Aviva Young Scholar

Agenda

- Aviva Young Scholar

- Product Construct
- Process

- Competition Benchmarking
- Feature reckoner v/s competition
- Comparing yields (IRRs)

- Selling made easy

- 4 Steps Sales Process
- 30 Seconds sales pitch
Agenda

- Aviva Young Scholar

- Product Construct
- Process

- Competition Benchmarking
- Feature reckoner v/s competition
- Comparing yields (IRRs)
Aviva Young Scholar: Product construct

Aviva Young Scholar Comprehensive Child Plan

Entry Age Parent (Life Insured): 18 – 50 years

Child (Beneficiary): 0 – 17 years
Policy Term (PT) 10 – 25 years, subject to maximum maturity age of 70 of Parent

Premium Payment Term (PPT) 3 years OR 5 years OR equal to Policy Term

Annual Premium (Minimum) Minimum: Rs 15,000 for PPT = PT, No maximum limit
Minimum: Rs 50,000 for PPT = 3 OR 5, No maximum limit

Sum Assured Minimum: 5*APE

Maximum: 1.5*PT*APE

Top up Premium Minimum Rs 1,000; total upto 25% of total regular premium

Riders Built-in: Waiver of Premium

Optional: ADB, IB, and CHB
Fund options Enhancer, Growth, Balanced, Protector, Bond

Other selling points Regular Loyalty Additions, Increase/ decrease in APE, reduce SA (Cover
Level), STP, AAA, Settlement Option
Aviva Young Scholar: Key Features

Comprehensive Death Cover

 On the death of the parent:
 Sum Assured is paid
 Future premiums are waived and credited to units account as lump sum
 Pays 10% of Income Benefit rider sum assured (if opted for) upto age 17 of child
 Beneficiary becomes the owner of the policy
 On the death of the beneficiary
 Before the parent:
 Parent can nominate another beneficiary (other child)
 If the deceased beneficiary was the only child, new beneficiary can be anybody, subject to insurable interest.
 After the parent
 Policy terminates by paying the fund value

End of Policy Year Loyalty Addition

Loyalty Addition
5th year 0.50%
 Loyalty addition is paid as a percentage of units pertaining to regular premium
 Increased premium is not eligible for loyalty addition 10th year 1.00%
 Paid by way of additional units every 5 th policy anniversary 15th year 1.50%
 All due premiums must have been paid 20th year 2.00%
25th year 2.50%
Maturity Benefit
 Fund value of regular premiums along with the fund value of top-up premiums, if any is paid
Aviva Young Scholar: Key Features

Increase / decrease premium

 You can change your premium with your changing needs or preferences
 Regular premium can be increased / decreased on any policy anniversary after 5 policy years
 A notice at least 7 days prior to policy anniversary is required to exercise this option
 Sum Assured (cover level) can also be revised while you change the premium
 Any increase in Sum Assured shall be subject to underwriting

Reduce Sum Assured (Cover Level)

 You can reduce the Sum Assured (Cover Level) without reducing premium
 The revised Sum Assured should not be less than the minimum SA allowed (5 times)
 This option can be exercised on any policy anniversary
 A notice at least 7 days prior to policy anniversary is required to exercise this option

Partial Withdrawals
 Partial withdrawals can be made first from the top-up account, if eligible, and then from the regular premium account
 Allowed after 5 policy years from the regular premium account
 Minimum withdrawal allowed is Rs. 5,000/-, Maximum partial withdrawal can be upto 25% of the Fund Value
 The upper limit is not applicable in last 2 years
 Withdrawal from top-up account is allowed after 3 years from the date of top-up
 There is no upper limit for withdrawal from top-up amount, if eligible
Aviva Young Scholar: Key Features

Riders
 Built-in
 Waiver of Premium:
 Pays future premiums - credited to your unit account as a lump sum

 Optional
 Accidental Death Benefit (ADB) rider:
 Pays additional SA equal to rider SA in the event of accidental death
 ADB rider SA = base SA, Max SA = lower (base SA, Rs. 50L)
 Comprehensive Health Benefit (CHB) rider:
 Pays SA as lump sum in the event of permanent total disability or any of the Critical Illnesses covered.
 Pays future premiums - credited to your unit account as a lump sum (subject to a maximum of Rs.25 Lacs)
 CHB rider SA = base SA, Max SA = lower (base SA, Rs. 20L)
 Income Benefit (IB) rider:
 Pays 10% of IB rider SA to the appointee till age 17 of beneficiary.
 IB rider SA = base SA, Max SA = lower (base SA, Rs. 10L)
 Riders can be taken at inception only
 The ADB, CHB and IB rider cover expires at age 60
 All riders including built-in Waiver of Premium will cease if policy is under premium discontinuance mode.
Aviva Young Scholar: Fund Options

Fund Fund Composition and Objective

Protector
Equities 0-20% To generate steady returns with minimum exposure to equities
Debt instruments 60-100%
Money Market 0-40%

Balanced
Equities 0-45% To generate a balance of capital growth and steady returns
Debt instruments 50-90%
Money Market 0-40%

Growth
Equities 30-85% To generate long term capital appreciation with high equity
Debt instruments 0-50% exposure
Money Market 0-40%

Enhancer
Equities 60-100% To generate aggressive, long term capital growth with high equity
Debt & Money Market 0-40% exposure

Bond
Equities 0% To generate a steady income through investment in high quality
Debt & Money Market fixed income securities
100%
Aviva Young Scholar: Fund Related Options

STP (Systematic Transfer Plan)

 Allowed at any policy anniversary – only for annual premium frequency policies
 Option of a weekly or a monthly STP
 Systematic switches from Protector to Enhancer will be carried out free of charge
 No other switches into or from Protector fund are allowed during this period
 Option to close and restart STP on policy anniversaries
 STP can not be opted along with AAA

AAA (Auto Asset Allocation)

 Allowed at inception for the policies with annual premium frequency
 Automatic decrease in equity exposure and increase in Debt instruments over time
 To leverage the returns from equity market and book the profits by way of AAA
 Initial allocation in Enhancer and Bond Funds to be chosen by the policyholder
 Auto switching and redirection of future premiums by fixed percentage between Enhancer and Bond Funds
such that at the end of the policy term 100% fund is in Bond fund
 All switches under AAA are free of charge
 No other switches into or from Bond and Enhancer funds are allowed during this period
 There is an option to stop AAA on any policy anniversary
 On opting out of AAA, all 5 fund options will be available
 AAA can not be opted along with STP
Aviva Young Scholar: Key Features

Switching between funds

 Switching between the 5 unit linked funds allowed, anytime, any number of time
 Minimum switch amount and balance after (part) switch: Rs 5,000
 First 4 switches in a policy year are free of charge; 0.5% of amount switched (max Rs 500) for subsequent
switches

Premium re-direction
 Change of allocation proportion of future premiums allowed, anytime, free of charge
 Premium redirection is allowed upto 2 times a year
 Minimum allocation in each selected fund must be 10%

Settlement Option
 Allowed if all the due premiums are paid
 Minimum proportion for opting this option is 25% of maturity value
 Paid as structured payouts over 1 to 5 years
 Payout frequency can be Yearly / Half-yearly / Quarterly or Monthly
 No charges except the Fund Management Charges shall be levied during the payout term.
Aviva Young Scholar: Charges

Premium Allocation Charge (100 – Allocation Rate)

 Aviva Young Scholar: Charges

Fund Management Charge

 Bond Fund 1.00% p.a.
 Protector Fund 1.00% p.a.
 Balanced Fund 1.25% p.a.
 Growth Fund 1.50% p.a.
 Enhancer Fund 1.75% p.a.

Policy Administration Charge

Rs. 55 per month
Admin charge will increase by 5% p.a. from 1st January each year

Surrender Charge for regular payment policies (as a %age of regular premium units)
If less than one policy year’s premium has been paid 100%
If exactly one policy year’s premium has been paid 90%
If more than one but up to two policy years’ premium has been paid 60%
If more than two but up to three policy years’ premium has been paid 30%
If more than three but up to four policy years’ premium has been paid 20%
If more than four but up to five policy years’ premium has been paid 5%
If more than five but up to eight policy years’ premium has been paid 1%
If more than eight policy year’s premium has been paid Nil
 Aviva Young Scholar: Charges

Surrender Charge for PPT = 3 years (as a %age of regular premium units)
If less than one policy year’s premium has been paid 100%
If exactly one policy year’s premium has been paid 90%
If more than one but up to two policy years’ premium has been paid 20%
If more than two but up to three policy years’ premium has been paid 10%
If full three years’ premium are been paid Nil

Surrender Charge for PPT = 5 years (as a %age of regular premium units)
If less than one policy year’s premium has been paid 100%
If exactly one policy year’s premium has been paid 90%
If more than one but up to two policy years’ premium has been paid 20%
If more than two but up to three policy years’ premium has been paid 10%
If more than three but up to five policy years’ premium has been paid 5%
If full five years’ premium has been paid Nil
Aviva Young Scholar: Illustration

Following are the projected maturity values for a male aged 30 years, who pays premiums yearly and invests
100% into Protector Fund

The values illustrated above are excluding the Service Tax

Aviva Young Scholar - Process

Underwriting Maximum Premium allowed under DGH / Non-Medical

Indicative DGH Limits
SA = 5*APE (Min Cover)
Aviva Young Scholar is allowed as underwriting as Policy Term upto age 35 age 36 - 45
well as a DGH product 10 142857 35714
Parent will be the Life Insured (Self only – 15 105263 26315
20 83333 20833
Proposer not allowed)
Minor child will be the beneficiary – to be filled in Indicative Non - Medical Limits
the nomination column. This makes Appointee SA = PT*APE (Customer Defined)
mandatory. Policy Term upto age 35 age 36 - 45
10 52631 26315
Third party payments allowed as per existing 15 34482 17241
rules. 20 25641 NA

DGH is allowed without riders. (Waiver of Indicative Non - Medical Limits

premium is allowed since it is built-in) SA = 1.5*PT*APE (Max Cover)
Policy Term upto age 35 age 36 - 45
TASA should be calculated using the grid
10 41666 20833
attached in the ops circular 15 27397 NA
Non-Medical limits are different for with CHB and 20 20408 NA
without CHB policies (refer u/w guidelines)
Above figures are for policies without rider.
Housewife with SA>5Lacs is allowed under NUP
form only – fully underwritten, subject to NA means not allowed (Less than minimum premium)
submission of proof of graduation and proof of
The TASA allowed basis DGH is :
equivalent or higher SA on Husband.
Upto age 35: 20 Lacs
Age 36 to 45: 5 Lacs
** For detailed underwriting rules, please refer the
underwriting guidelines. TASA = Sum Assured + WoP(ADB, IB & CHB Not allowed)
Agenda

- Aviva Young Scholar

- Product Construct
- Process

- Competition Benchmarking
- Feature reckoner v/s competition
- Comparing yields (IRRs)

-
Aviva Young Scholar – Feature reckoner v/s competition

ICICI-Pru Kotak HDFC

Aviva Birla Sun Life Max Newyork Life
Name Of Plan Smart Kid New Unit Headstart Future Unit Linked Young
Young Scholar Children's Dream Plan Smart Steps Plus
Linked Protect Star Plus II
Cover on parent Y Y Y Y Y Y

Cover on Child N N N Y N N
Y
Y.
Y 100% paid into
Units added as & Y
100% paid into Y fund as lump sum Y
WoP when due. Paid as and when
fund as lump Paid as and when due OR spread over 5 Paid as and when due
50% paid into Fund due
sum years, paid semi-
and 50% as IB benefit.
annually
Y
Income Benefit Rider Y Y N N Part of WoP Not an optional rider,
this is built-in.

Y
Choice of Death cover - Y
CI Rider Y N Y N
1. Death only Built-in.
2. Death+CI.

ADB rider Y Y Y Y N N

Y. Limited to Rs 5,000
Increase Premium Y N N Y N
only

Decrease Premium Y N N N Y N

Increase SA Y N N Y N N

Decrease SA Y N N N N N

Partial Withdrawal After 5 yrs After 5 yrs After 3 yrs After 3 yrs After 3 yrs After 5 yrs

Y Y (R). End of 10/15

Loyalty addition N N Y (R). Every year. N
Every 5 years & 20 yrs

Limited PPT Y N Y N N N

(R) Regular
(M) @ Maturity •Aviva Young Scholar stands out as most comprehensive child plan.
Comparing yields

Policy Term – 10 years Policy Term – 15 years

K ota k K ota k
B irla HD FC UL B irla HD FC UL
Aviva Young IC IC I H ea ds ta rt Aviva Young IC IC I H ea ds ta rt
Ag e IR R @ a g e C hildren's Young S ta r Ag e IR R @ a g e C hildren's Young S ta r
S chola r s m artK id F uture S chola r s m artK id F uture
D rea m P la n P lus II D rea m P la n P lus II
protect protect
1237635 1197763 1235548 1193895 1,117,175 2149004 2,059,281 2,154,257 2,031,055 1,932,262
IR R -6% 3.84% 3.26% 3.81% 3.20% 2.00% IR R -6% 4.37% 3.87% 4.40% 3.62% 3.10%
30 yrs 30 yrs
1541423 1491006 1536069 1492347 1,374,461 3010143 2,878,413 3,007,739 2,847,974 2,666,363
IR R -10% 7.74% 7.15% 7.68% 7.17% 5.71% IR R -10% 8.30% 7.79% 8.29% 7.59% 6.90%
1229542 1190260 1229901 1191823 1,113,232 2125755 2,039,104 2,138,362 2,005,984 1,921,145
IR R -6% 3.72% 3.14% 3.73% 3.12% 1.94% IR R -6% 4.24% 3.75% 4.32% 3.50% 3.03%
35 yrs 35 yrs
1531571 1481843 1529207 1489875 1,369,696 2978817 2,851,292 2,986,274 2,813,281 2,651,754
IR R -10% 7.62% 7.04% 7.60% 7.09% 5.65% IR R -10% 8.18% 7.68% 8.21% 7.50% 6.84%
1214166 1175940 1219489 1185296 1,105,185 2082311 2,001,456 2,108,520 1,973,671 1,898,673
IR R -6% 3.50% 2.93% 3.58% 2.97% 1.81% IR R -6% 4.00% 3.53% 4.15% 3.33% 2.89%
40 yrs 40 yrs
1512669 1464316 1516372 1481944 1,359,935 2919719 2,800,447 2,945,747 2,768,823 2,622,081
IR R -10% 7.41% 6.83% 7.45% 6.95% 5.52% IR R -10% 7.95% 7.47% 8.05% 7.31% 6.71%

Policy Term – 20 years

K ota k
B irla HDFC UL •Aviva Young Scholar is clearly superior than ICICI,
Aviva Young IC IC I H ea ds tart
Ag e IR R @ a g e
S chola r s m a rtK id F uture
C hildren's
D ream P la n#
Young S ta r
P lus II
Birla and HDFC child plan.
protect
3319305 3,134,131 3,347,578 2,597,527 2,941,645
IR R -6% 4.61% 4.11% 4.68% 3.73% 3.54%
30 yrs
5284846 4,968,487 5,307,880 3,919,244 4,596,540
IR R -10% 8.56% 8.04% 8.59% 7.69% 7.39% Assumptions:
3262330 3,087,769 3,308,323 2,569,238 2,914,702 Age: as indicated
IR R -6% 4.46% 3.97% 4.58% 3.61% 3.46% FMC: 1% (HDFC is 1.25%)
35 yrs
5200211 4,899,356 5,249,623 3,877,422 4,558,359 SA: 5*APE
IR R -10% 8.42% 7.93% 8.50% 7.59% 7.32% APE: 100,000
3161824 3,006,957 3,237,865 2,521,890 2,863,270

40 yrs
IR R -6% 4.18% 3.74% 4.39% 3.41% 3.30% Pl Note:
5047616 4,777,130 5,143,382 3,807,537 4,484,311 * HDFC Std. doesnot show the illustration
IR R -10% 8.18% 7.72% 8.33% 7.39% 7.19%
# BSLI CDP figs for 18 years term
Thank You