Listen to this article
In a world full of uncertainties, it’s smart to stash away some savings for the rainy days ahead. But can a savings cum insurance product truly pave the way for your financial goals?
Have you ever wondered if there’s a better way to grow your money?
In this article, let us review Edelweiss Tokio Life Insurance Legacy Plus in detail. We shall also compare the returns of the plan with other products. This will help you in choosing your investments.
Let’s break down the advantages and disadvantages of the Edelweiss Legacy Plus Plan to help you make better financial decisions. Exploring its features will give us a clearer picture.
Table of Contents:
1.What is the Edelweiss Legacy Plus Plan
2.What are the features of the Edelweiss Legacy Plus Plan
3.What are the Eligibility Criteria
4.Edelweiss Legacy Plus Plan Benefits in detail
- Lifelong Income option
- Family Secure Option
5.Edelweiss Legacy Plus Plan Grace period, Premium discontinuance & Revival
6.Edelweiss Legacy Plus Plan Free Look Period
7.Surrendering Edelweiss Legacy Plus Plan
8.What are the Advantages of the Edelweiss Legacy Plus Plan
9.What are the Disadvantages of the Edelweiss Legacy Plus Plan
10.Edelweiss Legacy Plus Plan Research Methodology
11.Benefit illustration – IRR Analysis
12. Edelweiss Legacy Plus Plan Vs Other Investment Options
13.Final verdict on Edelweiss Legacy Plus Plan
1. What is the Edelweiss Legacy Plus Plan
Edelweiss Legacy Plus is a Non-Linked, Participating, Individual, Savings, Life Insurance Plan. It is a whole life insurance plan designed to provide protection to your family from any financial loss in case of an untimely death, and also provide a regular income and/or lumpsum to you and your family.
2. What are the Features of the Edelweiss Legacy Plus Plan
- Choose from two plan options: Lifelong Income Option and Family Secure Option.
- Option to customise the plan according to your needs using Accrual of Survival Benefits.
- Receive lifelong guaranteed income starting as early as 1st Policy year and up until age 100.
3. What are the Eligibility Criteria?
| Lifelong Income option | Family Secure option | |
| Premium paying term | 8 /10 /12 years | |
| Policy term | 100 – Entry age | |
| Minimum Entry age | 0 years | Primary Life insured: 21 years Secondary Life insured: 0 years |
| Maximum Entry age | 60 years | Primary Life insured: 45 / 50 years Secondary Life insured: 17 years |
| Minimum Maturity age | 100 years | |
| Maximum Maturity age | 100 years | |
| Minimum premium | Annual – 25,000 Semi-Annual – 12,800 Quarterly – 6,500 Monthly – 2,200 |
|
| Maximum Premium | No limit | |
| Minimum Sum Assured on death | ₹ 1,75,000 | |
| Maximum Sum Assured on death | No limit | |
4. Edelweiss Legacy Plus Plan Benefits in detail
This plan provides two variants to choose from. These plan choices allow you to personalize the plan based on your specific needs. Your Benefits will vary depending on the Plan Option chosen.
i.) Lifelong Income option
Under this Plan Option, you will receive the following Survival Benefit, Maturity Benefit, and Death Benefit.
A. Survival benefit:
Survival Benefit equal to regular income which comprises of Guaranteed income and cash bonus, if declared. Survival benefits will be payable annually, starting from the first policy year till maturity or death, whichever is earlier, while the policy is in force.
B. Maturity Benefit:
In addition to the Survival Benefit as mentioned above, the Maturity Benefit is equal to the Sum Assured on Maturity (SAM) plus the Terminal Bonus, if declared, will be payable provided the policy is in force.
Sum Assured on Maturity (SAM) is equal to SAM Multiple X Annualized Premium.
C. Death Benefit:
The death benefit payable is the Sum Assured on Death (SAD), plus a Terminal Bonus if declared.
ii.) Family Secure Option
This Plan Option provides life protection on a shared life basis. One of the Life Insured(s) will be the Primary Life Insured and the other will be the Secondary Life Insured. Under this Plan Option, you will receive the following Survival Benefit, Maturity Benefit and Death Benefit:
A. Survival Benefit:
Survival Benefit is equal to Regular Income which comprises of Guaranteed income and cash bonus, if declared. Survival Benefit will be payable annually, starting from the first policy year till maturity or second death/simultaneous death, whichever is earlier, while the policy is in force.
B. Maturity benefit:
Maturity Benefit is payable equal to the Sum Assured on Maturity (SAM) plus a Terminal Bonus if declared, provided the policy is in force.
Sum Assured on Maturity (SAM) is equal to SAM Multiple X Annualized Premium.
C. Death Benefit:
In the case of the first death, only the Sum Assured on Death (SAD) for the respective holder is payable. In case of the second death, along with the Sum Assured on Death (SAD), a Terminal Bonus is payable.
In case, the primary life insured dies first, cover will continue for the secondary life insured. There are no future premiums to pay, and the insurance will remain in force.
In case of secondary life insured dies first, the cover will continue for the Primary Life Insured provided the future premiums are paid as and when due.
Here, SAD for Primary Life Insured and Secondary Life Insured is equal to 7 times the Annualized Premium. The minimum death benefit payable on the death of Primary Life Insured shall be at least 105% of Total Premiums Paid up to the date of death or 10 times the Annual Premium whichever is higher.
5. Edelweiss Legacy Plus Plan Grace period, Premium discontinuance & Revival
i.) Grace period
A Grace Period of 15 days where the Policyholder pays the Premium on a monthly basis and 30 days in all other cases will be allowed.
ii.) Premium discontinuance
If all the Premiums for at least the first two Policy Years have not been paid in full within the Grace Period, the Policy shall immediately and automatically lapse and no benefits shall be payable.
If all the Premiums for at least the first two Policy Years have been paid in full, and if we do not receive subsequent Premiums within the Grace Period, the Policy will acquire Reduced Paid-Up status and benefits will continue as per the Reduced Paid-Up provision.
iii.) Revival
The policy may be revived within five years from the date of the first unpaid premium.
6. Edelweiss Legacy Plus Plan Free Look Period
If you disagree with any of the terms and conditions, you may return this Policy within 15 days of receipt of the policy and a period of 30 days in case of electronic Policies and Policies obtained through distance mode.
7. Surrendering Edelweiss Legacy Plus Plan
The Policy will acquire Surrender Value if all the Premiums have been paid in full for at least the first two Policy Years. The higher Guaranteed Surrender Value (‘GSV’) or (Special Surrender Value (‘SSV’) is payable as surrender value. On payment of surrender value, the Policy will be terminated and all the benefits under the Policy shall cease to apply.
8. What are the Advantages of the Edelweiss Legacy Plus Plan
- You can choose additional riders to enhance your protection.
- You can choose to accrue the Survival Benefits.
- Policy loan is available once the policy acquires surrender value. The maximum loan amount available will be 60% of the surrender value.
9. What are the disadvantages of the Edelweiss Legacy Plus Plan
- The survival benefit starts as early as the first year, this affects the compounding effect of your investment.
- The survival benefit is not adjusted to inflation year after year.
10. Edelweiss Legacy Plus Plan Research Methodology
We shall estimate the potential return of the plan to find its suitability. Edelweiss Legacy Plus offers both survival benefits and maturity benefits. Both benefits are non-guaranteed amounts, as the cash bonus rate varies year after year. So, using the figures given in the Edelweiss Legacy Plus policy brochure, let us estimate the Internal Rate of Return.
11. Benefit illustration – IRR Analysis
A 35-year-old male buys Edelweiss Legacy Plus for a Sum assured of ₹ 10 Lakhs. The premium paying term is 12 years and the annualised premium of ₹ 1 Lakh. He chooses the Lifelong income option.
| Male | 35 years |
| Sum Assured | ₹ 10 Lakhs |
| Premium paying term | 12 years |
| Annualised premium | ₹ 1 Lakh |
The illustrations on this page will show two different rates of assumed future investment returns, 8% p.a. and 4% p.a. These anticipated rates of return are not guaranteed and do not represent the top or lower limits of what you may get, since the value of your policy is determined by a variety of factors, including future investment performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -88,417 | 10,00,000 | -88,417 | 10,00,000 |
| 36 | 2 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 37 | 3 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 38 | 4 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 39 | 5 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 40 | 6 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 41 | 7 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 42 | 8 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 43 | 9 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 44 | 10 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 45 | 11 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 46 | 12 | -75,891 | 10,00,000 | -58,516 | 10,00,000 |
| 47 | 13 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 48 | 14 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 49 | 15 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 50 | 16 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 51 | 17 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 52 | 18 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 53 | 19 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 54 | 20 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 55 | 21 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 56 | 22 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 57 | 23 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 58 | 24 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 59 | 25 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 60 | 26 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 61 | 27 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 62 | 28 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 63 | 29 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 64 | 30 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 65 | 31 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 66 | 32 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 67 | 33 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 68 | 34 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 69 | 35 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 70 | 36 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 71 | 37 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 72 | 38 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 73 | 39 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 74 | 40 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 75 | 41 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 76 | 42 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 77 | 43 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 78 | 44 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 79 | 45 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 80 | 46 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 81 | 47 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 82 | 48 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 83 | 49 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 84 | 50 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 85 | 51 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 86 | 52 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 87 | 53 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 88 | 54 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 89 | 55 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 90 | 56 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 91 | 57 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 92 | 58 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 93 | 59 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 94 | 60 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 95 | 61 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 96 | 62 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 97 | 63 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 98 | 64 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 99 | 65 | 24,109 | 10,00,000 | 41,484 | 10,00,000 |
| 100 | 22,64,156 | 10,00,000 | 1,37,47,910 | 10,00,000 | |
| IRR | 3.00% | 6.49% | |||
Under the 4% scenario, a survival benefit of ₹ 24,109 is receivable throughout the lifetime. The maturity benefit amounts to ₹ 22.64 Lakhs. The IRR for the 4% scenario is 3%.
Under the 8% scenario, a survival benefit of ₹ 41,484 is receivable throughout the lifetime. The maturity benefit amounts to ₹ 1.37 crores. The IRR for the 8% scenario is 6.50%.
Under both scenarios, during the initial years, the survival benefit is adjusted with the premium. After the end of the premium paying term, you receive the survival benefit in full, till your lifetime.
Under Edelweiss Legacy Plus, after the end of the premium paying term, your investment is locked with the plan. You receive the survival benefit which you can’t be considered as a source of income. The reason behind this is, that the survival benefit is non-guaranteed and also not adjusted to inflation. The survival benefit can’t wither the ever-increasing household expenses.
The maturity benefit can only be accessed once the policyholder reaches the age of 100. However, at that point, neither the maturity benefit nor the death benefit would be beneficial to the policyholder. Therefore, all the benefits—such as Survival benefit, Maturity benefit, or death benefit—are rendered useless to the investor.
12. Edelweiss Legacy Plus Plan Vs Other Investment Options
Edelweiss Legacy Plus Plan (IRR 3% to 6.49%): This plan offers an Internal Rate of Return (IRR) ranging from 3% to 6.49%. This means that the returns on investment in this plan could vary within this range, depending on various factors such as market performance and fund management.
Public Provident Fund (PPF) (Interest rate 7.1%): PPF is a government-backed savings scheme that currently offers an interest rate of 7.1%. Unlike the Edelweiss Legacy Plus Plan, which is subject to market fluctuations, PPF provides a fixed and guaranteed return on investment, making it a relatively stable option.
Diversified Equity Funds (Approx. 12% return): Diversified equity funds are mutual funds that invest in a mix of stocks across different sectors and market capitalizations. Historically, such funds have yielded returns of around 12% on average over the long term. While they offer the potential for higher returns compared to fixed-income options like PPF, they also come with higher risk due to market volatility.
In summary, while the Edelweiss Legacy Plus Plan may provide below average returns, investors seeking potentially higher returns may find PPF or diversified equity funds more appealing options, each with its own risk-return profile.
13. Final verdict on Edelweiss Legacy Plus Plan
Edelweiss Legacy Plus presents a standard Whole Life policy, where you make premium payments for a limited period and start receiving survival benefits throughout your lifetime. However, a portion of these benefits is non-guaranteed, making them unsuitable for specific purposes. Moreover, the early commencement of the survival benefit restricts the potential for compounding, rendering it insufficient for significant expenses.
One significant drawback of Edelweiss Legacy Plus lies in its lack of investment flexibility and a high agent commission involved in purchasing the plan. Policyholders only receive the survival benefit without any additional advantages. Given these limitations, it’s prudent for investors to steer clear of investing in Edelweiss Legacy Plus.
To attain your financial goals effectively, always opt for a more yielding investment product, where the return surpasses the inflation rate. Additionally, having a life cover provides double protection.
For personalized financial planning tailored to your goals, consult a Certified Financial Planner. They can assist you in selecting the right investment product to meet your needs and aspirations. Take proactive steps towards securing your financial future today.
Take aggressive actions to secure your financial future now. It is not suggested to make critical financial decisions using social media sites such as Facebook, Quora, Twitter, and so on.
Instead, seek guidance from a Certified Financial Planner for personalized financial planning. A good financial plan will cob rover all of your future financial needs.
Leave a Reply