- Decide your premium amount, policy term and the premium payment term
- Select the Sum Assured Multiple as per your protection needs
- Choose an investment option based on your financial needs
- On maturity of your policy, receive your maturity benefit as a lump sum or as a structured payout through settlement option to meet your financial goals
- In case of your unfortunate death during the policy term your nominee will receive the death benefit
Let’s take an example:
Suresh, aged 35, is a successful entrepreneur who opts for Reliance Nippon Life Premier Wealth Insurance Plan with annual premium of Rs. 2,50,000 under regular pay option with a policy term of 20 years along with a life cover of Rs 25,00,000.
Suresh is aware of the benefits of investing over the long term. He knows his investments in Reliance Nippon Life Premier Wealth Insurance Plan will be enhanced through Wealth Boosters at 0.30% p.a (for Regular Pay option) of the average of daily fund value from the end of the eighth policy year.
The addition to Suresh’s Fund Value by way of Wealth Boosters, from the end of eighth year onwards, is as given in the table below:
|
Assumed rate of return(%)/Policy Year
|
Additions to fund through Wealth Boosters
|
|
8th
|
9th
|
10th
|
11th
|
12th
|
13th
|
14th
|
|
@ 8%
|
Rs. 7,374
|
Rs. 8,614
|
Rs. 9,937
|
Rs. 11,347
|
Rs. 12,852
|
Rs. 14,556
|
Rs. 16,167
|
|
@ 4%
|
Rs. 6,279
|
Rs. 7,182
|
Rs. 8,110
|
Rs. 9,064
|
Rs. 10,043
|
Rs. 11,049
|
Rs. 12,083
|
|
Assumed rate of return(%)/Policy Year
|
Additions to fund through Wealth Boosters
|
|
15th
|
16th
|
17th
|
18th
|
19th
|
20th
|
Total Additions
|
|
@ 8%
|
Rs. 17,992
|
Rs. 19,939
|
Rs. 22,014
|
Rs. 24,228
|
Rs. 26,590
|
Rs. 29,108
|
Rs. 2,20,619
|
|
@ 4%
|
Rs. 13,144
|
Rs. 14,234
|
Rs. 15,354
|
Rs. 16,503
|
Rs. 17,684
|
Rs. 18,897
|
Rs. 1,59,626
|
# This illustration is for Life Equity Fund 3 and Life Pure Equity Fund 2
Let’s look at five different scenarios after Suresh invests in this policy:
Scenario 1: Suresh does not get enough time out of his business and cannot manage his investments actively; therefore he opts for Target Maturity Option under Auto-Managed options.
This strategy automatically manages his investments by changing the allocation between the debt and equity funds based on a predefined schedule. Starting from the sixth policy year, as the time to maturity and to fulfill his financial goals draws closer, his investments are moved
Scenario 2: Suresh likes to take control and thus opts for the Self-Managed option. He decides to invest in Life Equity Fund 3, since he believes the equity markets will be bullish in the coming years. He stays invested till maturity of the policy. The expected benefit received by Suresh is as follows:
|
Premiums paid (Rs.)
|
Fund Value at maturity
|
|
Annual amount
|
Total amount paid
|
@8%
|
@4%
|
|
Rs 2,50,000
|
Rs. 50,00,000
|
Rs. 1,00,05,620
|
Rs. 63,84,968
|
Scenario 3: After three years of staying invested in the Life Equity Fund 3, Suresh feels that equity market will be going down soon due the recent turmoil within the economy. He switches his investment to Life Corporate Bond Fund 1. He has thus locked in the returns from the rise in the equity markets and is now enjoying stable returns from the bond market.
Scenario 4: At the end of the tenth policy year, Suresh decides to purchase a new car by utilizing his investments in this plan. He makes a partial withdrawal of 25% of his Fund Value.
|
Premiums paid (Rs.)
|
Fund Value at end of year 10
|
Partial withdrawal of 25% of Fund Value at end of year 10
|
|
Annual amount
|
Total amount paid in 10 years
|
@8%
|
@4%
|
@8%
|
@4%
|
|
Rs. 2,50,000
|
Rs. 25,00,000
|
Rs. 34,14,492
|
Rs. 27,39,056
|
Rs. 8,53,623
|
Rs. 6,84,764
|
Scenario 5: In the third policy year, Suresh dies in an unfortunate accident. His wife, who is his nominee, gets the Death Benefit.