Date:13/02/2005 URL: http://www.thehindubusinessline.com/bline/iw/2005/02/13/stories/2005021300191400.htm

Back Met Advantage from MetLife

Nath Balakrishnan

INSURANCE plans that aim at providing the policyholder with a corpus to ensure that his post-retirement years are spent sans any financial hassles have, of late, been quite popular.

With the launch of Met Advantage, MetLife Insurance is also staking its claim for a piece of the action in the unit-linked pension plans space. Let's take a look at a few of the key features of this policy. The policyholder would be required to pay premiums over the term of the plan, which spans from the age at entry to the vesting age. Premiums payments can be either single or regular.

In the case of such plans, a policyholder should consider entering at a relatively young age and endeavour to pay premiums over an extended term; the effect of compounding will work in his favour to ensure that he has a sizeable corpus at his disposal at the time of retirement.

Further, in case the policyholder has additional liquidity in a particular year, can be invested in this plan.

The plan also provides for the policyholder to defer his date of vesting, provided the postponed date is within the maximum vesting age under the policy. Such a deferment should be utilised when at least six months remain for the policy to vest.

Fund choices

The premiums paid, after deduction of certain charges, are invested in one of six funds offered by MetLife.

At one end is the multiplier fund, which invests all the funds in equities, and would be suitable for those who have an appetite for a higher risk; at the other end, there is the preserver fund, which invests exclusively in government securities and carries the lowest risk profile.

Funds in between carry progressively varying degrees of risk, with matching return profiles.

Annuity options

At the time of vesting, the policyholder has the option to invest the entire value of the units in an annuity of his choice, or he could commute up to a third of the unit value and buy an annuity with the remaining amount.

The policyholder could choose from one of seven annuity options available. The annuity rates would differ depending on the type of annuity chosen.

The policyholder also has an open market option when it comes to buying the annuity — he could buy it from any other provider in the market.

Readers are requested to compare products featured under this column with similar ones offered by other players.