What is Max Life Term Insurance | Term Plan Meaning & Benefits

Max Life Term Insurance

Term insurance is a pure life insurance product that protects the insured financially. The beneficiary receives a death benefit as stipulated by the chosen term insurance plan if the insured dies during the policy period.

What is Max Life Term Insurance

EXAMPLE: For the following 25 years, a 24-year-old healthy, non-smoking male can acquire a cover of Rs. 1 crore for his dependents. He will pay around Rs. 537 per month, exclusive of taxes, if he purchases a term insurance policy (Premium for Max Life OnlineTerm Plan). If he died suddenly and his dependents received the full benefit, the total payoff would be Rs. 1 crore x 25 years = Rs. 25 crores Plus Rs. 537 each month (taxes included) = Rs. 1,22,50,000. (Rs.1 crore x 24 years at 20% tax)

The term insurance plan offered by Max Life is a pure life insurance policy that offers its policyholders a lifetime cover for their dependents in case of death during the term period for which it was purchased. The insurance company also offers other plans, such as the Max Life term plan (Max Life Terms Plan), Max Life Quick1Plan, Max Life Quilt Plan for high net-worth individuals as well as small savings. The term insurance covers all types of deaths except were declared by the policyholder. 

The term insurance policy offered by Max Life provides for the payment of a death benefit equivalent to the sum insured under Rs. 1,00,000/- (twenty Lakhs) in case of death at any time during the term period and in the event of a critical illness.

Max Life term insurance is a pure life insurance policy that provides coverage for one's dependents in case of death during the life of the insured (the "term period"). The term insurance plan is also marketed as Max Life Term Plan or Max Life Terms Plan depending on whether it is an online or offline plan.

The policyholder has the option of choosing the term (duration) for which the insurance shall be effective, subject to a minimum of five years and a maximum of 30 years. For example, if one were to choose a term period of 25 years, they would be eligible to receive benefits if he died during those 25 years from the date of taking up the policy. 

The sum insured under the Max Life policy can be chosen from a list of options for different age brackets, ranging between Rs. 10 lakhs and Rs. 1 crore at 10 lakhs increments. The premiums are also calculated at varying age brackets with younger individuals being charged a lower premium as compared to older individuals who are charged higher premiums. 

Premiums for Max Life term insurance plans are calculated based on the average value of all deposits put into the insurance company, which is calculated every 31 days, by a computerized process. This calculation also takes into account the premium that would be required to be paid by the policyholder for a pure term plan (without an option for life cover) over and above the sum insured under his plan. 

For example, if an individual’s Max Life term policy provides coverage of Rs. 5 lakhs with a term period of 25 years and he was to choose an amount of Rs. 1 crore as his insured amount and pay Rs. 537 per month for 25 years, he would be the owner of a pure term plan for Rs. 537 per month with a sum insured of Rs. 1 crore.

Consequently, the premium rate is calculated based on a blended premium that would be paid by an individual who would subscribe to both a pure term plan and life insurance plan from Max Life.

The premiums are computed by dividing the average value of all deposits put into the insurance company during any given month by 16 (as there are 16 payouts every year) and multiplying it by 0.0035 (as this is the maximum tax payable on an annual premium). 

What is Max Life Term Insurance

The formula to calculate the premium is as follows

The total amount payable by the policyholder is inclusive of taxes, which are calculated at 20%. Since the premium depends on various factors such as age, sum insured and the term period, it is advisable that one take a term plan quote from their Max Life sales representative before taking up a policy.

The following table explains how premiums for Max Life's term insurance plans are calculated. 

One can choose to pay for their Max Life plan either through SBI or through a branch of any of Max Life's own Bank Branches (called 'Max-SBI Bank Branches'). Payments can also be made through cheques and demand drafts. 

Max Life has its own Max-SBI Bank Branches. Services range from those listed in the table below and can be sourced through this link: https://www.maxlifestore.com/max-sbi-branch

One can opt to pay for their Max Life plan either through their bank or by using a Direct Debit (from any branch of any of Max Life bank branches). There is a monthly payment option as well. 

Online term insurance plans have emerged as a preferred choice for many policyholders, who prefer the flexibility that an online plan offers over traditional term plans offered by other term insurance companies. Many of the large insurance companies offer their plans through portals that they own – like Max Life. 

Max Life's online term plans are available to individuals between the ages of 15 and 64 years. The minimum sum insured is Rs. 10 lakhs and the maximum sum insured is Rs. 1 crore at ten lakh increments. The sum insured can be chosen from a list of options for different age brackets, which range between Rs. 10 lakhs and Rs. 1 crore at 10 lakh increments (for example, if one were to choose a term period of 25 years, they would be eligible to receive benefits if he died during those 25 years from the date of taking up the policy).

The premium rates for online term plans are calculated very similarly to how they are calculated for offline term plans. Taxes are charged at 20%. 

Online term policyholders have the option of choosing a term period ranging between 5 and 30 years, also subject to a minimum of five years and a maximum of 30 years. 

Two online plan options exist on Max Life's website – Max Life Flexi Term Plans (for ages 15-64) and Max Life Super Saver Plans (for ages 65 and above). This table defines these two options:

The policies offered by Max Life for individuals aged 15 - 64 constitute their Flexi Term Plan.

Their Super Saver Plan is an online life insurance plan with an insurance sum insured of Rs. 1 crore with a term period of 5 years.

In response to the substantial increase in the number of policyholders who have taken up online term plans, Max Life has introduced an offline option as well – which they dub as ‘Max Life Online Insurance’. This online insurance facility offers a combination of ‘Flexi Term Plans’ and ‘Super Saver Plans’ (online life cover for ages 15-64 and ages 65 and above). Customers can opt for a term period ranging between 5 and 30 years depending on their choice of plan. The premiums for these plans are the same as those for the online term policies. 

What is Max Life Term Insurance

The following table gives further information about the two options available for offline term plans

Max Life also offers a coverage option that is unique to it, called Max Life Whole Life Plus (WLP) plan. These plans are available only as offline policies. In certain cases, WLPs could prove to be more beneficial than an online policy. The benefits of these plans help in creating an educational security fund (ESF). 

Ages 10–65 years is considered the start of a person's earning career and this is when most life insurance products are bought. For this age group, Max Life has a product called Max Life Startup Policy (also called ‘Max Life Fund’).

In addition to their products, Max Life offers its customers the chance to insure risks with third-party reinsurers. This option is particularly attractive for employers as they can offer their employees a whole range of insurance cover through Max Life. Third-party insurance constitutes a large percentage of the company's business and Max Legem is among the leading providers in this segment. 

Max Life's parent company, Max Legem Ltd., was incorporated in 2003 as Delhi-based Helios Insurance Company Ltd. and was listed on the Main Board of the Bombay Stock Exchange in 2004. Helios Insurance Company Ltd. has been wholly owned by Max Life since 2005 when Max Legem Ltd. acquired all the shares of the Delhi Branch that Helios had held before its acquisition by Max Life in 2003. 

Helios Insurance Company Ltd.'s mission is to protect against short, medium, and long-term risks while maximizing returns on investments through a wide range of products and services that are tailored to meet individual risk profiles. Its profit-making insurance products include life insurance, general liability insurance, and health and accident cover among others. 

Helios Insurance Company Ltd. has been listed on the Indian bourses since 2003 but was delisted from the National Stock Exchange in 2006. It is a subsidiary of Max Life Ltd., a leading insurance company with more than 30 years of experience in the field of life insurance and financial services. 

Max Legem Ltd.’s subsidiary Helios Insurance Company Ltd. is a member of the umbrella body for Mumbai Stock Exchange & NSE Clear Investment Experts Pvt. Ltd. (CIE), as categorized by National Securities Depository Limited, New Delhi under Directive RBID/DPSC/MSEA dated 27-10-2003, Ministry of Finance, Government of India & Ministry of Corporate Affairs, Government Of India.

What is Max Life Term Insurance

The founders of Helios Insurance Company Ltd. are:

Max Life was registered as an Indian company in February 2005 and moved its seat to Chennai in March 2006. The company has made investments of over Rs. 2.85 billion in the country since its inception.

In 2011, Max Life registered itself with the Reserve Bank of India (RBI) as a Non-Banking Financial Company (NBFC).

This status is usually only granted to NBFCs based on their business model and compliance record. Its business model is such that it offers more than one product to policyholders and this qualifies it to apply for this status from RBI.

In September 2012, it entered into a partnership with Standard Chartered Bank to offer its customers a personal overdraft facility and credit card.

Max Life is part of the Max Group, India's largest financial services group by market capitalization. The publicly listed flagship company of the Group, Max Financial Services Limited is an integrated financial services conglomerate with an IT-enabled business model. 

What is Max Life Term Insurance

The other subsidiary companies in the Group include

Max India BFSI Pvt Ltd: This company offers customer-friendly end-to-end retirement planning services for individuals and organizations through multi-lateral Fund Structured Solutions. The company was incorporated in 2010 and is part of the listed Max Group. 

Max Life Insurance: This insurance company is wholly owned by the Max Group and offers a range of products from the term, life, and general insurance to health & accident cover. It was incorporated as Helios Insurance in 2003 and went public in 2006.

Max Life Securities: Established in 1999, this group company provides innovative financial services for corporate entities & individuals to achieve personal goals by channelizing investments to attain better outcomes from strategies based on business growth. 

Max Finance Finance Inc.: In 2005, Max Financials Limited acquired the majority of its holding in Max Finance Ltd., a sister concern it had founded in 1998, which provides branded financial services to corporate organizations and individuals through multi-lateral Fund Structured Solutions. 

Max Asset Management Services Ltd.: This company provides asset management and financial consulting services to its clients through multi-lateral Fund Structured Solutions. The Company was incorporated in 2004 and is part of the listed Max Group. 

Max Capital Services: This company provides equity broking, securities trading, and financing services to investors, both corporate and retail through multi-lateral Fund Structured Solutions. It was incorporated in 2010 and is a subsidiary of Max Financials Limited.

In July 2013, FAIRR (Financial Access Initiative of Retail Research) India released a report that ranked Max Life as the most innovative life insurance provider in the country with an overall score of 3.74 out of 5 possible points on the innovation index. The index was designed by FAIRR to assess the degree of innovation in the insurance industry. 

FAIRR index is built on the broad areas of innovation: business model, channel strategy, consumer interaction, technology, and product. The indices are based on a survey that was conducted across six cities - Delhi, Mumbai, Kolkata, Chennai, and Bangalore - on more than 4500 households over one month. 

FAIRR's study categorized Max Life as a Tier 1 company among life insurance companies that have grown and expanded by innovating with new products in the market.