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Is the IndiaFirst Life Insurance Khata Plan a game-changer for financial security, or just another micro-insurance product with hidden limitations?
Does the IndiaFirst Life Insurance Khata Plan truly cater to the needs of low-income individuals, or are there better options available?
Can the IndiaFirst Life Insurance Khata Plan provide real value for money, or is it simply another insurance gimmick?
In this review examines its key features, benefits, and drawbacks to help you decide.
Table of Contents
What is the IndiaFirst Life Insurance Khata Plan?
What are the features of the IndiaFirst Life Insurance Khata Plan?
Who is eligible for the IndiaFirst Life Insurance Khata Plan?
What are the benefits of the IndiaFirst Life Insurance Khata Plan?
Free Look Period for IndiaFirst Life Insurance Khata Plan
Surrendering IndiaFirst Life Insurance Khata Plan
What are the advantages of the IndiaFirst Life Insurance Khata Plan?
What are the disadvantages of the IndiaFirst Life Insurance Khata Plan?
Research Methodology of IndiaFirst Life Insurance Khata Plan
Benefit Illustration – IRR Analysis of IndiaFirst Life Insurance Khata Plan
IndiaFirst Life Insurance Khata Plan Vs. Alternate strategy
Final Verdict on IndiaFirst Life Insurance Khata Plan
What is the IndiaFirst Life Insurance Khata Plan?
IndiaFirst Life “INSURANCE KHATA” Plan (Micro-Insurance Product) is a non-linked, non-participating, individual life micro-insurance savings plan.
The IndiaFirst Life Insurance Khata Plan policy is designed to offer financial protection in the form of a life cover for the family along with an assured benefit on maturity in case the life assured survives till the end of the policy term.
What are the features of the IndiaFirst Life Insurance Khata Plan?
- Ensure financial security for your family with this policy.
- Choose coverage for 5, 7, or 10 years by paying a single premium.
- Enhance your coverage by making one-time or multiple single premium payments based on your capacity.
- Receive guaranteed benefits upon maturity.
Who is eligible for the IndiaFirst Life Insurance Khata Plan?
| Minimum | Maximum | |
| Age at entry | 18 years | 45 years for a policy term of 5 years 43 years for a policy term of 7 years 40 years for a policy term of 10 years |
| Age at Maturity | _ | 50 years |
| Premium paying term | single pay | |
| Policy term | 5/7/10 years | |
| Premium | Rs. 1000 for a 5-year policy term Rs. 715 for a 7-year policy term Rs. 500 for a 10-year policy term |
Rs. 40,000 for a 5-year policy term Rs. 28,570 for a 7-year policy term Rs. 20,000 for a 10-year policy term |
| Sum assured on death | Rs. 5000 | Rs. 2,00,000 |
What are the benefits of the IndiaFirst Life Insurance Khata Plan?
Death benefit
A lump sum amount will be paid to the nominee in the untimely event of the Life Assured’s demise.
Higher of:
- 125% of the single premium or
- Sum assured benefit on maturity or
- Sum assured on death to be paid on death.
| Policy Term | Age at Entry (Years) | Death Benefit |
| 5 years | 18 to 45 | 5*Single Premium |
| 7 years | 18 to 43 | 7*Single Premium |
| 11 years | 18 to 40 | 11*Single Premium |
Maturity benefit
In case of survival of the life assured till the end of the IndiaFirst Life Insurance Khata Plan policy term, the policyholder stands to receive the sum assured on maturity, which is X% of the Single Premium paid, excluding applicable tax, if any and extra premium, if any
Free Look Period for IndiaFirst Life Insurance Khata Plan
In case you do not agree to any of the policy terms and conditions, you have the option to return the policy to the insurer for cancellation within 30 days from the date of receipt of the policy.
Surrendering IndiaFirst Life Insurance Khata Plan
You can surrender the IndiaFirst Life Insurance Khata Plan policy at any time during the policy term after payment of the premium. The policy shall acquire a surrender value immediately on the payment of the Single Premium.
The amount payable on surrender will be higher than the Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV).
What are the advantages of the IndiaFirst Life Insurance Khata Plan?
- Enjoy a hassle-free, one-time investment with a single premium payment.
- Avail loans of up to 80% of the surrender value when needed.
- All benefits are guaranteed right from the start of the policy.
What are the disadvantages of the IndiaFirst Life Insurance Khata Plan?
- The maximum sum assured under this policy is ₹2 lakh.
- While the benefits are guaranteed, the returns are relatively low.
- The policy term is fixed, offering no flexibility in selection.
Research Methodology of IndiaFirst Life Insurance Khata Plan
The IndiaFirst Life Insurance Khata Plan functions differently from traditional life insurance policies. It allows you to open an “Insurance Khata” (Insurance account) and contribute as per your cash flow, increasing your coverage with each payment.
By purchasing multiple single-premium policies, you can gradually enhance your sum assured over time. Let’s illustrate this with an example.
Benefit Illustration – IRR Analysis of IndiaFirst Life Insurance Khata Plan
A 37-year-old male invests whenever he has surplus income, increasing his insurance coverage. He can continue buying new policies until the age of 45 and enjoy benefits until he turns 50. Each single-premium purchase raises his sum assured.
At maturity, he receives guaranteed benefits based on the maturity date of each policy.
| Policy Start Date | Age of Customer | Policy Term (Years) | Policy End Date | Premium Paid | Sum assured on maturity | Sum Assured payable in case of death |
| 02-09-2019 | 37 | 10 | 01-09-2029 | ₹ 2,000 | ₹ 2,102 | ₹ 20,000 |
| 31-03-2020 | 38 | 10 | 30-03-2030 | ₹ 3,500 | ₹ 3,640 | ₹ 35,000 |
| 23-06-2021 | 39 | 10 | 22-06-2031 | ₹ 4,000 | ₹ 4,116 | ₹ 40,000 |
| 07-09-2021 | 39 | 7 | 06-09-2028 | ₹ 2,500 | ₹ 2,604 | ₹ 17,500 |
| 03-08-2022 | 40 | 7 | 02-08-2029 | ₹ 2,000 | ₹ 2,073 | ₹ 14,000 |
| 15-07-2023 | 41 | 5 | 14-07-2028 | ₹ 2,000 | ₹ 2,020 | ₹ 10,000 |
| 31-01-2024 | 42 | 5 | 30-01-2029 | ₹ 3,500 | ₹ 3,526 | ₹ 17,500 |
Key Observations:
Total Sum Assured: ₹1.54 lakh
Total Premiums Paid: ₹19,500
Total Maturity Benefit Received: ₹20,081
Returns (XIRR Calculation): 0.37% as per IndiaFirst Life Insurance Khata Plan maturity calculator
| Date | Single premium/Maturity benefit | Sum assured |
| 02-09-2019 | ₹ -2,000 | ₹ 20,000 |
| 31-03-2020 | ₹ -3,500 | ₹ 35,000 |
| 23-06-2021 | ₹ -4,000 | ₹ 40,000 |
| 07-09-2021 | ₹ -2,500 | ₹ 17,500 |
| 03-08-2022 | ₹ -2,000 | ₹ 14,000 |
| 15-07-2023 | ₹ -2,000 | ₹ 10,000 |
| 31-01-2024 | ₹ -3,500 | ₹ 17,500 |
| 01-09-2029 | ₹ 2,102 | |
| 30-03-2030 | ₹ 3,640 | |
| 22-06-2031 | ₹ 4,116 | |
| 06-09-2028 | ₹ 2,604 | |
| 02-08-2029 | ₹ 2,073 | |
| 14-07-2028 | ₹ 2,020 | |
| 30-01-2029 | ₹ 3,526 | |
| XIRR | 0.37% | ₹ 1,54,000 |
Key Takeaways:
No Real Growth on Investment: The maturity benefit is almost the same as the total premiums paid, meaning there is minimal return on investment.
Low Sum Assured: The maximum coverage is ₹2 lakh, which is well below the IRDAI-mandated minimum of ₹5 lakh under Saral Jeevan Bima.
Declining Coverage Over Time: As each policy matures, the sum assured reduces, leading to inconsistent coverage.
High Premium for Low Returns: The policy charges a higher premium for a sum assured that is merely returned with a slight addition at maturity. Return-of-premium or “with-profit” policies typically come at a higher cost but offer lower coverage.
In summary, while the IndiaFirst Life Insurance Khata Plan provides guaranteed benefits, it offers minimal returns and lacks flexibility, making it a less effective option for long-term wealth creation or insurance coverage.
IndiaFirst Life Insurance Khata Plan Vs. Alternate strategy
Life insurance serves as a financial safety net, ensuring your dependents are supported in your absence. The sum assured is the amount your beneficiaries receive in case of unforeseen events.
To determine the right coverage, it’s essential to factor in your income, expenses, debts, and future financial goals.
Pure-term life insurance policies provide substantial coverage at affordable premiums, offering a reliable safety net for your family. This ensures financial security and helps you achieve your goals without deviation.
For wealth creation, you should invest based on your financial goals, risk tolerance, and investment horizon. Building a well-diversified investment portfolio is a smart approach to meeting all your financial objectives.
Final Verdict on IndiaFirst Life Insurance Khata Plan
The IndiaFirst Life Insurance Khata Plan is a basic life insurance policy that primarily returns your premium with a small addition at maturity.
The term “Khata” translates to “Account” in English, reflecting the policy’s concept—you open an insurance account and add new policies whenever you have surplus cash flow.However, each policy is treated separately, with different maturity dates.
One key drawback is the lack of a consistent sum assured. Your coverage increases when you add a new policy but decreases as policies mature, making it unpredictable.
Additionally, the policy has a maximum sum assured limit of ₹2 lakh, which is quite low and it also has high agent commission.
While the ability to add policies over time is marketed as an advantage, it can actually create complications. Managing multiple policies with different maturity dates can be cumbersome and adds unnecessary complexity.
Overall, the IndiaFirst Life Insurance Khata Plan offers little real value and instead becomes an administrative and financial burden.
A better approach is to determine the right life cover for your needs and opt for a pure-term life insurance policy. For wealth creation, invest in a diversified portfolio based on your financial goals.
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