Exide Life Guaranteed Wealth Plus Insurance Plan – A Review
Few days back, Exide Life Insurance has launched Guaranteed Wealth Plus insurance scheme. This is an insurance cum investment scheme where one can pay for 6 years and get guaranteed income for 30 years. This 30-year guaranteed income is a “psychologically happiness” impression being created by the insurance policy. What is Exide Life Guaranteed Wealth Plus Insurance Scheme all about? Should you opt for Exide Life Guaranteed Wealth Plus Insurance? What are the hidden or negative factors in this plan?
Also Read: This LIC Insurance Plan offers 6.5% returns – Should you opt?
Exide Life Guaranteed Wealth Plus – Key Features
This is non linked and non-participating individual life savings scheme which provides long term guaranteed returns.
This plan offers two variants – Lump Sum Variant and Income Variant which needs to be chosen at the time of taking the policy.
One can pay for 6 years and enjoy life insurance coverage for the full term of the policy.
One can get guaranteed income benefit in either lump sum or regular income for 30 years of the policy. In case of regular income variant, investors would get return of premium after 30 years of the policy term.
Eligibility Criteria in Exide Life Guaranteed Wealth Plus
Benefits in Exide Life Guaranteed Wealth Plus Insurance
1) Pay only 6 years
Policy holders need to pay only for 6 years and enjoy life insurance for the entire term of the policy
2) Death Benefit
In case of unfortunate death of the life insured, the nominee would get x times of annualized premium or 105% of premiums paid whichever is higher.
For lump sum variant, the multiple x depends on the age of the life insured. Refer brochure for detailed multiple factor by age.
In case of income variant, the x multiple would be 10 times for < 45 years of age and beyond 45 years, it would be 10 or 7 times as chosen by the policyholder.
3) Maturity Benefit
On survival of the policy holder, the maturity benefit would be as follows
i) Lump sum Variant
Maturity benefit under this variant would be calculated based on fixed %age of total annualized premiums payable. See below table for more info.
ii) Income Variant
Maturity benefit under this variant would 100% of total premiums paid under the policy.
4) Survival Benefit
i) Lump sum variant: No survival benefit is paid
ii) Income Variant
During the survival period, the following guaranteed income would be paid in equal amount for a fixed term of 30 years. Guaranteed income would depend on the annualized premiums paid + PPT chosen (7 times or 10 times).
5) Income Tax Benefits u/s 80c
Insurance premiums paid would qualify for income tax rebate u/s 80c up to Rs 1.5 Lakhs for a financial year.
Also Read: LIC Jeevan Umang Offers Whole Life Plan + Money Back Every Year
How Exide Life Guaranteed Wealth Plus works?
Let me explain this with a couple of examples.
1) Illustration for Lump Sum Variant
Mr. Rajesh, 35 years pays premium of Rs 200,000 per year.
Premium payment term 6 years
Policy term of 12 years and opts for Variant 1 – Lump sum Variant.
Total premiums for 6 years would be Rs 12,00,000
Life Insurance Cover of 12.5 times x Annualized Premium = 25 lakh
Here are how the insurance premiums are paid and benefits are received.
In the above case, in case of unfortunate death of Mr Rajesh, the death benefit of Rs 25 Lakhs is paid.
On maturity, Mr Rajesh would get Rs 20.04 Lakhs as maturity benefit.
2) Illustration for Income Variant
Mr Narayana, 35 years pays premium of Rs 200,000 per year.
Premium payment term 6 years.
Policy term of 37 years and opts for Variant 2 – Income Variant.
Total premiums for 6 years would be Rs 12,00,000
Life Insurance Cover during premium payment term 12.5 times x Annualized Premium = 25 lakh
Life insurance after 6-year period, but till end of policy term 10 times = Rs 20 Lakhs.
Here are how the insurance premiums are paid and benefits are received.
In the above case, in case of unfortunate death of Mr Narayana within 6 years from policy date, the death benefit of Rs 25 Lakhs is paid, and Rs 20 Lakhs is paid if it is beyond 6 years, but before end of policy term.
Mr Narayana would get Rs 1 Lakh as guaranteed income for 30 years from the 8th year of the policy.
On maturity, Mr Narayana would get Rs 12 Lakhs as maturity benefit.
Positive Factors in Exide Life Guaranteed Wealth Plus
Here are major positive factors:
1) This is life insurance cum savings account. One would have life insurance and at the same time, the savings would keep getting accumulated.
2) This plan comes with two variants. If the policy holder thinks his/her family might need lump sum benefit in his/her absence, they can consider this variant, otherwise they can opt for income variant.
3) Under the income variant plan, it provides guaranteed inflow for 30 years. Someone is earning good now, but later want a second income through some inflow, can opt for such plans.
4) Like any other insurance plan, it provides income tax benefits u/s 80c up to Rs 1.5 Lakhs
Negative / Hidden Factors in Exide Life Guaranteed Wealth Plus Plan
Here are some negative factors
1) These insurance cum savings policies provide low returns. If you observe the example, I gave above for lump sum variant, the returns are 5.01% per annum + life insurance coverage. If you adjust this life insurance premium, you may expect returns of 5.5%. Similarly, if we look at an income variant example, one can expect 6% returns. Means the return are varying between 5.5% to 6% per annum.
2) The Policy lapses if a policy holder does not pay premiums for at least 2 years and no benefits are available further.
3) In case of suicide by the policy holder, only 80% of the premiums paid would be refunded to the nominee.
Also Read: Among LIC Tech Term Plan Vs Max Life Term Plan, which is better?
Should you opt Exide Life Guaranteed Wealth Plus Insurance Plan?
This plan comes with a guaranteed income plan and several other key features. However, such insurance-cum-savings plans come with low returns between 5.5% to 6%. Such returns cannot beat inflation, hence your hard-earned money value could be lower in the long term. If you are okay with such low returns, you can go ahead and consider such plan. Alternatively, you can invest in equity mutual funds for such long term of 20-40 years and get higher returns.
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