If you have been a follower of my blog or read any of my articles about Life Insurance, then you would already know that I am a strong believer in Term Life Insurance Products. Even in my book, I have spent an entire section highlighting why Term Plans are a MUST for every individual who has a family and/or dependents. In this article we are going to review one of the recently launched Term Insurance Products called “MetLife Mera Term Plan”
A Refresher – What is a Term Life Insurance Plan?
A Term Life Insurance Plan is a contract between an Insurance Company and the Insured (You) wherein you pay regular premiums and in return, if anything happens to you, the Insurance company will pay a lump sum to your family. The insurance coverage lasts for many years until you cross a certain age threshold (Usually Around 70-75 years depending on which Insurance Company you choose) and in case you actually outlive the policy validity date, the Insurance Company pays you nothing.
Some people are actually worried about losing all the premium that was paid for the 20/30/40 years of their life but this is exactly the reason why insurance co.’s are able to offer very high coverage for low premiums. Among the many thousands who take up the term policy, only a small % actually make claims. So, for a small premium each year you get a big coverage.
What is MetLife Mera Term Plan?
MetLifeMera Term Plan (MMTP) is a comprehensive and flexible term plan, offering multiple options to financially protect one’s family. The product covers a customer’s need ranging from a simple term cover, monthly income for the family, child’s education expenses, joint cover for the spouse, option to increase sum assured depending on life stages, among other benefits.
With flexibility in its core design, one can now create their own financial protection plan from the comfort of their home anytime, anywhere. The simple and hassle free online buying process designed by PNB MetLife will help customers with easy navigation, click to call facility for instant query support, flexibility to track and review application.
Its unique features include joint life cover, increasing monthly income option growing @ 12% p.a., life stage benefit, and child benefit option to cover one’s child’s education expenses till they turn 21.
A Little Bit about PNB MetLife
PNB MetLife India Insurance Company Limited (PNB MetLife) is one of the fastest growing life insurance companies in the country, having as its shareholders, MetLife International Holdings LLC. (MIHL), Punjab National Bank Limited (PNB), Jammu & Kashmir Bank Limited (JKB), M. Pallonji and Company Private Limited and other private investors, with MIHL and PNB being the majority shareholders. PNB MetLife has been present in India since 2001. PNB MetLife is present in over 150 locations across the country and serves customers in more than 8,000 locations through its bank partnerships with PNB, JKB and Karnataka Bank Limited.
What are the Various Payout Options Available under this Plan?
This Mera Term Plan currently offers 4 different Payout Options. See the Picture Below:
Option 1 - Full Lump Sum Payout: Death sum assured shall be payable as ‘Lump Sum’ on death that can be used towards payout of major financial commitments
Option 2 – Lump Sum + Regular Monthly Income: 50% of the Death sum assured is paid out as ‘Lump Sum’ on demise of insured and the balance is paid in as equal monthly income over 120 months (10 years) to the nominee. This monthly payout amount will be 0.58% of the Base Sum Assured.
Option 3 – Lump Sum + Increasing Monthly Income: 50% of the Death sum assured is paid out as ‘Lump Sum’ on demise of the insured and the balance is paid out as inflation adjusted monthly income over 120 months (10 years). The monthly payout amount for the first year will be 0.39% of the Base Sum Assured and it will increase @ 12% per annum simple rate of interest.
Option 4 – Lump Sum + Regular Monthly Income till Child Turns 21: This Option is only available for policyholders who have children aged 15 years or lower. 50% of the Death sum assured is paid out as ‘Lump Sum’ on demise of the insured and the balance will be paid out as regular monthly instalment until the nominee (child) attains the age of 21 years. This monthly payout amount will be in proportion to the Base Sum Assured and will vary based on the age of the child at the time of the death of the Insured.
Note: For Option 4 if the nominee child is older than 21 years at the time of the demise of the insured, the entire sum assured will be paid in one lump sum.
What are the Additional Protection Benefits Available in this Mera Term Plan?
Along with the regular Term Insurance Coverage, the individual can also buy Two Additional Protections as part of this plan. They are:
1. Life Stage Benefit
The policy holder has an option to buy additional insurance coverage (increase sum assured) during significant life stage events without any medical examination. Of course, this extra coverage is subject to the payment of additional premiums but it reduces the hassle of actually signing up for yet another insurance policy and going through another medical examination just to increase our coverage. The option to increase the sum assured over the various life stage events will be:
- At Marriage: Equal to 50% of the Original Cover or 50 Lakhs whichever is higher
- At the Birth of the 1st Child: Equal to 25% of the Original Cover or 25 Lakhs or 50 lakhs minus the amount signed up as additional coverage so far - whichever is higher
- At the Birth of th3 2nd Child: Equal to 25% of the Original Cover or 25 Lakhs or 50 lakhs minus the amount signed up as additional coverage so far - whichever is higher
In all of the above mentioned life stage event, the additional premium for the increased life coverage will be calculated based on your age & prevailing standard premium rates at the time you avail the option.
The Maximum Additional Coverage/Sum Assured you can sign-up for under all these events is 50 lakhs. This means, if you opted for an extra 25 lakhs coverage at marriage, you can avail another 25 lakhs at the birth of your first child however you cannot increase your coverage when your second child is born. Similarly, if you had increased your coverage by 50 lakhs post marriage, you wouldn't have an option to increase your sum assured when your children are born.
Important Points to Note:
- The policy holder would need to indicate that he/she wishes to avail this option to increase insurance coverage at the inception of the policy itself.
- It is not mandatory that you need to revise your insurance coverage at significant life events. It is Your Choice
- This Option is not available if you choose the option of Joint Life Coverage (Read further to know about this option)
2. Joint Life Cover Benefit
Under this joint life cover option, both the policy holder and his/her spouse is covered. When you sign up for the policy, you can select this joint cover as an option. The coverage for the second life shall be equal to 50% of the sum assured chosen by the primary policy holder subject to a maximum of 50 lakhs.
Let’s take a real life scenario to understand better about how this benefit works. Assumptions would be:
- Mr. X is the Main Policy Holder (First Life)
- Mrs. X has the Joint Cover (Second Life)
- First Life Sum Assured is 1 Crore and Second Life Sum Assured is 50 Lakhs
- All Scenarios below happen within the policy duration where neither party is beyond the 75 year age limit
Scenario 1: In case of Mr. X’s death, Mrs. X gets the sum assured 1 crore paid out. The policy will continue with all future premiums being waived. When Mrs. X dies, the sum assured of 50 lakhs is paid out to the nominee and the policy is terminated.
Scenario 2: In case Mrs. X dies first, the sum assured of 50 lakhs is paid out. The policy will continue where Mr. X will continue to pay the Base Premium each year. In case of Mr. X’s death, the sum assured of 1 crore will be paid out to the Nominee and the policy is terminated
Scenario 3: In case of death of both Mr. and Mrs. X simultaneously the full life cover of 1.5 crores will be paid out to the nominee and the policy will be terminated
Important Points to Note:
- The option of joint life cover has to be indicated at the time of inception of the policy
- This option is only available for policies where the primary sum assured is greater than or equal to 50 lakhs
- Additional Premiums (as required) would need to be paid for the second life as part of the joint coverage
What are the Eligibility Criteria for the Policy?
Your Age is the main eligibility criteria to buy this product.
- Min Age at Entry: 18 Years
- Max Age at Entry: 65 Years
- Max Maturity Age: 75 Years
- Maximum Policy Term: 40 Years
- Minimum Sum Assured: 10 Lakhs
- Maximum Sum Assured: 500 Crores
This means, you can buy this policy as long as you are between 18 and 65 years old. The Policy Term will depend on your age with the policy maturing/ending when it reaches 40 years tenure or you are 75 years of age (whichever is earlier).
How Can I Buy the Plan?
The Plan is very convenient and can be easily purchased by the Individual – Online
Step 1: Customer creates his own custom insurance Plan by choosing the Base Sum Assured, Coverage Term, The Payout options, Family coverage, Premium Payment Frequency etc.
Step 2: Generate Premium Quote by selecting your Age, Gender and providing additional information (Like whether you smoke or consume tobacco products)
Step 3: Fill in your Personal info, work info, family medical history and most importantly the Nominee Information
Step 4: Start Paying Premiums and your Insurance Coverage starts as per the Policy Terms & Conditions.
Note: Just like any Insurance Product, this policy too has a free look period. You have a period of 30 days from the date of receipt of the policy document to review the terms & conditions of this policy. If you have any objections to any of those terms or conditions, you have the right to return the policy by stating the reasons for the objection. By doing so, the Insurance Company will terminate the policy and refund the premium you paid after deducting a small % for the risk the insurance company had borne during the few weeks (where if anything had happened to you, the claim would have been made nevertheless) and also to cover additional expenses like a medical test or stamp duty charges.
Policy Lapse and Revival
PNB MetLife offers a grace period from the due date of the unpaid premium for the customer to make the payment. It is 15 days for monthly payment mode and 30 days for other payment frequencies. During this grace period the policy will still be “In Force” and if any claims arise, the company will still honor the claim. Of course, any unpaid premiums will be deducted from the payout. In case the premiums are not paid before the end of the grace period, the policy will lapse. All risk covers will cease and no claims will be honored.
You can revive your lapsed policy within a period of 2 years from the date of first unpaid premium however there are a few restrictions:
- You need to show proof that you will be able to continue to make premium payments regularly in future
- You need to make payment of all due premiums along with prevailing penal interest (as approved by IRDA)
- You could be asked to take up additional medical/health check-up if required before your policy is revived
- If it has been more than 2 years since the first premium payment was Missed, the Policy Cannot be Revived
What is Not Covered Under this Policy?
As with any Insurance Policy, this Mera Term Plan does not cover Suicide within one year from the date of inception of the policy. In case of suicide by either the primary or joint life holder during the first year, the insurance cover for both parties will be Null & Void. In such a case, the company will refund/pay 80% of the premiums that were paid till the policy holder’s death without any Interest.
In case of suicide by either the primary or joint life holder within one year from the date of revival of the policy, the insurance cover for both parties will be Null & Void. In such a case, the company will refund/pay higher of surrender value on the date of death or 80% of the premiums that were paid till the policy holder’s death without any Interest. However this is a norm across the insurance sector.
Highlights of the Mera Term Plan
The Mera Term Plan is a fully Online Term Insurance Plan that has many key Highlights which include:
· Flexibility for customers to design their own financial protection plan to secure the future of their loved ones from the comfort of their homes· The First Term Policy/Plan in India that considers the policyholders kids’ education under a term plan· Innovative options like joint life cover with spouse, with waiver of premium, in the absence of primary life assured· Option to increase Sum Assured depending on Life Stages, without any medical tests· Choose from multiple payout options to support family dreams and financial commitments after our demise· Choose from multiple payment frequencies to suit your money flow each month· Easy to navigate and intuitive sales portal for buying the policy even on a smartphone· Multiple payment options for customer convenience including internet banking, Credit/Debit cards issued by most major banks as well as mobile wallets like Airtel Money, Paytm etc.· As the middlemen or Insurance Salesmen are non-existent in this online sales process, the company is passing on the benefit to the consumer by way of Competitive Premium Rates· Tax Benefits under Section 80C of the Indian Tax Laws
What would be the Potential Premium Payments for a 1 Crore Coverage under this Policy?
For a Healthy Non-Smoking Male, below would be the yearly premium payment table (exclusive of service tax) for the different policy tenures.
Note: The exact premium you pay each year would vary based on your age as well as the additional benefits you choose from. Please use the “Get Quote” option in their Product Portal Page to find out your exact premium. Click Here to open the product home page.
Shortcomings of the MetLife Mera Term Plan
As with any Product, there are two sides of the coin. There are some potential shortcomings for this product which You the Customer has to be wary about. The Product Does not offer any Disability Benefit. In western countries this option to include Total Permanent Disability in a life insurance product is quite popular. What if the insured individual has a major accident which leaves him bedridden or totally disabled and unable to work? This product wouldn't pay anything in case of such an event. It would’ve made this product even better with this option but for the time being such an option isn’t available.
However the product does offer riders or additional benefits like Critical Illness cover & Accidental Death cover.
As with any insurance product, the agreement between the policy holder and the insurance company is strictly governed by the Terms and conditions in the Policy Document. Also, Insurance Companies take falsified information very seriously and 90% or more cases of rejected policy claims arise out of incorrect information provided by the customer at the time of policy sign-up.
This being an Online Policy the onus is on the consumer (You) to go through all of those terms and conditions properly and provide accurate & truthful information when you sign-up for the product, to avoid any surprises in future.
So, if you feel you don't understand the product or if you need more info or have any questions, do reach out to experts (Customer Service officers from MetLife will be more than happy to help you understand the product if you have any queries or need help filling up the application form, all you need to do is call them) before signing up because once you sign up, the “Oh, I did not know that” exclamation will not help you when your claim is being reviewed or being disputed.
PNB Metlife - Customer Service Information:
Phone: 1800 425 6969
Some Last Words:
With online sales & marketing catching a lot of steam in India, Insurance companies are joining the foray and introducing products that customers can purchase from the comfort of their home. This is a big plus for the informed customer because for a small effort in keying in personal information, they are going to save a ton of money in yearly premium payments which would have eventually been paid out by the Insurance Company to the Insurance Agent.
The product is flexible, easy to purchase online, offers good additional benefits and has multiple pay-out options which make this a Great Insurance Product. Any individual looking for a competitive term insurance product could definitely add this MetLife Mera Term Plan to the list of shortlisted entries for further evaluation and choose the one they feel meets their needs the Best.
Happy Insuring Yourself!!!
Disclaimer: All details presented in this article were taken from PNB MetLife Website & their Product Brochure and are correct at the time of publishing the article. The views expressed in this article are entirely those of the Blogger and is not a sales pitch for the aforementioned product. Every individual has a different insurance requirement and you are requested to review your financial situation before purchase of any product. The author does not accept any liability that may arise out of your decision to purchase this product.