Pension Builder Fund during the extended deferment period. What is the death benefit under this plan? On death of the life assured before the vesting date, the death benefit payable to the nominee will be higher of the total Fund Value as on date of receipt of intimation of death or the Guaranteed Death Benefit. What is the Guaranteed Death Benefit under this plan? The Guaranteed Death Benefit will be 105% of the sum of all premiums and top up premiums (if any) paid till date under the plan. Ques 16. What are the options to utilize the death benefit? The nominee can utilize the death benefit in any of the following ways: i) Take the entire death benefit as cash lump-sum or ii) Use the entire or part of the death benefit proceeds to purchase an annuity from us at the then prevailing annuity rates, irrespective of the age at entry of the nominee/ legal-heirs and the minimum purchase price under the immediate annuity plan available then with the Company.

4 Ques 17. Ques 18. Can the premium payment frequency be altered? Yes, the premium payment frequency can be altered at any time subject to minimum premium allowed under the plan and subject to the existing & requested premium frequencies being aligned. Miscellaneous charge will be applicable for this alteration. Is there an option to change the premium paying term under this plan and when? Yes, there is an option to change (increase or decrease) the premium paying term at any time subject to the minimum and maximum premium paying term allowed under the plan, provided all due premiums are paid. Such option should be exercised before the expiry of the existing premium paying term. Miscellaneous charge will be applicable for the option. Ques 19. Ques 20. Are there any Loyalty Additions under this plan? Yes, Loyalty Additions will be added to the Fund Value on the original vesting date of the policy. How is the Loyalty Addition calculated? Loyalty Additions will be equal to a percentage of annualized/ single premium as given below: Policy Term (years) For Regular/ Limited Premium payment option For Single Premium Payment option For premium less than Rs. 10,00,000 For premium of Rs. 10,00,000 and above 7 to 10 Nil Nil Nil 11 to % 25.5% 3.0% 16 to % 27.0% 3.5% 21 to % 30.0% 4.0% 26 to % 33.0% 4.5% Ques 21. What is the Policy Administration Charge in this plan? The Policy Administration Charge is as follows: For Regular/ Limited Premium Payment option Policy Year onwards Policy Administration Charge Nil 1.7% p.a. of annualized premium capped to Rs. 6,000 For Single Premium Payment option Policy Year onwards Policy Administration Charge 0.8% p.a. 0.38% p.a. of the single premium 5%p.a. on every policy anniversary capped to Rs. 6,000 This charge will be deducted at each monthly anniversary by cancellation of units at the prevailing unit price. The charge is applicable during and after the premium payment term. Ques 22. What is the Premium Allocation Charge in this plan? The premium allocation charge is as follows: The Premium Allocation Charge, for policies sold through channels other than direct marketing (including web/ online) & other than those sold to Staff is as follows:

5 For Regular/ Limited Premium Option Policy Year onwards Premium Allocation Charge 8.50% 5.7% 0.0% For Single Premium Option Policy Year 1 Premium Allocation Charge 4.0% All top up have a premium allocation charge of 2% The Premium Allocation Charge, for policies sold through direct marketing including web/ online or to Staff are as follows: For Regular/ Limited Premium Option Policy Year onwards Premium Allocation Charge 3.5% 0.0% For Single Premium Option Policy Year 1 Premium Allocation Charge 2.0% All top up have a premium allocation charge of 1% The Premium Allocation Charge, for policies sold through Web Aggregators are as follows: For Regular/ Limited Premium Option Policy Year onwards 4.7% if Rs. 15,000 <= Annualised Premium < Rs. 25,000 Premium Allocation 8.50% 4.2% if Rs. 25,000 <= Annualised Premium < Rs. 100, % Charge 3.7% if Annualised Premium Rs. 100,000 For Single Premium Option Policy Year 1 Premium Allocation Charge 4.0% All top up have a premium allocation charge of 1% Ques 23. Ques 24. Ques 25. Who are referred to as Staff under Bajaj Allianz Life policies? Employees of Bajaj Allianz Life, Bajaj Allianz General, Allianz Group & Bajaj Group & their spouse, children and dependent parents are referred to as Staff. What is the Guarantee Charge in this plan? The Guarantee Charge is 0.25% p.a. of the single/ regular premium fund value & top up premium fund value, if any. What is the Fund Management Charge? The fund management charge is as given below: Funds Charges per annum Pension Builder Fund 1.25% Discontinued Pension Policy Fund 0.50%

6 Ques 26. What is the Discontinuance/ Surrender Charge in this plan? The Discontinuance/ Surrender Charge is as follows: Where the policy is discontinued during the policy year For Regular/ Limited Premium Option Discontinuance/surrender charge for the policies having annualized premium up to Rs. 25,000 20% of the lower of AP or FV, subject to maximum of Rs. 3,000 15% of the lower of AP or FV, subject to maximum of Rs. 2,000 10% of the lower of AP or FV, subject to maximum of Rs. 1,500 5% of the lower of AP or FV, subject to maximum of Rs. 1,000 Discontinuance/surrender charge for the policies having annualized premium above Rs. 25,000 6% of the lower of AP or FV, subject to maximum of Rs. 6,000 4% of the lower of AP or FV, subject to maximum of Rs. 5,000 3% of the lower of AP or FV, subject to maximum of Rs. 4,000 2% of the lower of AP or FV, subject to maximum of Rs. 2,000 5 & above Nil Nil For Single Premium Option Where the policy is discontinued Surrender charge during the policy year 1 Lower of 1% (SP or FV) subject to maximum of Rs. 6,000 2 Lower of 0.5% (SP or FV) subject to maximum of Rs. 5,000 3 Lower of 0.25% (SP or FV) subject to maximum of Rs. 4,000 4 Lower of 0.1% (SP or FV) subject to maximum of Rs. 2,000 5 & above Nil AP Annualized Premium, FV Regular Premium Fund Value & SP - Single premium Discontinuance Charge for top up is Nil Ques 27. Ques 28. Ques 29. What is the Miscellaneous Charge and when it is applicable? The miscellaneous charge under this plan is Rs. 100 per transaction in respect of change in premium paying term or alteration of premium frequency. What are the funds available under this plan? Pension Builder Fund (SFIN: ULIF06908/02/13PENSIONBUI116) is available to the policyholder. The risk profile for this fund is Medium. What is the investment objective of Pension Builder Fund? The investment objective of this fund is to provide capital appreciation by investing in a suitable mix of debt and equities. The fund strategy would be to invest in following mix of assets: Portfolio Allocation: Equity & equity related instruments : 0% - 50% Debt, fixed deposits & debt related instruments : 25% - 100% Mutual funds # and money market instruments : 0% - 40% # Mutual fund exposure will be as mandated by the IRDA guidelines The exposure to money market securities may be increased to 100% only in extreme situations external to the company, keeping in view market conditions, political, economic and other factors. All changes in the asset allocation will be with the intention of protecting the interests of the Policy holder.

7 Ques 30. When can the policyholder surrender the Policy? The policyholder may, at any time, surrender the policy. On surrender during the lock-in period of 5 years: i) Death benefit under your plan will terminate immediately ii) Your Fund Value less the discontinuance/ surrender charge, if any, plus the top up premium Fund Value, if any, as on the date of surrender, will be transferred to the Discontinued Pension Policy Fund (SFIN: ULIF07126/03/13DISCONPENS116) iii) The discontinuance value as on the end of the lock-in period will be available to you as surrender value iv) Once the policy is surrendered it cannot be revived On surrender after the lock-in period of 5 years: The total Fund Value, on the date of surrender, will be available as the surrender value and the policy will terminate. Ques 31. Ques 32. What are the options for utilizing the surrender value? The surrender value should be compulsorily used in one of the following two ways: i) Purchase a single premium deferred pension plan from us, using the entire proceeds of the ii) iii) surrender benefit, OR Utilize the entire proceeds to purchase an immediate annuity from us at the then prevailing annuity rates Take up to 1/3 rd * of the surrender value as a lump sum and purchase an immediate annuity from us with the balance amount at the then prevailing annuity rates. If this option is chosen, the surrender benefit will be converted into annuity irrespective of minimum purchase price of the immediate annuity plan available then with the Company. The currently available immediate annuity product with the Company is Pension Guarantee * Maximum as allowed by Income Tax Act Open Market Option cannot be exercised for the purpose of annuitization What happens if premiums are not received under the policy? If regular premiums are not received during the first five policy year, then, the policy holder will have to choose from the following two options: Option (I)- Revive or agree to revive within a period of two years, OR Option (II)- Surrender the Policy without any risk cover and receive the Discontinuance Value either at the end of a) Lock-in period of five (5) Policy Years, OR b) Revival Period, only in case the lock-in period of five (5) Policy Years expires before the expiry of Revival Period. If regular premiums are not received after the first five policy year, then, the policy holder will have to choose from the following three options: i) Option A - Revive within a period of two years, OR ii) Option B - Surrender the policy, OR iii) Option C - Convert your policy into a paid-up policy where no further premiums are payable. If we do not receive any intimation from the policyholder about the preferred option, then, the Company will be constrained to take action as per option B above

8 Ques 33. Ques 34. Ques 35. Is loan available under this plan? No, loan is not available under this plan Under what conditions will the policy terminate? The policy shall automatically terminate on the earlier occurrence of either of the following events: Upon death of the life assured On vesting date or the revised vesting date Upon payment of discontinuance/ surrender value Why mortality charge is applicable in Retire Rich? Retire Rich has a Guaranteed Death Benefit (GDB) of 105% of all premiums paid (including top up) till the date of death. Mortality charge is deducted for providing this GDB. The mortality charge is based on sum at risk. The Sum at risk in Retire Rich will be the difference between the fund value and the GDB (105% of all premiums paid including top up) as on the due date of mortality charge. Eg: Let s say the Fund Value in a policy with a premium of Rs, 15,000 (after one premium was paid) is Rs. 13,500. The GDB for this policy will be Rs. 15,750 (@ 105%). The sum at risk in this scenario will be Rs. 15,750 Rs. 13,500 = Rs. 2,250 The mortality charge is deducted on Rs. 2,250 (sum at risk) which has to be paid for a GDB of Rs. 15,750. However, during the policy term if the fund value becomes higher than the GDB, no mortality charge would be deducted. Ques 36. Why is there disparity in the modal premium? Let s consider a scenario if a male aged 29, opts to invest in an UL endowment product with Rs. 30,000 in the annual mode. His fund value at the end of the Policy Term of ten years at 8%p.a. would be Rs. 4,08,546. In the same scenario keeping all other factors same if the mode opted was monthly and a premium paid is Rs. 2,500 (annual Rs. 30,000) his fund value at the end of the Policy Term at 8%p.a. would be Rs. 3,96,348. Thus a difference of Rs. 12,198 is observed in the fund value between annual mode and monthly mode. This difference is owing to the fact that compared to annual mode in monthly mode money has come in over an extended period leading to lower fund accumulation. As explained above in monthly mode the premium grows at a slower rate leading to lower charges being received by the Company which is a source to meet expenses and profit. Thus, in modes other than annual we are required to increase the minimum modal premium This document is for reference only This document is strictly for internal circulation Changing the content with the intention of misuse and misrepresentation will be subjected to legal consequences For more information on the Product, Bajaj Allianz Retire Rich UIN: 116L126V01, please refer Sales Brochure and Policy Document, available on Company website and Product Circular, available on Product Development Portal Compiled in November 2014, Product Development Department