Investment Plans 766 views December 1, 2020

Reliance Nippon Life Fixed Savings

For the future, you must create savings for unforeseen events such as medical emergencies, education funding, etc. And with Reliance Nippon Life Fixed Savings, this has become much easier. The insurance allows a systematic saving for you with Guaranteed Benefits, fixed addition, and a lump sum amount at maturity. Along with all these financial benefits, the plan also offers a life cover that protects your family in your absence. Read the post to have detailed information about several benefits of this plan.

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Maturity Benefit

On the life assured’s survival till the end of the policy term, the company will pay him/her a Guaranteed Sum Assured on Maturity equaling the Annualized Premium x Premium Payment Term. And the Fixed Maturity Addition is equal to the Maturity Factor x Annualized Premium. A Maturity Factor is a percentage of the Annualized Premium, which will depend on the Life Assured age at the time of Policy inception, premium payment term, policy term, and the chosen death benefit.

Death Benefit

In case the Life Assured dies during the Policy Term and the Policy is in force, the nominee will get the higher of the following:

  1. Sum Assured on death
  2. 105% of all the paid premiums, except the underwriting extra premiums + Accrued Fixed Regular Additions

Sum Assured on Death is one of the following, whichever is higher:

  1. Annualized Premium x Death Benefit multiple
  2. Guaranteed Sum Assured on maturity

Death benefit options can be chosen based on the entry age, premium payment term, and policy term. You can choose the death benefit option at inception and it cannot be changed during the policy term.

Fixed Regular Additions

An Accrued Fixed Regular Addition will be payable on the first day of the last policy year, provided the life assured has survived till the end of the policy term and all due premiums have been paid. It is a percentage of Annualized Premium that will accrue at the start of each policy year.

Riders

For an additional cover, you can opt for a rider in your Reliance Nippon Life Fixed Savings to get covered for specific unfortunate events. The following are some of the riders that are available with this plan at a nominal cost.

  1. Reliance Nippon Life Term Life Insurance Benefit Rider: Under this, you will get an additional death benefit as per your selected rider Sum Assured.
  2. Reliance Nippon Life Major Surgical Benefit Rider: A lump sum will be provided for surgical expenses from the list of 33 surgeries like open-heart surgery, kidney transplant, cornea transplantation, transplant of lungs, and more.
  3. Reliance Nippon Life Critical Conditions (25) Rider: A lump sum is provided to take care of 25 critical conditions such as cancer, heart attack, paralysis, major organ transplant, etc.
  4. Reliance Nippon Life Family Income Benefit Rider: A monthly payout of 1% of the Sum Assured is provided every month from the date of death till the end of the rider policy term or 10 years (whichever is later). This is applicable in the event of death or total and permanent disablement due to an accident or sickness, before the maturity of the base policy.
  5. Reliance Nippon Life Accidental Death Benefit Rider: A lump sum equal to the rider sum assured is provided to the nominee upon the death of the life assured due to accidents.
  6. Reliance Nippon Life Accidental Death and Disability Rider: A lump sum equal to the rider sum assured is provided in the case of accidental death of the life assured. Whereas in the case of total and permanent disablement, an amount equal to the rider sum assured will be payable in annual installments.
  7. Reliance Nippon Life Accidental Death and Disability Plus Rider: A lump sum equal to the rider sum assured in case the life assured dies in an accident. Whereas in the case of total and permanent disablement, an amount equal to the rider sum assured will be payable in annual installments along with the waiver of future premiums under the base plan.

Surrender

For certain circumstances, you may need to surrender your policy. And the policy must acquire a Surrender Value for you to do os. For premium payment terms of 5 & 7 years, you can surrender the policy if the premium for the first 2 Policy Years has been paid in full. Whereas for a premium payment term of 10 years, you can surrender the policy if premiums for the first 3 Policy Years have been paid in full.

The Surrender Value is higher than the Guaranteed Surrender Value or Special Surrender Value.

Guaranteed Surrender Value (GSV): Reliance Nippon Life Fixed Savings Guaranteed Surrender Value (GSV) will be acquired as follows:

Guaranteed Surrender Value = Total paid premiums except for premium towards GST, rider, and underwriting extra (if any) – Accrued Fixed Regular Additions x GSV Premium Factor + Cash value of Accrued Fixed Regular Additions.

In the above formulae, Cash value of Accrued Fixed Regular Additions = Accrued Fixed Regular Additions x GSV Addition Factor.

Special Surrender Value (SSV): Reliance Nippon Life Fixed Savings Special Surrender Value is based on the policy’s expected present value of Guaranteed Sum Assured on Maturity and Accrued Fixed Regular Additions (which is applicable at the time of surrender).

The company provides the Special Surrender Value factors if it is approved by the IRDAI, and it will be made available at the request of the policyholder.

Note – The Policy will terminate once it is surrendered

Free Look Period

Policyholders will have a period of 15/30 days within which they can return the policy if they don’t agree to the company terms and conditions as laid down in the policy. In such a case, the company will refund your paid premiums by deducting the proportionate risk premium, medical examination costs and stamp duty charges.

Note – For the Distance Marketing Mode, the free look period is of 30 days otherwise it is for 15 days. And this includes the following modes:

  1. Telephone-calling
  2. Short Messaging Services (SMS)
  3. E-mail
  4. Internet
  5. Interactive television (DTH)
  6. Direct postal mail
  7. Newspaper and magazine inserts
  8. Solicitation via any means other than in person

Exclusions

If the Life Assured dies due to suicide within 12 months from the date of risk commencement, the nominee or beneficiary will be entitled to 80% of the paid premiums, provided the policy is in force. In case of revival of the policy, if the insured dies, the nominee or beneficiary will get an amount above 80% of paid premiums or policy Surrender Value.

Tax Benefits

Your payable premiums under Reliance Nippon Life Fixed Savings and rider (if any) make you eligible for tax exemptions. However, this may be subject to changes in tax laws from time to time. So, consult an expert for further advice.

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