IndiaFirst Life Guaranteed Monthly Income Plan: Good or Bad? An Insightful Review
Is the IndiaFirst Life Guaranteed Monthly Income Plan your ticket to financial stability, or are there better alternatives to consider?
Can the IndiaFirst Life Guaranteed Monthly Income Plan ensure a worry-free future, or should you think twice before committing?
Does IndiaFirst Life Guaranteed Monthly Income Plan truly offer the security and returns you seek, or is it just another investment with hidden drawbacks?
In this review, we will examine its features, benefits, and drawbacks, with a special focus on analysing its Internal Rate of Return (IRR) to assess the actual returns.
What is the IndiaFirst Life Guaranteed Monthly Income Plan?
What are the features of the IndiaFirst Life Guaranteed Monthly Income Plan?
Who is eligible for the IndiaFirst Life Guaranteed Monthly Income Plan?
What are the benefits of the IndiaFirst Life Guaranteed Monthly Income Plan?
Garce Period, Discontinuance and Revival of IndiaFirst Life Guaranteed Monthly Income Plan
Free Look Period for IndiaFirst Life Guaranteed Monthly Income Plan
Surrendering IndiaFirst Life Guaranteed Monthly Income Plan
What are the advantages of the IndiaFirst Life Guaranteed Monthly Income Plan?
What are the disadvantages of the IndiaFirst Life Guaranteed Monthly Income Plan?
Research Methodology of IndiaFirst Life Guaranteed Monthly Income Plan
Benefit Illustration – IRR Analysis of IndiaFirst Life Guaranteed Monthly Income Plan
IndiaFirst Life Guaranteed Monthly Income Plan Vs. Other Investments
IndiaFirst Life Guaranteed Monthly Income Plan Vs. Pure-term + ELSS
Final Verdict on IndiaFirst Life Guaranteed Monthly Income Plan
IndiaFirst Life Guaranteed Monthly Income Plan is a Non-Linked, Participating, Limited Premium, Endowment Life Insurance Plan. It will give you regular, guaranteed monetary support.
With a regular income and life insurance benefit, this plan offers a blend of income and financial protection for your family.
| Minimum age at entry | 18 years |
| Maximum age at entry | 50 years |
| Maximum age at maturity | 75 years |
| Premium Payment Term | 8-11 years |
| Policy Term Period | 16-27 years |
| Gap Years | 0/3/5 years |
| Minimum Sum Assured | ₹ 75,000 |
| Maximum Sum Assured | No limit |
The life assured will receive the guaranteed regular income as a survival benefit in this IndiaFirst Life Guaranteed Monthly Income Plan policy.
These monthly income payouts will be in the range of 105% to 125% of the annualized premium basis the life assured’s age, gender, gap year and premium payment term chosen at inception.
The payout of the survival benefit starts after the completion of your premium payment term and continues till death or the end of the policy term.
You receive the last instalment of your guaranteed monthly income along with accrued simple reversionary and terminal bonus, if any, at the end of the IndiaFirst Life Guaranteed Monthly Income Plan policy term.
In the unfortunate event of the life assured’s demise during the term of the IndiaFirst Life Guaranteed Monthly Income Plan policy, the nominee(s) will receive the higher of:
Where Sum Assured on death is highest of:
Bonuses
A simple reversionary bonus is declared at the end of every financial year. The SRB declared is expressed either as a percentage or per 1000 sum assured of the policy.
The terminal bonus is payable on maturity, surrender or death, if earlier.
Grace Period
This IndiaFirst Life Guaranteed Monthly Income Plan policy has a grace period of 30 days for yearly, half-yearly and quarterly frequencies and 15 days for monthly frequency from the premium due date.
Discontinuance
If at least two full years’ premiums have been paid, the policy acquires a guaranteed surrender value.
In the event of non-payment of premium due under the policy after the grace period, the policy will lapse if the policy has not acquired a guaranteed surrender value.
If you stop paying premiums after the policy has acquired a guaranteed surrender value, your policy will be made paid up at the end of the grace period.
Revival
You may revive your policy within five years from the due date of the first unpaid premium but before the maturity date.
You can return your policy document if you disagree with any of the terms and conditions within the first 15 days for all channels except Distance Marketing or electronic mode, where it is 30 days from receipt of your policy document.
The IndiaFirst Life Guaranteed Monthly Income Plan policy will acquire guaranteed surrender value after 2 full years’ premiums have been paid. At the time of surrender, a higher of Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV) will be payable.
The IndiaFirst Life Guaranteed Monthly Income Plan offers regular income after the premium-paying term and deferment period. However, before committing to this investment, it is essential to evaluate its potential returns.
Using figures from the policy brochure, we will calculate the Internal Rate of Return (IRR) and compare it with alternative investment options.
Consider a 44-year-old male choosing this plan with a 27-year policy term, an 11-year premium-paying period, and an annual premium of ₹5 lakh. The sum assured is ₹77.65 lakh.
| Male | 44 years |
| Sum Assured | ₹ 77,65,450 |
| Policy Term | 27 years |
| Premium Paying Term | 11 years |
| Annualised Premium | ₹ 5,00,000 |
After completing the premium payments and a 5-year deferment period, he starts receiving annual survival benefits, including bonuses. At maturity, he receives the final survival benefit payout along with a terminal bonus.
The illustration assumes potential returns of 4% and 8%, though these are not guaranteed and depend on the policy’s actual performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 44 | 1 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 45 | 2 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 46 | 3 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 47 | 4 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 48 | 5 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 49 | 6 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 50 | 7 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 51 | 8 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 52 | 9 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 53 | 10 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 54 | 11 | -5,00,000 | 77,65,450 | -5,00,000 | 77,65,450 |
| 55 | 12 | 0 | 77,65,450 | 0 | 77,65,450 |
| 56 | 13 | 0 | 77,65,450 | 0 | 77,65,450 |
| 57 | 14 | 0 | 77,65,450 | 0 | 77,65,450 |
| 58 | 15 | 0 | 77,65,450 | 0 | 77,65,450 |
| 59 | 16 | 0 | 77,65,450 | 0 | 77,65,450 |
| 60 | 17 | 0 | 77,65,450 | 0 | 77,65,450 |
| 61 | 18 | 5,75,000 | 77,65,450 | 5,75,000 | 77,65,450 |
| 62 | 19 | 5,75,000 | 77,65,450 | 5,75,000 | 77,65,450 |
| 63 | 20 | 5,75,000 | 77,65,450 | 5,75,000 | 77,65,450 |
| 64 | 21 | 5,75,000 | 77,65,450 | 5,75,000 | 77,65,450 |
| 65 | 22 | 5,75,000 | 77,65,450 | 5,75,000 | 77,65,450 |
| 66 | 23 | 5,75,000 | 77,65,450 | 5,75,000 | 77,65,450 |
| 67 | 24 | 5,75,000 | 77,65,450 | 5,75,000 | 77,65,450 |
| 68 | 25 | 5,75,000 | 77,65,450 | 5,75,000 | 77,65,450 |
| 69 | 26 | 5,75,000 | 77,65,450 | 5,75,000 | 77,65,450 |
| 70 | 27 | 5,75,000 | 77,65,450 | 5,75,000 | 77,65,450 |
| 71 | 5,75,000 | 77,65,450 | 1,10,58,358 | 77,65,450 | |
| IRR | 0.83% | 5.71% | |||
At a 4% return, the IRR is just 0.83% as per the IndiaFirst Life Guaranteed Monthly Income Plan maturity calculator, providing no real value addition.
At an 8% return, the IRR stands at 5.71% as per the IndiaFirst Life Guaranteed Monthly Income Plan maturity calculator, which is still lower than bank fixed deposit rates.
A fixed income stream that does not adjust for inflation may not be suitable for most investors. Although this plan spans 27 years (11 years of premium payments + 5 years of deferment + 11 years of survival benefits), its returns may not justify the investment.
Additionally, funds are locked, and the payout structure is rigid. Given its limited life cover and modest returns, this plan may not be the best choice for long-term investors.
The IndiaFirst Life Guaranteed Monthly Income Plan combines life insurance with investment, but separating these components can lead to better financial outcomes.
The same premium can be strategically reallocated to generate similar or even superior cash flows through more efficient alternatives. Let’s explore this by reallocating the premium from the previous example.
A pure-term life insurance policy with a ₹75 lakh sum assured costs ₹61,500 annually for a 27-year term with a 10-year premium payment period.
This leaves ₹4,38,500 annually for investment, plus an additional ₹5 lakh in the final year since the term plan’s premium-paying period is shorter (10 years vs. 11 years in the IndiaFirst plan).
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 75,00,000 |
| Policy Term | 27 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 61,500 |
| Investment | ₹ 4,38,500 |
Low-risk investors might prefer debt instruments like the Public Provident Fund (PPF), while high-risk investors could opt for equity-based options such as Equity-Linked Savings Schemes (ELSS). For this analysis, we consider the ELSS route.
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 44 | 1 | -5,00,000 | 75,00,000 |
| 45 | 2 | -5,00,000 | 75,00,000 |
| 46 | 3 | -5,00,000 | 75,00,000 |
| 47 | 4 | -5,00,000 | 75,00,000 |
| 48 | 5 | -5,00,000 | 75,00,000 |
| 49 | 6 | -5,00,000 | 75,00,000 |
| 50 | 7 | -5,00,000 | 75,00,000 |
| 51 | 8 | -5,00,000 | 75,00,000 |
| 52 | 9 | -5,00,000 | 75,00,000 |
| 53 | 10 | -5,00,000 | 75,00,000 |
| 54 | 11 | -5,00,000 | 75,00,000 |
| 55 | 12 | 0 | 75,00,000 |
| 56 | 13 | 0 | 75,00,000 |
| 57 | 14 | 0 | 75,00,000 |
| 58 | 15 | 0 | 75,00,000 |
| 59 | 16 | 0 | 75,00,000 |
| 60 | 17 | 0 | 75,00,000 |
| 61 | 18 | 5,75,000 | 75,00,000 |
| 62 | 19 | 5,75,000 | 75,00,000 |
| 63 | 20 | 5,75,000 | 75,00,000 |
| 64 | 21 | 5,75,000 | 75,00,000 |
| 65 | 22 | 5,75,000 | 75,00,000 |
| 66 | 23 | 5,75,000 | 75,00,000 |
| 67 | 24 | 5,75,000 | 75,00,000 |
| 68 | 25 | 5,75,000 | 75,00,000 |
| 69 | 26 | 5,75,000 | 75,00,000 |
| 70 | 27 | 5,75,000 | 75,00,000 |
| 71 | 2,74,28,768 | ||
| IRR | 8.86% | ||
The accumulated ELSS corpus is later transferred to an investment yielding 7% annually, serving as a source for regular withdrawals while ensuring a final lump sum withdrawal at maturity.
| ELSS Tax Calculation | |
| Maturity value after 17 years | 2,01,58,175 |
| Purchase price | 48,85,000 |
| Long-Term Capital Gains | 1,52,73,175 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 1,51,48,175 |
| Tax paid on LTCG | 18,93,522 |
| Maturity value after tax | 1,82,64,653 |
The pre-tax maturity value of the ELSS investment reaches ₹2.01 crores. After the capital gains tax, the post-tax maturity value stands at ₹1.82 crores.
This corpus, when shifted to a 7% yielding investment, generates annual withdrawals similar to the 8% return scenario of the IndiaFirst plan, followed by a full withdrawal at maturity. The resulting Internal Rate of Return (IRR) is 8.86%.
This return could be even higher if withdrawals are avoided, providing greater flexibility to manage cash flow as needed. In contrast, the IndiaFirst Life Guaranteed Monthly Income Plan lacks flexibility and offers relatively lower returns, making it a less favourable choice.
The IndiaFirst Life Guaranteed Monthly Income Plan provides regular income after completing the premium payment term and deferment period.
However, since the plan combines insurance with investment, its fixed payouts may not be sufficient to cover substantial expenses. Additionally, the survival benefit cannot be deferred or accumulated.
An analysis of the plan’s returns reveals that it underperforms, offering returns lower than the inflation rate, which makes it difficult to maintain purchasing power.
The rigid cash flow structure and subpar returns make this plan unsuitable for long-term investors and it also has a high agent commission.
A pure-term life insurance policy is the best choice for securing life cover as it provides high coverage at an affordable premium. For investments, it is advisable to choose options that align with your risk tolerance, financial goals, and time horizon.
Instead of relying on insurance plans for regular income, building a well-structured investment portfolio offers greater flexibility and better financial security.
By diversifying your investments, you can accumulate the necessary corpus to generate the desired cash flow.
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