Aviva FortunePlus UnitLinked NonParticipating Individual Life Insurance Plan

The Aviva FortunePlus is a unitlinked, nonparticipating, individual life insurance plan designed for policyholders who want the security of life cover combined with the growth potential of marketlinked investments. It is suitable for individuals looking for flexibility, fund choice, and the ability to tailor premiums to their financial goals.

Key Features at a Glance

• Unitlinked structure: Premiums are invested in a range of professionally managed funds, allowing the policyholder to benefit from market performance.
• Nonparticipating: The plan does not share in the insurers surplus or participate in its profits; the value is driven solely by the underlying fund performance.
• Life cover: Provides a death benefit equal to the higher of the sum assured or the fund value on the date of death.
• Flexibility: Policyholders may switch between fund options, adjust premium amounts, or introduce additional life cover within policy limits.
• Partial withdrawals: After the policy has been in force for at least 5 years, a limited number of withdrawals may be made without surrendering the policy.
• Loan facility: Loans can be taken against the policys surrender value, subject to terms and interest rates defined by Aviva.

How the Plan Works

1. Premium Payments

Premiums are payable either annually, semiannually, quarterly, or monthly, depending on the policyholders preference. The amount paid is allocated to the selected fund(s) after deducting the cost of insurance, policy administration fees, and any applicable taxes.

2. Unit Allocation

Each premium contribution purchases units in the chosen fund(s) at that days Net Asset Value (NAV). The value of the policy fluctuates with the performance of these units. For example, if a premium of 100,000 purchases 500 units at a NAV of 200, the policys unit holding is 500 units. If the NAV rises to 250, the fund value becomes 125,000.

3. Death Benefit

If the insured passes away during the policy term, the beneficiary receives the greater of:

• The sum assured originally chosen, or
• The market value of the units (fund value) at the time of death.

This higher of clause ensures that the life cover does not diminish even if the market performs poorly.

4. Surrender and Withdrawals

After the mandatory lockin period (typically 5 years), the policyholder can:

• Make a partial withdrawal up to a specified percentage of the fund value, subject to a withdrawal charge.
• Surrender the policy entirely, receiving the surrender value (fund value less surrender charges).

Benefits of Choosing Aviva FortunePlus

• Investment Choice: Multiple fund categories (equity, debt, balanced, and moneymarket) allow customization based on risk tolerance.
• Transparency: Unit prices, fund performance, and charges are disclosed regularly, giving the policyholder clear visibility.
• Tax Advantages: Premiums paid qualify for deductions under applicable incometax provisions (e.g., Section80C in India). The death benefit is generally taxfree for beneficiaries.
• Liquidity: Partial withdrawals and loan facilities provide access to funds without terminating the policy.
• Riders: Optional riders such as Critical Illness, Accidental Death, and Waiver of Premium can be added for enhanced protection.

Charges and Fees

Being a unitlinked product, the plan incurs several types of charges:

• Policy Administration Charge: Fixed fee deducted annually for managing the policy.
• Cost of Insurance (COI): Variable charge based on age, sum assured, and health status, deducted per premium payment.
• Fund Management Expense Ratio (MER): Ongoing fee taken by the fund manager, expressed as a percentage of assets under management.
• Withdrawal/Surrender Charge: Applied if a withdrawal or surrender is made before the specified lockin period ends.
• Loan Interest: Charged on any amount borrowed against the policy.

Understanding these costs helps in assessing the net returns you can expect from the plan.

Eligibility and Application Process

Eligibility

• Age at entry: 1865years (subject to medical underwriting).
• Resident of the country where Aviva operates.
• Acceptable health status as per Avivas underwriting guidelines.

Steps to Apply

1. Obtain the proposal form either online through Avivas portal or from an authorized agent.
2. Complete personal and health details, select the sum assured, premium frequency, and fund options.
3. Submit supporting documents (proof of identity, address, age, and medical reports if required).
4. Pay the initial premium the policy becomes effective on the date of receipt of the first premium.
5. Receive the policy schedule and the first statement of fund value.

Risks to Consider

Because the policys value is linked to market performance, it carries investment risk. The following factors can affect the fund value:

• Market volatility equityheavy funds can experience large fluctuations.
• Interest rate changes impact debt and moneymarket fund returns.
• Fund manager performance MER and investment decisions affect net gains.

Policyholders should review fund performance regularly and consider rebalancing to stay aligned with their risk profile.

Illustrative Example

Assume a 35yearold nonsmoker purchases a policy with a sum assured of 5,00,000 and pays an annual premium of 1,20,000 for 20 years. The premium is allocated to a balanced fund with an average annual return of 8%.

1. After the first year, the fund value 1,20,000(1COI)(1+8%).
2. Compounded over 20 years, the fund value grows to roughly 5,20,000 (ignoring charges for simplicity).
3. If the insured dies in year 10, the benefit payable is the higher of 5,00,000 (sum assured) or the fund value at that point (2,80,000). Hence the beneficiary receives 5,00,000.
4. If the insured lives to the end of year 20, the policy matures and the full fund value (5,20,000) is paid to the policyholder.

This example illustrates how the policy protects the family with a guaranteed minimum cover while also offering upside potential.

Comparison with Traditional Participating Plans

When Is Aviva FortunePlus the Right Choice?

• You want life insurance protection **and** an investment component.
• You are comfortable with market risk and prefer the possibility of higher returns.
• You need flexibility to adjust premium payments or access funds before maturity.
• You wish to customise coverage with riders such as Critical Illness or Accidental Death.

Key Takeaways

The Aviva FortunePlus UnitLinked NonParticipating Individual Life Insurance Plan blends protection with investment. Its higher of death benefit safeguards the family against market downturns, while the choice of funds and flexible premium options cater to diverse financial goals. However, the policys performance is tied to market movements, so prospective policyholders should assess their risk tolerance and review fund options regularly.

For detailed illustrations, exact charges, and personalized advice, contact an Aviva authorized advisor or visit the official Aviva website.