Max Life Term Insurance Review

Why do you need life insurance?
You don’t, the family you leave behind does.

In India, around 30% of the people do not have any health insurance. The bottom 50% are covered by government schemes and the remaining 20% are the only ones who pay for health insurance to either private or public health insurance companies. 

What is Insurance?

Pretty sure everyone knows what it means, but just to get it out of the way - Insurance is a legal arrangement between two parties, namely the ‘insurer’ and the ‘insured’, in which the ‘insurer’ pledges to pay a sum of money that the ‘insured’ is liable to get in the happening of an event that the ‘insured’ is insured against. 

If you had that “wait, what!” moment, I totally get it. Let’s simplify this, shall we?

So, the ‘Insurer’ is the organization that provides insurance policies and pays out claims. The ‘Insured’ is the person (could be people), also called the policyholder who is covered under the insurance policy. 

Today, while talking about Life Insurances, its types, benefits, and drawbacks, we will also review the Max Life Insurance parallelly and we’ll let you be the judge of choosing it (or not!)

Let’s move on to Life Insurances and its types

1. Term-Life Insurance
   This is the most favoured type of insurance. In this, one can opt for life cover for a specific ‘term’, which means the policy period. The premiums are very low and the policy period is significantly high. In the event of the death of the policyholder during this period, the nominee would receive the lump sum amount assured to the policyholder.
   What is good about the Max Life Term Insurance is that, ‘riders’ can be added to the basic plan for better benefits. These ‘riders’ include accidental death, disability, or a set of 22 or 64 critical illnesses (you can choose either of these) 
2. Whole-Life Insurance
   These are what people call the ‘traditional life insurance’. This type of insurance provides permanent death benefit coverage to the insured, which means it extends life insurance coverage until the demise of the policyholder.  
3. Endowment Plans
   Endowment plans are the ones in which apart from covering the life of the insured, it also helps them save regularly over a period of time. The money that is saved is given to the policyholder as lumpsum when the policy matures. This money is usually saved with a motive and is linked to a future event. The ‘motive’ and ‘event’ might have been obvious that we are indicating towards children’s education and ultimately marriage. 
   Naturally, if the policyholder dies in the policy term, the life cover is paid to the nominee. And if they survive, a guaranteed maturity amount is paid along with some bonus.  
4. Unit-Linked Insurance Plans
   ULIPs are a bit difficult to explain in a paragraph, so we have a completely different blog just dedicated to it. You might want to give it a read, since it is more of an investment policy that has insurance built into it. Moving in reverse gear, you see?
5. Money-Back Policy
   The name of this policy pretty much gives away what these policies do. These are also called ‘Child Money Back Plans’. It is an investment and life insurance plan typically purchased for children. In this, the insured receives a guaranteed regular return at different points in time during the policy period and lumpsum in case of an unfortunate demise of the policyholder. 

Max Life Term Insurance - Max Life Smart Secure Plus Plan

For research of this article, I inquired about the Term Insurance Plan of Max Life Insurance, name of the policy being Max Life Smart Secure Plus Plan. 

I am 23 and I selected a life cover till 70 years, of ₹50 lakhs. I will have to pay an annual premium of ₹5,151 for 38 years till I turn 60. The total premium amount I pay in 38 years is ₹1,95,738. 

When I asked the same about my 53 y.o. father, with all other criteria remaining the same, his annual premium came out to be ₹37,311 to be paid for 10 years. The amount he will be paying in these 10 years will be ₹3,73,110 for a life coverage of the same ₹50 lakhs. 

Mind you though, these premium amounts are of a non-smoker. Once you slide the toggle of ‘Tobacco/Nicotine’ on, the amount increases drastically. For now, I would not delve into those premiums, as:

Smoking is injurious to health. Tobacco leads to cancer, heart attack and other deadly diseases. None of the writers at the Finology Blog promote or support smoking. 

Finally, this is a not-to-mention, but if I die in the ‘term’ of 38 years I mentioned above, the company pays ₹50 lakhs to my nominee. If I don’t though, there is also a feature in the policy that would allow me to get back 100% of the premium I have paid on maturity of the policy. 

Features of Max Life Term Insurance

1. 100% Premium Return
   Upon the death of the policyholder, the nominee gets the sum covered. And if the policyholder survives, the premium he has paid till date is returned on the maturity of the policy. 
2. Longer Coverage duration 
   A person under Max Life Term Insurance can stay covered upto the age of 85. 
3. Premium Break
   Max Life Term Insurance offers an option of skipping premium for 2 years in the policy period, in case the policyholder has some financial troubles.
4. Pay-out Options
   During the claim, the nominee can choose the payout mode in the Max Life Term Insurance. It could be done in - Lumpsum, Monthly or Part Lumpsum and Part Monthly.
5. Joint Life option
   Max Life Insurance provides a spousal coverage too, at a nominal premium. 

Benefits

1. High Life Cover at Affordable Premiums
2. Protection from Illnesses - an add-on of 22 or 64 illnesses
3. Disability Benefits - an add-on of total & permanent disability 
4. Income Options in case of Unfortunate Events
5. Protection Against Liabilities
6. Multiple Premium Payment Options

These benefits without any doubt, are reasons good enough to get this term insurance. But just in case you need another reason:

Would you look at that? Our Chef from Recipe recommends Max Life Insurance too!

Drawbacks

• The Premium Break can be opted only when the policyholder has paid 10 full year of premiums. 
• There has to be a gap of 10 years between the first and second Premium Break as well. 
• The Joint Life option could only be availed at the inception and there is no option of Premium Break in the Joint Life Option. 
• No maturity benefit or bonus is received on maturity of the policy, if the policyholder survives through the policy period. 

Fees and Charges

Below I have attached a screenshot of the Max Life Term Insurance Plan. Please help yourself. 

The Bottom Line

The claim settlement ratio of Max Life Insurance is 99.35% for FY 20-21, which is quite great compared to other life insurance providers in our country. So be assured, this is not a company that tries to find reasons to not pay the claims.

Let us jump right back up. Notice the difference in the amount in my and my father’s plan? The difference is so significant because as the age increases, you are more likely to develop chronic diseases, and since the insurance company is agreeing to the increased risk, the premium of the same rises. 

Honest review, I don’t have life insurance yet, but I’m surely gonna get it as soon as I finish writing this, which would be NOW!