Introduction to Return of Mortality Charge (ROMC)

17th August 2018

With consumers always looking for better propositions, it is necessary for businesses to stand out from the masses. Every industry, be it financial service, consumer durable, automobile etc. has transformed themselves over the years and in the process have met the changing needs of existing and potential customers.
Life Insurance products have also evolved with the passage of time. Today they offer a houseful of living benefits beyond protection.

Life insurance policy that return what is yours
Indian life insurance companies have been innovative with ULIPs (Unit Linked Insurance Plans). For instance, one of the game changing features of the new-age ULIPs, Bajaj Allianz Life Goal Assure and Bajaj Allianz Life Goal Based Saving, is the Return of Mortality Charges (ROMC) or return of life cover charges. This one of-its-kind benefit ensures, the total amount of mortality charges deducted for life cover throughout the policy term, to be returned to the fund value when the policy matures provided all due premiums have been paid. This enhances the value of their corpus on maturity and enables customers to enjoy more returns on their investments. ROMC is not available if your policy is surrendered, discontinued or converted to paid-up. For Bajaj Allianz Life Goal Based Saving, ROMC is not available under single premium including any Top-Up premium paid on the single premium policy. To make it more rewarding, customers who opt to receive the maturity benefit in instalments (and not lump-sum) over a period of five years can avail the benefits of Return Enhancer, where each instalment amount is hiked-up by 0.5%.
This means you get more value for your investments, which takes you a step forward towards realizing your LifeGoals.

Let’s understand how Return of Mortality Charge (ROMC) work towards enhancing customers’ corpus with the help of an illustration.
Minal is a 25 year-old fashion designer with a LifeGoal of setting up her own boutique in 10 years.
She invests in Bajaj Allianz Life Goal Assure with the objective of achieving her dream.
Minal invests INR 4 lakh per annum for 10 years to avail Sum Assured of INR 40 lakh, in Pure Stock Fund II using the Investor Selectable Portfolio Strategy.

At the end of 10 years, her fund value + return of mortality charges with assumed rate of return @4% will be INR 47.4 lakh or with assumed rate of return@8%will be INR 58.9 lakh. With Return enhancer, the amounts will hike up to INR 49.8 Lakh & INR 61.8 Lakh at 4% or 8% respectively, at the end of 5 years.

As LifeGoals get more ambitious, life insurance companies are dealing with consumers who demand more from their investments. To that end, ULIP plans having above features like Return of Mortality Charges and Return Enhancer can turn life insurance plans more investor-friendly.



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