Listen to this articleIs the IndiaFirst Life Mahajeevan Plus Plan a smart investment for long-term wealth creation, or are there better ways to grow your savings?
Is the IndiaFirst Life Mahajeevan Plus the perfect choice for securing your family’s future, or should you look beyond the hype?
Does the IndiaFirst Life Mahajeevan Plus Plan offer the financial security you seek, or are there more rewarding options available?
In this review, we will analyse its features, benefits, and drawbacks, along with detailed calculations.
Table of Contents:
What is the IndiaFirst Mahajeevan Plus Plan?
What are the features of the IndiaFirst Life Mahajeevan Plus Plan?
Who is eligible for the IndiaFirst Life Mahajeevan Plus Plan?
What are the benefits of the IndiaFirst Life Mahajeevan Plus Plan?
Grace Period, Discontinuance and Revival of IndiaFirst Life Mahajeevan Plus Plan
Free Look Period for IndiaFirst Life Mahajeevan Plus Plan
Surrendering IndiaFirst Life Mahajeevan Plus Plan
What are the advantages of the IndiaFirst Life Mahajeevan Plus Plan?
What are the disadvantages of the IndiaFirst Life Mahajeevan Plus Plan?
Research Methodology of IndiaFirst Life Mahajeevan Plus Plan
Benefit Illustration – IRR Analysis of IndiaFirst Life Mahajeevan Plus Plan
IndiaFirst Life Mahajeevan Plus Plan Vs. Other Investments
IndiaFirst Life Mahajeevan Plus Plan Vs. Pure-term + ELSS
Final Verdict on IndiaFirst Life Mahajeevan Plus Plan
What is the IndiaFirst Mahajeevan Plus Plan?
IndiaFirst Life Mahajeevan Plus Plan is a Non-Linked, Participating, Individual, Limited Pay, Money Back Savings Life Insurance Plan.
It gives you savings and protection in a single policy while keeping you protected for a long term of 15 or 20 years. It will also take care of your liquidity needs through multiple money-backs during the policy term.
What are the features of the IndiaFirst Life Mahajeevan Plus Plan?
Provides life insurance coverage for a term of 15 or 20 years.
Offers periodic payouts at the end of the 3rd, 7th, and 11th policy years, each equal to 103% of the annualised premium.
Grants maturity benefits along with bonuses at the end of the policy term.
Requires premium payments for 12 years while offering coverage for the full policy duration.
Who is eligible for the IndiaFirst Life Mahajeevan Plus Plan?
|
Criteria |
Policy term – 20 years |
Policy term – 15 years |
|
Minimum Age at Entry |
1 month |
3 years |
|
Maximum Age at Entry |
55 years |
|
|
Minimum Age at Maturity |
20 years |
18 years |
|
Maximum Age at Maturity |
75 years |
|
|
Premium Payment Term |
12 years |
|
|
Policy Term |
20 years |
15 years |
|
Guaranteed Sum Assured on Maturity |
Up to 50 years INR 1,10,280 |
|
|
Sum Assured on Death |
Up to 50 years INR 1,20,000 |
|
|
Minimum Premium |
Age at entry 50 years or less |
Age at entry above 50 years |
|
Premium Paying Modes |
Annual, Half-yearly, Quarterly and Monthly |
|
What are the benefits of the IndiaFirst Life Mahajeevan Plus Plan?
i)Maturity benefit
You stand to receive the Guaranteed Sum Assured on maturity PLUS accrued Simple Reversionary Bonus, if declared PLUS Terminal Bonus, if declared, as the maturity benefit at the end of the policy term.
ii)Survival benefit
You will receive a money-back benefit of 103% of the Annualized Premium at the end of the 3rd, 7th and 11th policy year during the IndiaFirst Life Mahajeevan Plus Plan policy term.
iii)Death benefit
In case of death of the Life Assured, the nominee(s) will receive a higher of:
- Sum Assured on Death (SAD) PLUS Accrued Simple Reversionary Bonus, if declared, PLUS Terminal Bonus, if declared or
- 105% of total premiums paid till date of death.
Where Sum Assured on death (i.e. SAD) is defined as 10 times the Annualized Premium
iv)Bonuses
Simple Reversionary Bonus (SRB): The Simple Reversionary Bonus rates are not fixed or guaranteed. If declared it will be calculated on the Guaranteed Sum Assured at Maturity.
Terminal Bonus (TB): Terminal Bonus, if declared will be paid either on death or on maturity or on surrender.
Grace Period, Discontinuance and Revival of IndiaFirst Life Mahajeevan Plus Plan
Grace Period
This IndiaFirst Life Mahajeevan Plus 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.
Discontinuance
If less than one (1) full-year premium has been paid and any subsequent premium is not duly paid, then the policy will lapse after the expiry of the grace period from the date of the first unpaid premium.
If at least one (1) full-year premium has been paid and any subsequent due premiums are not paid, then the policy will acquire paid-up value after the expiry of the grace period from the date of the first unpaid premium.
Revival
You may revive your IndiaFirst Life Mahajeevan Plus Plan policy within 5 years from the due date of the first unpaid regular premium but before the expiry of the policy term.
Free Look Period for IndiaFirst Life Mahajeevan Plus Plan
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.
Surrendering IndiaFirst Life Mahajeevan Plus Plan
The IndiaFirst Life Mahajeevan Plus Plan policy shall acquire a Guaranteed Surrender Value on payment of premium for at least two consecutive years.
Special Surrender Value shall become payable after completion of the first policy year provided one full-year premium has been paid.
At the time of surrender higher of Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV) will be payable. The surrender value payable will vary by policy term and policy year of surrender.
What are the advantages of the IndiaFirst Life Mahajeevan Plus Plan?
Enjoy a discount on early renewal premium payments.
Benefit from the Life Cover Continuance feature, which keeps your life cover active for one year even if you miss a premium payment (after paying at least two full years’ premiums).
Higher premium payments lead to an enhanced maturity benefit factor.
Access a loan of up to 80% of the available surrender value.
Option to enhance coverage by adding riders to the base policy.
What are the disadvantages of the IndiaFirst Life Mahajeevan Plus Plan?
The policy term and premium payment term lack flexibility.
The sum assured is relatively low.
Survival benefits may lead to discretionary spending.
The money-back payouts cannot be deferred, reducing the final maturity benefit.
Research Methodology of IndiaFirst Life Mahajeevan Plus Plan
The IndiaFirst Life Mahajeevan Plus Plan provides guaranteed payouts at regular intervals along with maturity benefits and bonuses.
While periodic income may seem beneficial, it is crucial to assess the plan’s overall returns. To make an informed decision, we will calculate the Internal Rate of Return (IRR) based on the benefit illustration provided in the policy brochure.
Benefit Illustration – IRR Analysis of IndiaFirst Life Mahajeevan Plus Plan
Consider a 35-year-old male opting for the IndiaFirst Life Mahajeevan Plus Plan with a sum assured of ₹12.60 lakhs. The policy term is 15 years, with a premium payment term of 12 years and an annual premium of ₹1,00,000.
|
Male |
35 years |
|
Sum Assured |
₹ 12,60,000 |
|
Policy Term |
15 years |
|
Premium Paying Term |
12 years |
|
Annualised Premium |
₹ 1,00,000 |
During the policy term, he will receive survival benefits at the end of the 3rd, 7th, and 11th years. The guaranteed survival benefit equals 103% of the sum assured, and the maturity benefit, including bonuses, is payable at the end of the term.
The illustration assumes two different return scenarios: 8% p.a. and 4% p.a. These returns are not guaranteed and do not indicate the maximum or minimum possible earnings.
|
At 4% p.a. |
At 8% p.a. |
||||
|
Age |
Year |
Annualised premium / Maturity benefit |
Death benefit |
Annualised premium / Maturity benefit |
Death benefit |
|
35 |
1 |
-1,00,000 |
12,60,000 |
-1,00,000 |
12,60,000 |
|
36 |
2 |
-1,00,000 |
12,60,000 |
-1,00,000 |
12,60,000 |
|
37 |
3 |
-1,00,000 |
12,60,000 |
-1,00,000 |
12,60,000 |
|
38 |
4 |
3,000 |
12,60,000 |
3,000 |
12,60,000 |
|
39 |
5 |
-1,00,000 |
12,60,000 |
-1,00,000 |
12,60,000 |
|
40 |
6 |
-1,00,000 |
12,60,000 |
-1,00,000 |
12,60,000 |
|
41 |
7 |
-1,00,000 |
12,60,000 |
-1,00,000 |
12,60,000 |
|
42 |
8 |
3,000 |
12,60,000 |
3,000 |
12,60,000 |
|
43 |
9 |
-1,00,000 |
12,60,000 |
-1,00,000 |
12,60,000 |
|
44 |
10 |
-1,00,000 |
12,60,000 |
-1,00,000 |
12,60,000 |
|
45 |
11 |
-1,00,000 |
12,60,000 |
-1,00,000 |
12,60,000 |
|
46 |
12 |
3,000 |
12,60,000 |
3,000 |
12,60,000 |
|
47 |
13 |
0 |
12,60,000 |
0 |
12,60,000 |
|
48 |
14 |
0 |
12,60,000 |
0 |
12,60,000 |
|
49 |
15 |
0 |
12,60,000 |
0 |
12,60,000 |
|
50 |
9,99,600 |
14,64,414 |
|||
|
IRR |
1.15% |
4.95% |
|||
At a 4% return scenario, the maturity benefit is ₹9.99 lakhs, resulting in an IRR of just 1.15% as per the IndiaFirst Life Mahajeevan Plus Plan maturity calculator, offering virtually no value addition.
At an 8% return scenario, the maturity benefit is ₹14.64 lakhs, leading to an IRR of 4.95% as per the IndiaFirst Life Mahajeevan Plus Plan maturity calculator, which is lower than returns from debt instruments.
The IndiaFirst Life Mahajeevan Plus Plan delivers extremely low returns, making it an ineffective tool for wealth creation. Additionally, the plan does not allow deferral of the survival benefits, meaning you are locked into the investment until the term ends.
The sum assured is also inadequate to meet a family’s essential financial needs. Given these limitations, this plan is an unsuitable choice for achieving long-term financial goals.
IndiaFirst Life Mahajeevan Plus Plan Vs. Other Investments
The IndiaFirst Life Mahajeevan Plus Plan offers low investment returns and inadequate life coverage due to the combination of insurance and investment.
Instead of opting for this policy, allocating the same premium to a more strategic approach can yield better returns. Let’s illustrate this with a comparison.
IndiaFirst Life Mahajeevan Plus Plan Vs. Pure-term + ELSS
A pure-term life insurance policy with a sum assured of ₹13 lakhs (similar to the IndiaFirst Mahajeevan Plus Plan) costs an annual premium of ₹8,500. This policy has a 15-year term with a 10-year premium payment period.
This leaves ₹91,500 per year for 10 years available for investment. Based on your risk appetite, you can allocate this amount to suitable investments.
|
Pure Term Life Insurance Policy |
|
|
Sum Assured |
₹ 12,60,000 |
|
Policy Term |
15 years |
|
Premium Paying Term |
10 years |
|
Annualised Premium |
₹ 8,500 |
|
Investment |
₹ 91,500 |
In the previous illustration, the premium paying term for the Mahajeevan Plus Plan is 12 years. Since a pure-term policy requires payments for only 10 years, the full ₹1 lakh can be invested in the remaining two years.
|
Term insurance + ELSS |
|||
|
Age |
Year |
Term Insurance premium + ELSS |
Death benefit |
|
35 |
1 |
-1,00,000 |
12,60,000 |
|
36 |
2 |
-1,00,000 |
12,60,000 |
|
37 |
3 |
-1,00,000 |
12,60,000 |
|
38 |
4 |
3,000 |
12,60,000 |
|
39 |
5 |
-1,00,000 |
12,60,000 |
|
40 |
6 |
-1,00,000 |
12,60,000 |
|
41 |
7 |
-1,00,000 |
12,60,000 |
|
42 |
8 |
3,000 |
12,60,000 |
|
43 |
9 |
-1,00,000 |
12,60,000 |
|
44 |
10 |
-1,00,000 |
12,60,000 |
|
45 |
11 |
-1,00,000 |
12,60,000 |
|
46 |
12 |
3,000 |
12,60,000 |
|
47 |
13 |
0 |
12,60,000 |
|
48 |
14 |
0 |
12,60,000 |
|
49 |
15 |
0 |
12,60,000 |
|
50 |
25,04,016 |
||
|
IRR |
10.27% |
||
For comparison, we consider investing in an ELSS fund. To align with the survival benefits of the Mahajeevan Plus Plan, equivalent withdrawals are made during the policy term.
At the end of 15 years, all remaining units are redeemed to match the maturity benefit, with capital gains calculated only at final redemption (excluding previous withdrawals) while considering the LTCG exemption limit of ₹1.25 lakh per year.
|
ELSS Tax Calculation |
|
|
Maturity value after 15 years |
26,84,589 |
|
Purchase price |
11,15,000 |
|
Long-Term Capital Gains |
15,69,589 |
|
Exemption limit |
1,25,000 |
|
Taxable LTCG |
14,44,589 |
|
Tax paid on LTCG |
1,80,574 |
|
Maturity value after tax |
25,04,016 |
This strategy results in an IRR of 10.27% (post-tax), significantly outperforming the Mahajeevan Plus Plan. Additionally, it provides greater flexibility, allowing withdrawals based on personal financial needs.
The IndiaFirst Life Mahajeevan Plus Plan falls short due to its low returns, lack of flexibility, and insufficient life cover, making it a less effective choice for financial planning.
Final Verdict on IndiaFirst Life Mahajeevan Plus Plan
The IndiaFirst Life Mahajeevan Plus Plan emphasizes regular income benefits, lump sum maturity payouts, and life coverage.
While it may seem appealing due to its liquidity and life cover protection, the money-back and maturity benefits are unlikely to provide substantial financial support when needed.
In essence, this plan is a basic money-back policy with below-average returns and an inadequate sum assured and it also has a high agent commission.
Since its investment component does not effectively contribute to wealth creation and its insurance coverage falls short, it is best to avoid this plan.
A pure-term life insurance policy offers a more cost-effective way to secure your family’s financial future, providing substantial coverage at an affordable premium.
To achieve your financial goals, it is essential to build a well-diversified investment portfolio based on your time horizon, risk tolerance, and objectives.
Avoid mixing savings with insurance—choosing the right financial products is key to a successful financial journey.
Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?
For a well-structured financial plan, consider consulting a Certified Financial Planner who can recommend investment strategies tailored to your needs.
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