by The Convertible Whole Life Assurance policy, also known as Suvidha, represents a unique and versatile investment cum life insurance plan that amalgamates the features of both “Whole Life Assurance (Suraksha)” and “Endowment Assurance (Santosh)” policies. This innovative scheme is particularly suitable for individuals who find it challenging to choose between the long-term protection offered by Whole Life Assurance and the savings-oriented approach of Endowment Assurance policies.
Key Features of the scheme are given below:
Flexibility in Policy Type: Suvidha offers policyholders the flexibility to begin with the Whole Life Assurance policy and later convert it to an Endowment Assurance policy after a specified duration, typically after 5 years.
Conversion Option: The policyholder has the option to convert to Endowment Assurance within the first 6 years of taking the policy. If conversion does not occur within this timeframe, the policy will continue as a Whole Life Assurance plan.
Age Criteria: To be eligible for conversion, the policyholder’s age should not exceed 55 years on the day of conversion. The minimum age at entry is 19 years, and the maximum age is 55 years.
Sum Assured and Maturity: The policy provides a maximum sum assured of Rs. 10 lakh. Maturity of the policy occurs at the age of 50, 55, or 58 years, depending on the chosen age at the time of conversion.
Premium and Terms Adjustment: Upon conversion, both premiums and policy terms will be revised accordingly to align with the characteristics of the Endowment Assurance policy.
Bonus Structure: The bonus due on the policy will be adjusted based on the terms applicable to the Santosh Policy upon conversion.
Financial Facilities: The policy allows for a loan facility after 4 years of the policy term, providing a financial cushion for the policyholder.
Surrender Value and Assignment: Surrender value is payable after 3 years, offering a financial exit option. Additionally, assignment and nomination facilities are available to provide flexibility in the policy’s ownership and beneficiaries.
Tax Planning: Suvidha is positioned as the most convenient policy for income tax payers and new entrants to service. It allows individuals to plan their savings with consideration for the anticipated increase in tax liability and earnings over a 5-year period.
In essence, the Convertible Whole Life Assurance policy (Suvidha) offers a comprehensive and adaptive approach to life insurance and investment, catering to the evolving needs of policyholders over time. Its unique features provide a balance between lifelong protection and the opportunity for savings, making it a versatile and valuable financial instrument.
