India First Life Cashback Plan: Good or Bad? A Detailed Review
Is this IndiaFirst Life cashback plan a smart financial move, or are you settling for less than what you deserve?
Is the IndiaFirst Life Cashback Plan enough to meet your long-term goals, or should you aim for something more?
Can the IndiaFirst Life Cashback Plan provide the financial security you seek, or is it time to reconsider your options?
In this review, we’ll explore its features, benefits, and drawbacks. By calculating the Internal Rate of Return (IRR) and comparing it with other investment options, we aim to help you make an informed decision.
What is the IndiaFirst Life Cashback Plan?
What are the features of the IndiaFirst Life Cashback Plan?
Who is eligible for the IndiaFirst Life Cashback Plan?
What are the benefits of the IndiaFirst Life Cashback Plan?
Grace Period, Discontinuance and Revival of IndiaFirst Life Cashback Plan
Free Look period for IndiaFirst Life Cashback Plan
Surrendering IndiaFirst Life Cashback Plan
What are the advantages of the IndiaFirst Life Cashback Plan?
What are the disadvantages of the IndiaFirst Life Cashback Plan?
Research Methodology of IndiaFirst Life Cashback Plan?
Benefit Illustration – IRR Analysis of IndiaFirst Life Cashback Plan
IndiaFirst Life Cashback Plan Vs. Other investments
IndiaFirst Life Cashback Plan Vs. Pure-term + ELSS
Final Verdict on IndiaFirst Life Cashback Plan
IndiaFirst Life Cash Back Plan is a Non-Participating, Non-Linked Individual Life Savings Insurance Plan. The plan guarantees payouts at regular intervals to meet your specific needs and an assured maturity payout to secure your future.
The IndiaFirst Life Cash Back Plan policy will also ensure your family’s financial security in case of the life assured’s unfortunate demise.
Pay premiums for a limited period while staying invested for a longer duration (9, 12, 15, or 18 years) based on your needs.
Receive guaranteed payouts at regular intervals throughout the policy term.
Earn guaranteed additions credited to your policy at the end of each policy year.
Enjoy risk cover, which is the higher of 10 times the annualized premium or the sum assured on maturity, along with accumulated guaranteed additions.
Enhance your coverage with optional riders like Accidental Death Benefit, Total & Permanent Disability, and Waiver of Premium by paying an additional premium.
Avail potential tax benefits on premiums paid and benefits received, subject to prevailing tax laws.
| Minimum | Maximum | |
| Entry Age | 15 years | For Policy term 9,12 years – 50 years For Policy term 15,18 years – 55 years |
| Age at maturity | _ | 73 years |
| Sum Assured | ₹ 50,000 | No limit |
| Policy term & Premium Payment term | Policy term | Premium Payment term |
| 9 years | 5 years | |
| 12 years | 7 years | |
| 15 years | 10 years | |
| 18 years | 12 years | |
| Premium payment frequency | Annual, Half-yearly, Quarterly and Monthly | |
The nominee will receive the following as a death benefit
Max (10*Annualized Premium, Sum Assured on maturity) + Guaranteed Additions equal to7% of Annualized Premium* Till Year of Death
20% of the Sum assured on maturity is receivable twice during the IndiaFirst Life Cash Back Plan policy term.
For policy term 9 years – At the end of 3rd and 6th year
For policy term 12 years – At the end of 4th and 8th year
For policy term 15 years – At the end of 5th and 10th year
For policy term 18 years – At the end of 6th and 12th year
The life assured will receive 60% of the sum assured at maturity along with guaranteed additions based on the policy term as a maturity benefit. The benefit will be payable at the end of the IndiaFirst Life Cash Back Plan policy term.
This IndiaFirst Life Cash Back Plan policy has a grace period of 30 days for yearly, half-yearly and quarterly frequencies and 15 days for monthly frequencies from the premium due date.
The policy lapses without acquiring any paid-up value, if you stop paying your premium during the first policy year.
The policy acquires a paid-up value if you stop paying your premiums after the competition of the first policy year, provided one full year has been paid and subsequent premiums have not been paid.
The IndiaFirst Life Cash Back Plan offers a five-year revival period during which you can revive your policy.
You have the option to review the terms and conditions of the policy and if you disagree with any of those terms or conditions, you have the option of returning the policy within 30 days from the date of receipt of the policy, whether received electronically or otherwise.
The policy can be surrendered for immediate cash any time after acquiring the paid-up value (after paying one full year’s premium).
The amount payable on surrender will be higher than the Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV).
The IndiaFirst Life Cash Back Plan policy shall acquire a Guaranteed Surrender Value (GSV) on payment of premium for at least two consecutive years.
Enjoy a discount on renewal premiums when paid in advance.
Benefit from higher premium enhancement factors on the sum assured at maturity for larger annualized premiums.
Enhance your coverage by adding riders to the base policy.
Access a loan facility of up to 80% of the surrender value.
The policy term and premium payment term lack flexibility.
Survival benefits cannot be deferred.
Life coverage may be inadequate.
Survival benefits may encourage discretionary spending.
Despite guaranteed benefits, returns are low.
The IndiaFirst Life Cashback Plan provides guaranteed benefits, including survival payouts twice during the IndiaFirst Life Cash Back Plan policy term and a maturity benefit at the end.
While the assurance of these benefits is an advantage, evaluating the actual returns before investing is essential. Let’s analyse the Internal Rate of Return (IRR) based on the figures in the policy brochure.
A 30-year-old individual purchases the IndiaFirst Life Cashback Plan with a sum assured of ₹2 lakhs. The policy term is 15 years, with a premium payment term of 10 years and an annual premium of ₹17,371.
| Male | 30 years |
| Sum Assured | ₹ 2,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 17,371 |
The policyholder receives 20% of the sum assured (₹40,000) at the end of the 5th and 10th year. The remaining 60% of the sum assured, along with the guaranteed maturity benefit, is paid at the end of the term.
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 30 | 1 | -17,371 | 2,00,000 |
| 31 | 2 | -17,371 | 2,00,000 |
| 32 | 3 | -17,371 | 2,00,000 |
| 33 | 4 | -17,371 | 2,00,000 |
| 34 | 5 | -17,371 | 2,00,000 |
| 35 | 6 | 22,629 | 2,00,000 |
| 36 | 7 | -17,371 | 2,00,000 |
| 37 | 8 | -17,371 | 2,00,000 |
| 38 | 9 | -17,371 | 2,00,000 |
| 39 | 10 | -17,371 | 2,00,000 |
| 40 | 11 | 40,000 | 2,00,000 |
| 41 | 12 | 0 | 2,00,000 |
| 42 | 13 | 0 | 2,00,000 |
| 43 | 14 | 0 | 2,00,000 |
| 44 | 15 | 0 | 2,00,000 |
| 45 | 1,38,240 | 2,00,000 | |
| IRR | 3.03% |
The final maturity amount is ₹1.38 lakhs, resulting in an IRR of just 3.03% as per the IndiaFirst Life Cash Back Plan maturity calculator. Such a low return over a 15-year period makes this plan financially unappealing.
Despite the certainty of survival and maturity benefits, the returns fall short. Moreover, survival benefits cannot be deferred or accumulated.
Additionally, the sum assured is too low to provide adequate financial protection for a family. With poor returns, a rigid cash flow structure, and insufficient life coverage, the IndiaFirst Life Cashback Plan fails to serve as an effective insurance or investment option.
Investing long-term in a plan that yields returns lower than the inflation rate defeats the purpose of saving. Hence, let’s explore better alternatives that provide the same cash payouts as the IndiaFirst Life Cashback Plan while keeping insurance and investment separate.
As per IRDAI regulations, the minimum sum assured for a pure-term life insurance policy is ₹5 lakhs, which the earlier illustration does not meet. In this comparison, we assume life coverage of ₹5 lakhs and proceed with the calculation.
A pure-term life insurance policy with a sum assured of ₹5 lakhs would cost approximately ₹2,600 per year for a 15-year term, with premiums paid over 10 years. This leaves ₹14,771 per year available for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 5,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 2,600 |
| Investment | ₹ 14,771 |
For investments, we opt for an Equity Linked Savings Scheme (ELSS). To match the survival benefits, partial withdrawals are made, with the final redemption occurring at the end of the policy term.
Capital gains are considered only during the final redemption, utilizing the ₹1.25 lakh annual tax exemption limit.
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 30 | 1 | -17,371 | 2,00,000 |
| 31 | 2 | -17,371 | 2,00,000 |
| 32 | 3 | -17,371 | 2,00,000 |
| 33 | 4 | -17,371 | 2,00,000 |
| 34 | 5 | -17,371 | 2,00,000 |
| 35 | 6 | 22,629 | 2,00,000 |
| 36 | 7 | -17,371 | 2,00,000 |
| 37 | 8 | -17,371 | 2,00,000 |
| 38 | 9 | -17,371 | 2,00,000 |
| 39 | 10 | -17,371 | 2,00,000 |
| 40 | 11 | 40,000 | 2,00,000 |
| 41 | 12 | 0 | 2,00,000 |
| 42 | 13 | 0 | 2,00,000 |
| 43 | 14 | 0 | 2,00,000 |
| 44 | 15 | 0 | 2,00,000 |
| 45 | 3,11,386 | 2,00,000 | |
| IRR | 9.71% | ||
By the end of the term, the pre-tax value of the investment stands at ₹3.16 lakhs, and the post-tax value at ₹3.11 lakhs, yielding an IRR of 9.71%.
If periodic withdrawals are avoided and the amount is redeemed at the end, the returns could be even higher. Additionally, this alternative strategy offers flexibility, allowing withdrawals whenever required.
| ELSS Tax Calculation | |
| Maturity value after 15 years | 3,16,912 |
| Purchase price | 1,47,710 |
| Long-Term Capital Gains | 1,69,202 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 44,202 |
| Tax paid on LTCG | 5,525 |
| Maturity value after tax | 3,11,386 |
The IndiaFirst Life Cashback Plan lacks both higher returns and liquidity, making it a less effective choice for achieving financial goals.
The IndiaFirst Life Cashback Plan is a typical money-back policy that provides guaranteed cash payouts at regular intervals.
However, its rigid structure—including fixed premium payments, policy terms, and payout intervals—limits flexibility, preventing investors from aligning the plan with their financial needs. This mismatch often results in benefits that do not effectively serve their intended purpose.
An analysis of returns shows that while the plan guarantees payouts, its overall returns are significantly below par and it also has a high agent commission.
A long-term investment with poor returns will not keep up with inflation, making it inadequate for future financial goals. Additionally, the sum assured is insufficient to provide meaningful financial security.
Although the idea of guaranteed benefits at regular intervals may seem attractive, the combination of low returns, lack of flexibility, and inadequate life coverage makes the IndiaFirst Life Cashback Plan an unsuitable choice for investors.
Blending insurance and investment within a single product often fails to deliver optimal results. Money-back plans provide inadequate life cover and periodic payouts that may not align with actual financial needs, reducing their overall effectiveness.
In contrast, a pure-term life insurance policy offers significantly higher coverage at a much lower cost.
Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?
To secure your financial future, focus on building an investment portfolio tailored to your risk appetite, life goals, and investment horizon.
For a well-structured financial plan, consider consulting a Certified Financial Planner who can provide personalized guidance based on your unique objectives.
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