All about Life Insurance!

Reliance guaranteed return plan offers you GR of 6.85% compounding annually in addition it invest your money in secured instrument which provides you a chance to earn even more then 6.85% return. Premium paid is eligible for tax benefit under 80(c) and maturity amount is tax free.

Reliance Guaranteed return plan is in 2 different flavors.

• Reliance Guaranteed Return Plan Series I – Insurance
  Assured Returns + Life cover

You will get your money back at the end of term

• Reliance Guaranteed Return Plan Series I - Pension
  Assured Returns + Pension, Your money is returned back in the form of pension.

Let us do a quick review of both the plans.

Features:

*Check death benefit.

Guaranteed Maturity benefit:

Single premium net of Mortality charge, Policy administration, and allocation charge and service tax on these charges is invested in the Guaranteed Bond Fund Series I at

the inception. No charges are deducted thereafter through cancellation of units.

For eg. Out of Rs. 50,000 single premium paid if charges are Rs. 2000 then GMB is 6.85% compounding interest on Rs. 48,000.

So good part of this policy is apart from GR you have a chance to earn even higher return, This feature makes it unique from LIC’s Jeevan Astha and Aegon Religare Guranteed Return plan. However GMB is calculated on amount which is less of charges and GR is only 6.85%.

Maturity Benefit.

On maturity of the policy, the maturity value is payable. The maturity benefit will be maximum of Fund value and the guaranteed maturity benefit.

Death Benefit:

Sum Assured (less all partial withdrawals made during the

24 months prior to the date of death) Plus the Fund Value

as on the date of intimation of death will be paid in case of insurance option.

In case of pension option it would be fund value during first four year and max of fund value/GMB during 5^th policy year

Fund option:

It provides a single fund which invest entire money in Bank Deposits/Money Market Instruments/Gilts/ Bonds and Debentures and other Corporate

Debt Papers

Charges:

All the charges are one time apart from fund management charges which is deducted each year.

Allocation charges:

Depending on premium it is 3% to 4%.

Fund management charge:

It is 1.50% of each unit.

Mortality charge:

Depends on age/insurance cover/occupation/ and will be deducted only in insurance option.

Policy admin. Charges:

Policy administration charge of Rs.500 will be deducted at the outset from the single premium before allocation of units.

For eg. If person whose age is 25 year, invests Rs. 50,000 in insurance option then charges will be

Allocation charge: Rs. 2000.

Policy admin. Charge:Rs. 500.

Fund manag. Charge:755.

Amount invested is 50,000 – 3255= 46745.

On this amount GMV Rs. 66,156.

Surrender/Partial withdrawal charges:

For first 3 year it is not allowed.

In 4^th year 10% of fund value is deducted and in 5^th year 6% of fund value is deducted.

This makes it poor at liquidity front.

Conclusion:

In term of overall Guaranteed return this policy falls flat compared to Jeevan Astha and AR’s GR plan as return is calculated after deducting charges.

In many cases in Jeevan Astha one end up paying higher of MV however return is high between 7 to 8%.

Only interesting part is chance to earn high as it is market linked.

If you are looking for GR then opt for Jeevan Astha or AR Guaranteed return plan instead.