Aviva Live Smart Plan

Aviva Live Smart Plan

by Editor

Aviva Live Smart Plan – Overview

Aviva Live Smart consistently ranks alongside some of the best unit-linked insurance plans available in India. This innovative ULIP plan from the ever-so-popular Aviva Life Insurance Company comes loaded with a host of benefits and features to help investors get maximum returns on their investment while enjoying comprehensive life insurance cover.

Aviva Live Smart Plan – Key Highlights

This Unit Linked Insurance Plan comes with the lowest premium allocation, fund management, policy admin and mortality charges.
The inbuilt accidental death benefit rider ensures that the nominees of the policy aren’t faced with financial difficulties in the event of the accidental death of the life insured.
The plan offers 7 market leading fund options to choose from allowing policyholders to choose from one or more funds to invest based on their risk tolerance.
Loyalty Additions are added to Aviva Live Smart plan to boost the total fund value and maximize the returns on investment.
The plan offers 4 free partial withdrawals.

Aviva Live Smart Plan – Eligibility Criteria

Aviva Live Smart plan is available for Indian residents. Here is a table that illustrates the eligibility criteria for Aviva Live Smart plan:

MinimumMaximum
Entry Age2 years65 years
Maturity Age18 years80 years
Policy Term15 years30 years
Premium amountRs.50, 000No limit
Sum Assured(<45 years) – higher of 10 X annual premium or 0.5 X plan term X annual premium
(4 years >)– 10 X annual premium
Plan term X annual premium
Premium Payment TermEqual to Policy Term
Premium Paying FrequencyYearly

Aviva Live Smart Plan – How it Works?

As discussed above, the plan is available for Indian residents and can be purchased online. Those buying the policy simply need to decide the premium amount they wish to pay and select the investment fund where they wish to invest their money.

The total Sum Assured is expressed as a multiple of the annual premium. The multiple is dependent upon the term of the policy and policyholder’s age. There are 7 investment fund options where policyholders can invest their money. These investment fund options are:

Balanced Fund II
Bond Fund II
Enhancer Fund II
Growth Fund II
Infrastructure Fund
Protector Fund II
PSU Fund

If the event of the death of the policyholder during the term of the policy, Aviva Live Smart plan pays the death benefit to the nominee of the plan. In the event of accidental death of the policyholder, the plan pays the accidental sum assured along with the death benefit to the nominee selected by the life insured of the policy. Upon maturity, the maturity proceeds are paid to the life insured.

Aviva Live Smart Plan – Benefits

Maturity Benefit

Upon the maturity of the policy, total Fund Value plus top-up Fund Value (if any) as on the date of the maturity of the policy is paid to the policyholder. In addition, the accrued Loyalty Additions are also paid out to the life insured upon maturity of the policy.

Death Benefit

In the event of the death of the life insured, higher of the total Sum Assured or 105% of total premiums paid till the date of death plus the total Fund Value is paid out as the death benefit to the nominee of the plan. Death benefit also includes higher of the top-up Sum Assured or 105% of total top-up premiums paid plus the total top-up Fund Value.

Accidental Death Benefit

In the event of accidental death of the policyholder during the term of the plan, an accidental death Sum Assured is paid in addition to the death benefits. The accidental Sum Assured is equal to the base Sum Assured subject to a maximum limit of Rs.50 Lakhs.

Loyalty Additions

The plan also offers loyalty additions to ensure maximum return on investment for the life insured. Loyalty Additions are usually expressed as a percentage of the fund value and are added to the total fund value. These loyalty additions are added every 5 years after the completion of 10 policy year provided the premium payments have been made on time. Here’s a table that illustrates the rate of loyalty additions at different times during the term of the policy:

Policy TermRate of Loyalty Addition
10th year (End)0.75%
15th year (End)0.75%
20th year (End)1%
25th year (End)1%
30th year (End)1.50%

Income Tax Benefit

All premium payments made under the plan are subject to tax exemption under Section 80C of the Indian Income Tax Act. The maximum tax exemption allowed for ULIP premium payment is Rs.150000. In addition, the death and maturity benefits are also tax-exempt under Section 10(10D) of the income tax act.

Aviva Live Smart Plan – Key Features

Accidental Death Benefit Rider

The plan comes packed with an accidental death benefit rider and in the event of the accidental death of the policyholder, nominees of the policy get an accidental death benefit in addition to the regular death benefit.

Partial Withdrawals

Aviva Live Smart Plan allows 4 free partial withdrawals in a year after the completion of 5 policy years. The minimum amount of partial withdrawal is Rs.5000.

Fund Switching

The fund switching feature under Aviva Live Smart Plan allows policyholders to change their investment fund options completely or partially, any time they wish during the term of the policy. The plan allows 12 free switches in one year.

Premium Redirection

This is yet another brilliant feature that allows policyholders to redirect their premium in case they choose to switch investment funds. There are no charges for premium redirection.

Top-up Premiums

Aviva Live Smart Plan allows policyholders to top-up their chosen funds with extra premium any time during the term of the policy, except for the last 5 policy years. These top-up premiums also accrue a top-up sum assured which is 1.25 times the top-up premium amount. The minimum top-up premium amount that policyholders can make under the plan is Rs.5000/

Sum Assured Reduction

Policyholders can choose to reduce the Sum Assured provided they have chosen the sum assured multiple higher than the minimum allowed multiple.

Grace Period

Policyholders get a grace period of 30 days to make the premium payment. For the tenure of the grace period, the plan does not lapse.

Free Look Period

Policyholders get a free look-up period of 15-30 days. In case the policyholder doesn’t agree with the terms and conditions of the plan, they can choose to get the plan canceled and get a refund after the deduction of mortality charge, service tax, cess and stamp duty.

Aviva Live Smart Plan – Applicable Charges

Let’s take a look at the different charges incurred on Aviva Live Smart Plan.

Premium Allocation Charge

Premium allocation charge is the charge to allocate premium towards investment and insurance components of the plan. It is deducted from every month’s premium payment. Here is the scale of premium allocation charges:

Policy yearRegular premiumTop-up Premium
19%2%
27%
3-106%
11 and above3%

Policy Administration Charge

Policy administration charges are charged towards the administration of the plan. Aviva Live Smart Plan charges a monthly payment of 0.02% of the annual premium from the total fund value in the 2nd to 5th policy years. From the 6th year onwards, the policy admin charge increases to 0.30% of the annual premium. However, the maximum amount of policy admin charge doesn’t exceed Rs.400 every month.

Fund management Charge

Fund management charges are applicable on the type of funds selected by the life insured. These charges are charged on a daily basis. These are charges are as follows:

Fund TypeCharge
Balanced Fund II1.35% yearly
Bond Fund II1.35% yearly
Enhancer Fund II1.35% yearly
Growth Fund II1.35% yearly
Infrastructure Fund1.35% yearly
Protector Fund1.35% yearly
PSU Fund1.35% yearly
Discontinuance Policy Fund0.50% yearly

Discontinuance Charge

This is the charge that’s applicable on plans where premium payments have been discontinued. These charges are as follows:

Discontinuance Year Annual Premiums (>Rs.25,000)
1Lower of 6% of annual premium or Fund Value up to a maximum of Rs.6000
2Lower of 4% of annual premium or Fund Value up to a maximum of Rs.5000
3Lower of 3% of annual premium or Fund Value up to a maximum of Rs.4000
4Lower of 2% of annual premium or Fund Value up to a maximum of Rs.2000
5 year onwardsNil

Mortality charge

This charge is charged each month and is calculated basis the total Sum at Risk and the age of the policyholder.

Miscellaneous Charges

These charges are applicable for any miscellaneous service availed by the policyholder.

Aviva Live Smart Plan – Exclusions

In case the policyholder commits suicide in 12 months of the inception or renewal of the policy, total Fund Value is paid out to the designated nominee of the plan.

In the event of the accidental death of the policyholder, the accidental death benefit is paid out to the nominee in addition to the regular death benefit. However, the accidental death benefit is not paid out if the accident occurred due to consumption of alcohol or drugs. Also, the benefit is not paid if the accident happened due to war and civil commotion, radiation, aviation, non-compliance of medical advice, infection, self-inflicted injury, criminal acts, or hazardous sports and hobbies or in cases where policyholder received medical treatments for some medical condition 48 months prior to policy commencement or revival.

Aviva Live Smart Plan – Non-Payment of Premium

If the premium payment is not paid even in the grace period of 30 days, the policy would lapse. Policyholders may choose to revive or surrender the policy. Or convert their policy into paid-up policy.

If the premiums are not paid within the Grace Period, the policy would lapse. The lapsed policy can be revived, surrendered or made paid-up as per the policyholder’s choice.

Paid-up Policy

Policyholders can convert their policy into paid-up policy provided premiums have been paid for 5 years. Paid-up value is equal to Sum Assured X (number of Premiums Paid / total number of premiums payable). Accidental Sum Assured is reduced if the policy is paid up. Paid-up policy also incurs mortality charges, rider charges, Fund management Charges, and Policy Admin charges.

In addition, the death benefit provided under the paid-up policy is higher of the paid-up Paid-up Value or 105% of all premiums paid till the date of the death of the life insured plus the total Fund Value. Higher of Top-up Premium Sum Assured or 105% of top-up premiums paid plus the top-up Fund Value is also paid as death benefit.

Policy Surrender

Here’s what happens when someone surrenders the policy:

Before 5 Years

If the policy is surrendered within the first 5 years, i.e., before the end of the lock-in period of the policy, the discontinuation charges are deducted and fund value is transferred to the discontinuance policy fund. This fund earns a minimum of 4% interest every year until the completion of 5 policy years. Fund management charges are also deducted as and when applicable. In the event of the death of the policyholder during this period, the fund value as on the date of the life insured is paid as the death benefit. If the policyholder survives the 5 year period, the total fund value is paid out as the benefit.

After 5 Years

If Aviva Live Smart Plan is surrendered after the completion of 5 years, the total fund value as on the date of surrender is paid as the benefit and no charges are deducted from the pay-out.

Policy Revival

In cases the policy lapses due to discontinuation of the policy, the policy revival is allowed within 2 years from the date of first unpaid premium. In order to revive the policy, policyholders are required to pay the entire outstanding amount and any interest applicable to the policy.

Aviva Live Smart Plan – FAQs

Question 1: What rider options are available under Aviva Live Smart Plan?

Answer: Aviva Live Smart Plan comes loaded with an in-built accidental death benefit rider to ensure a financially secure future for the nominee of the policy.

Question 2: Do I need to undergo a medical test to buy Aviva Live Smart Plan?

Answer: Those looking to buy Aviva Live Smart Plan don’t necessarily need to undergo medical tests or check-ups to buy the plan. Instead, they can simply fill a self-declaration of good health and purchase the plan online.

Question 3: How many investment fund options are available under this plan?

Answer: There are 7 investment fund options available under this plan. These investment fund options are:

    1. Balanced Fund II
    2. Bond Fund II
    3. Enhancer Fund II
    4. Growth Fund II
    5. Infrastructure Fund
    6. Protector Fund II
    7. PSU Fund

Question 4: Can one take a loan against this plan?

Answer: No, this plan doesn’t offer loan facility and no loans can be taken this policy.

Question 5: Are there any loyalty additions under this plan?

Answer: Yes, Aviva Live Smart Plan provides Loyalty Additions in the last 3 years of the policy to ensure maximum returns for the investors. The rate of the Loyalty Additions largely depends upon the plan term:

Policy TermRate of Loyalty Addition
10th year (End)0.75%
15th year (End)0.75%
20th year (End)1%
25th year (End)1%
30th year (End)1.50%
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