Aegon Life Insurance: Is It Worth Your Money?

Aegon Life Insurance Company, now known as Bandhan Life Insurance Limited, is an Indian life insurance company that offers a range of insurance policies, including term plans, savings plans, retirement policies, and group life insurance policies. The company was founded in 2008 as a joint venture between Dutch insurance company Aegon N.V. and the Times Group, and it has since built a reputation for providing comprehensive coverage and responsive customer service. In this article, we will explore the features and benefits of Aegon Life Insurance policies, including their claim settlement process, to help you decide if it is the right choice for your needs.

Term insurance plans

Benefits of Aegon Life Term Insurance Plans:

• Accidental Death Benefit: In case of accidental death, an extra benefit equal to 100% of the sum assured is provided, subject to a maximum of Rs. 1 crore.
• Critical Illness Benefit: This benefit provides a lump-sum payout if the policyholder is diagnosed with a listed critical illness.
• Flexible Premium Payment Terms: Aegon Life Term plans offer flexible premium payment terms ranging from 10 to 15 years for limited payment options and up to 60 years for regular payment options.
• High Coverage Amount: Aegon Life Term insurance policies offer a high coverage amount, ranging from a few lakhs to several crores of rupees.
• Tax Benefits: Term insurance policies offer tax advantages under Section 80C and Section 10(10D) of the Income Tax Act, 1961.

Types of Aegon Life Term Insurance Plans:

• Aegon Life iTerm Plan: This plan offers a maximum age of 65 years at the time of maturity and a premium payment term equal to the policy term. The premium payment frequency can be single, annual, semi-annual, or monthly.
• Aegon Life Term Plan: The minimum age for this plan is 20 years, and the maximum age at maturity is 75 years. The premium payment term is equal to the policy term, and the premium payment frequency can be monthly, half-yearly, or yearly.
• Aegon Life iReturn Plan: This plan has a minimum age of 18 years and offers maturity ages of 5, 10, 15, or 20 years. The premium payment term can be single, five years, or equal to the policy term, and the frequency can be monthly, half-yearly, yearly, or single.
• Aegon Life iSpouse Insurance Plan: This plan is designed for couples, with a minimum age of 21 years for both spouses. The maximum age at entry is 60 years, and the maturity age is 65 years for both spouses. The premium payment term is equal to the policy term.

Example of Aegon Life Term Insurance:

Let's consider Mr. Raj, a 30-year-old senior management professional who needs to travel frequently for work. He has a family comprising a housewife and two young children. Mr. Raj owns a car and a house, both financed through loans. To ensure his family's financial security, he chooses an Aegon Life Term Insurance plan with the following features:

• Base sum assured (cover amount) = Rs. 40 lakhs
• Policy term = 20 years
• Premium payment term = 30 years
• Inbuilt accidental death benefit = Rs. 40 lakhs
• Annual premium = Rs. 10,000

Unfortunately, Mr. Raj passes away in an accident three years after taking the policy. His family receives a total payout of 330% of the base sum assured, which amounts to Rs. 1.32 crore. This includes Rs. 20 lakhs as 50% of the cover amount, Rs. 40 lakhs as 100% of the accidental death benefit, and Rs. 1.2 lakhs per month for the following five years. This lump sum payout helps Mr. Raj's family repay their loans, and the monthly payout enables them to maintain their current lifestyle.

Savings and investment plans

Aegon Life Insurance offers a range of savings and investment plans to meet different needs. Here are some of the key features and benefits of their savings and investment offerings:

POS Guaranteed Return Insurance Plan: This plan provides a dual advantage, offering a guaranteed fixed income if the policyholder dies before the completion of the policy term, as well as a maturity benefit at the end of the policy term. Policyholders can also avail tax savings under relevant sections. The entry age for this plan is 1 to 50 years, with a maturity age of 18 to 65 years. The policy term ranges from 10 to 20 years, and the minimum yearly premium is INR 10,000.

ULIP Plans: ULIP plans provide both financial protection and investment opportunities. These plans aim to maximise investment by ensuring the policyholder's full contribution is invested in the funds of their choice. Policyholders have the flexibility to choose from different portfolio strategies and can also make partial withdrawals. The entry age is 7 to 55 years, with a maturity age of 65 or 70 years, depending on the specific plan. The policy term ranges from 10 to 25 years, and the minimum annual premium varies between INR 24,000 and INR 1,000 per month.

Traditional/Investment Plans: These plans are issued for a longer-term perspective, and money cannot be withdrawn. In case of discontinuation of premium payments, the plan becomes paid-up if at least three years' worth of premiums have been paid. The plans may be offered as participating or non-participating, and they can be structured as endowment plans or money-back plans. Tax benefits are available on the premiums paid and the claims received. The specific features and benefits vary across different traditional plans offered by Aegon.

Overall, Aegon Life Insurance provides a diverse range of savings and investment plans, each catering to different needs and offering various benefits. These plans provide financial protection, investment opportunities, tax savings, and guaranteed returns, making them a viable option for individuals looking to secure their future and that of their families.

Child plans

Aegon Life Child Plans are a type of insurance plan designed to protect a child's future financial well-being in the event of a parent's death. These plans can be structured with either the parent or the child as the insured life, offering different benefits and features to meet specific needs.

One of the key advantages of Aegon Life Child Plans is their ability to provide financial security for a child's future. In the unfortunate event of a parent's death, the plan ensures that the financial burden of raising a child is alleviated. The insurer will step in and pay the premiums, ensuring that the child's aspirations and goals can still be achieved. This feature is especially valuable for single parents or families with limited financial resources.

Aegon Life Child Plans offer flexibility in terms of coverage and payment options. The plans can be tailored to suit the family's financial situation, with the option to choose between traditional child plans and Unit Linked Insurance Plans (ULIPs). The traditional money-back plan provides regular payouts to support the child's ongoing financial needs, while the ULIP option offers investment opportunities for long-term growth.

One notable feature of Aegon Life Child Plans is the deferment period for child coverage. If the plan covers the child's life, there may be a delay in coverage for the initial years, known as the deferment period. Once this period is over, the life cover becomes active, providing financial protection for the child. During the deferment period, if the child passes away, the paid premiums will be refunded to the family.

The vesting process is another important aspect of Aegon Life Child Plans. When the child reaches the age of 18 and attains maturity, they become the owner of the policy. This transfer of ownership ensures that the child has direct access to the financial resources and can make decisions regarding their future.

Aegon Life Child Plans also offer additional benefits, such as the Premium Waiver clause. If the plan insures the parent and they pass away, the company waives all future premiums while keeping the plan active. This ensures that the child continues to receive the benefits outlined in the policy, providing a sense of financial stability during a challenging time.

Retirement policies

Aegon Life Insurance offers a range of retirement plans to help individuals secure a regular income for life after retirement. Here is a detailed overview of the retirement policies offered by Aegon Life Insurance:

Insta Pension Insurance Plan

This plan provides a guaranteed source of income for life. Individuals only need to make a one-time premium payment and can secure a regular income for their retirement years. The minimum and maximum entry ages for this plan are 50 and 85 years, respectively, with a minimum sum assured of INR 2,50,000. There are two annuity payout options available, which provide lifetime income post-retirement:

• Life annuity plan: Pays a regular income for life. However, if the policyholder dies, the policy terminates without any additional payout.
• Life annuity with a return of purchase price: Pays an annuity for life, and upon the policyholder's death, the purchase price is returned to the nominee.

The premium payment options for this plan range from a minimum of INR 1,044 to a maximum of INR 13,051, which can be paid monthly, quarterly, half-yearly, or yearly. It is important to note that this plan does not offer a loan facility.

Jeevan Riddhi Insurance Plan

The Jeevan Riddhi Insurance Plan has an entry age range of 18 to 55 years, with a maximum maturity age of 70 years. This plan offers life coverage along with savings and protection benefits. In the unfortunate event of the policyholder's death during the policy term, the beneficiary will receive the following as a death benefit:

• Sum assured on death
• Accrued guaranteed additions
• Accrued reversionary bonus (if any)
• Terminal bonus (if any)

If the policyholder survives until the end of the policy term, they will receive the maturity benefit, which includes:

• Sum assured
• Accrued guaranteed additions
• Accrued reversionary bonus (if any)
• Terminal bonus (if any)

Additionally, this plan guarantees an extra income of 5% of the sum assured for every year of premium payment. The benefit amount also increases annually through bonus accumulations or accruals. A lump-sum payout is provided at maturity. This plan also offers tax benefits under sections 80C and 10 (10D) of the Indian tax laws. It includes an accidental death benefit equal to 50% of the sum assured and provides the option to choose a premium waiver in case of disability. A loan facility is available once the policy acquires a surrender value, with a minimum annualized premium of INR 15,000.

Regular Money Back Insurance Plan

The Regular Money Back Insurance Plan has an entry age range of seven days to 60 years, with a policy term of 20 years. The minimum annualized premium is INR 12,000 for a 7-year or 10-year payment period. This plan offers life cover and guaranteed payouts for ten years. Guaranteed money-back payouts are payable annually from the 10th to the 19th policy year, provided all due premiums have been paid. Similar to the previous plan, the benefit amount increases annually through bonus accumulations or accruals. A loan facility is available once the policy acquires a surrender value, and a premium waiver option is available in case of disability.

Rural Term Insurance Plan

The Rural Term Insurance Plan is designed for individuals aged between 18 and 45 years, with a maturity age of 70 years. The minimum and maximum premiums are INR 300 and INR 1,000, respectively, and the policy term is five years. In the unfortunate event of the policyholder's death during the policy term, the sum assured is paid as a death benefit to the beneficiary. This plan requires a one-time premium payment for a five-year life insurance cover. The policy acquires a surrender value after the full single premium is paid.

Group life insurance policies

Group life insurance is usually offered as a workplace perk and is fairly inexpensive, or even free, for employees. The cost of group life insurance is often subsidized by employers, who pay some or all of the premiums. Basic group life insurance is typically guaranteed issue, meaning employees don't need to undergo a medical examination or answer health questions to qualify. This makes it convenient and easy to obtain coverage.

The most common type of group life insurance is term life insurance, which is renewable each year with the company's open-enrollment process. Coverage amounts are generally low, often capped at one to two times the employee's annual salary. This means that group life insurance may not provide sufficient coverage for individuals with dependents or significant financial obligations.

While group life insurance offers the benefit of convenience and low cost, it also has some drawbacks. Coverage is typically tied to employment, and if an employee leaves the company, they may lose their coverage. Group life insurance policies also have limited choice, as employers usually work with a single carrier, and the coverage amounts may not be high enough for everyone's needs.

Overall, group life insurance can be a valuable perk, but it is important to understand its limitations and consider supplementing it with an individual policy to ensure adequate coverage.

Frequently asked questions