Aegon Religare Assured Returns Insurance Plan – How 2020 would be good year?

Aegon Religare Assured Returns Insurance PlanAegon Religare Assured Returns Insurance Plan – How 2020 would be good year?

2020 will be good year. Have you seen this advertisement in all leading business news papers last week? This advertisement is about Aegon Religare Assured Returns Insurance plan. The advertisement indicates that if you pay Rs 1 lakh p.a. upto 2020, you would get Rs 1.5 L from 2020 to 2026. What is this plan all about?

Aegon Religare Assured Returns insurance plan

Aegon Religare assured returns insurance plan is an endowment insurance plan without bonus facility. The policy is available for 7 or 10 years period. So, if you take this policy now in 2013, you would benefit in 2020. This is what is indicated in the advertisement.

Also read: How to choose best term insurance plan

Features of Aegon Religare Assured Returns insurance plan

  • This is a non participating endowment plan without bonus facility
  • The Policy tenure is either 7 or 10 years
  • Premium needs to be paid for the policy tenure
  • For 7 years policy tenure, assured Returns of 150% of the annualized premium would be payable every year after the policy term.
  • For 10 years policy tenure, assured returns of 175% of the annualized premium for policy tenure would be payable every year after the policy term
  • Assured Returns are paid from the end of the policy tenure for an equal number of years as the policy tenure.
  • If the Life Insured dies within the policy tenure, future premiums are waived and the maturity benefit is payable as per schedule.

Benefits

Death Benefit: If the life Insured dies within the policy tenure, future premiums are waived and the maturity benefit is payable as per schedule.

Maturity Benefit: If the insurer survives, at the end of the policy term, he/she would get guaranteed benefits of 150% of annualized premium from 8th year to 14th year for 7 year policy term. Similarly he/she would get 175% of annualized premium from 10th to 20th year for 10 year policy term.

Income tax Benefit: Insurance premiums paid under this plan are eligble for tax deduction under 80C. The maturity amount is tax free as per section 10(10)D.

Let us see this with an example.

1) If Mr.Rajesh has taken this insurance policy with an annualized premium of Rs 100,000 p.a. for 7 years. The premium need to be paid from 1st year to 7th year. Mr.Rajesh would get Rs 150,000 (150% of Rs 100,000 premium paid) per annum every from 8th year to 14th Year (Since the policy tenure is for 7 years)

2) If Mr.Akhil has taken this insurance policy with an annualized premium of Rs 100,000 p.a. for 10 years. The premium need to be paid from 1st year to 10th year. Mr.Akhil would get Rs 175,000 (175% of Rs 100,000 premium paid) per annum every from 11th year to 20th Year (Since the policy tenure is for 10 years)

3) If Mr.Ram has taken this insurance policy with an annualized premium of Rs 100,000 p.a. for 10 years. Ram dies after 2 year premiums are paid. Premiums are waived off from 3rd year to 10th year. His family would get Rs 175,000 (175% of Rs 100,000 annual premium paid) per annum every from 11th year to 20th Year (Since the policy tenure is for 10 years)

Also read: LIC Jeevan Sugam Insurance plan

Loan facility: There is no loan facility for this insurance plan.

Age entry details:

  • Minimum age : 25 years completed
  • Maximum age : 53 years in case of 7 years policy term and 50 years in case of 10 years policy term so that the maximum age at maturity is 60 years.

Minimum premium

  • 25 to 45 years of age: Rs 25,000 p.a.
  • 45+ age : Rs 40,000 p.a.

Maximum premium: Rs 250,000 p.a.

Sum Assured:

  • Minimum sum assured: < 45 years = Rs 262,500 (minimum premium x minimum policy term x 150%)
  • Minimum sum assured: 45+ years = Rs 420,000 (minimum premium x minimum policy term x 150%)
  • Maximum sum assured: Rs 43,75,000 (maximum annualized premium x maximum policy term x 175%)

Conclusion: This is best insurance plan for those, who want to get guaranteed returns after a specific period of time and also for those who have setup milestones every year after a specific period like 7 or 10 years.

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Suresh
Topic: Aegon Religare Assured Returns insurance plan

11 comments

  • Mohit

    Hello All,

    Don't mix Insurance and Investment, it is same as drinking and driving. If you want Insurance always go for term insurance (less primium and more cover). 

    It's your hard earn money, invest wisely.

  • Shahi

    Suresh, Regarding captioned plan investors to know below points :-

    1):- For 7 years Premium Plan — Considering 8.5% annual compound interest on Rs 100,000, the investors finally lose apporx. 265,000 (which the company charges for guaranting insurance)

    2):- For 10 years Premium Plan — Considering 8.5% annual compound interest on Rs 100,000, the investors finally lose apporx. 822,000 (which the company charges for guaranting insurance)

     

    • Hi Shahi, None of the insurance provides would give 8.5% returns. These are insurance+invesment products and would yield only upto 6% p.a. as returns. But as you rightly said, if one looks this from investmetn perspective, they would loose money. 

      • Shahi

        Hi Suresh, I will try to make it little simple for people to understand.

        Let's take example of 7 year Plan:-

        – For 7 years, Out of Rs100,000, Keep depositing Rs 90,000 as FD in any bank which gives you 8.5% annual return. (We usually underestimate the power of compounding and financial institutions understand it better)

        – Rest of the Rs.10,000 to be used for Term Insurance Plan annually which can cover approx Rs.10,000,000 as life insurance

        IN SHORT, Rs 100,000 = (Rs. 90,000 Recurring FD + Rs. 10,000 Term Insurance Plan)

        – After 7 years you keep withdrawing Rs 150,000 annually from the bank for next 7 years and you will still have Rs. 91,000 left in the bank.

        CONCLUSION:-

        INVESTMENT :- Aegon Religare plan gives you certain gains AND my suggestion of Recurring FD gives you the same output plus extra Rs 91,000

        INSURANCE:- Aegon Religare plan gives you insurance of approx Rs 1,050,000 (as the premiums will be waived in case of death) AND my suggestion of Term Plan gives you insurance of about Rs.10,000,000  (Approx. 10 times more)

        SAME FORMULA CALCULATION FOR 10 YEAR PLAN gives you even better results:- 

        1) With Recorring FD, you can get Rs 200,000 annual returns from the bank for next 10 years wherein Aegon Religare promises only Rs.175,000 annual return

        2) With Term Plan, you get Insurance of Rs 10,000,000 wherein Aegon Religare promises only Rs. 1,750,000 (installment waiver) which is approx 5-6 time less

        Disclosure:- I am not against any financial institution or their plans, everybody has the right to earn money so as we, the investors.

        Above adivse is nothing but an attempt for better money allocation…. I'm open for suggestions or advise. Thanks for reading.

         

        • Shahi, These are insurance-cum-investment products. You cannot compare with Bank FD. I agree with you that instead of investmetn in such insurance-cum-investment products, you can take term insurance plan + invest balance in bank FD. They would provide better returns. I would keep on saying same thing in most of the insurance-cum-investment products.

          • vivek agrawal

            Agreeing to Shahi, my views are as under:

            1. If I cover my insurance needs thru a large term insurance i.e. Rs. 1 Cr for just Rs.15-20,000 per year; I don't need to go for such expensive insurance-cum-investment product.

            2 Rest comes my investment needs and in that case pure investment will serve my purpose with higher returns. Following will be my preferences:

            a) PPF (for tax saving on investment as well as tax free return i.e. exemt exempt)

            b) Repuated company FD (rated by CRISIL / CARE/ICRA) (no tax saving on investment or return)

            c) Recurring deposits (no tax saving on investment or return)

  • Ricky

    Hi Suresh,

    I want to start new insurance plan for my wife whose age is 26 years.

    I am already investing in LIV Jeevan saral(36k per year) from last 4 years. Should I start the same policy for her as well? How is jeevan saral? I have also heard that LIC returns are lesser than private companies returns but lic is secure. Please suggest some good insurance plan where I can get lumsum amount after 10 or 15 years with good returns and coverage.

    Thanks,

    Ricky

    • Ricky, Look insurance policies for securing your family and not for investment purpose. Many of us take insurance policy and blame that they are providing less returns. All money back insurance policies provide 5% to 5.5% p.a. returns only. Consider taking term insurance policies where the cost would be very less, but the risk coverage would be high

      • Ricky

        Thanks Suresh for your feedback. Please tell some best(and safe) term insurance policies which I should take and rest of the money I will put in PPF.

        Please throw some light on LIC policies(Jeevan saral or anand). 

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