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Is the IndiaFirst Life Saral Bachat Bima Plan your shortcut to financial security, or just another insurance policy wrapped in complex terms?
Is the IndiaFirst Life Saral Bachat Bima Plan a smart investment choice for the future, or a gamble in disguise?
Will the IndiaFirst Life Saral Bachat Bima Plan truly safeguard your family’s future, or does it fall short when it matters most?
In this review, we will analyse its features, benefits, and drawbacks to help you make an informed decision.
Table of Contents
What is the IndiaFirst Life Saral Bachat Bima Plan?
What are the features of the IndiaFirst Life Saral Bachat Bima Plan?
Who is eligible for the IndiaFirst Saral Bachat Bima Plan?
What are the benefits of the IndiaFirst Life Saral Bachat Bima Plan?
Grace Period, Discontinuance and Revival of IndiaFirst Life Saral Bachat Bima Plan
Free Look Period of IndiaFirst Life Saral Bachat Bima Plan
Surrendering IndiaFirst Life Saral Bachat Bima
What are the advantages of the IndiaFirst Life Saral Bacht Bima Plan?
What are the disadvantages of the IndiaFirst Life Saral Bachat Bima Plan?
Research Methodology of IndiaFirst Life Saral Bachat Bima Plan
Benefit Illustration – IRR Analysis of IndiaFirst Life Saral Bachat Bima Plan
IndiaFirst Life Saral Bachat Bima Plan Vs. Other Investments
IndiaFirst Life Saral Bachat Bima Plan Vs. Pure-term + ELSS
Final Verdict on IndiaFirst Life Saral Bachat Bima Plan
What is the IndiaFirst Life Saral Bachat Bima Plan?
IndiaFirst Life Saral Bachat Bima Plan is a non-linked, non-participating, limited premium, individual savings life insurance policy.
It not only provides a shorter pay commitment of 5/7/10 years but also gives you savings and protection in a single policy while keeping you protected for a long term of 12 or 15 years.
What are the features of the IndiaFirst Life Saral Bachat Bima Plan?
- Secure long-term financial protection with life insurance coverage for up to 12 or 15 years.
- Pay premiums for 5, 7, or 10 years while enjoying coverage for the full policy term.
- Benefit from guaranteed additions that enhance your IndiaFirst Life Saral Bachat Bima Plan policy value.
- Ensure financial security for your loved ones with a lump sum payout or income for 5 years in case of the life assured’s demise.
- Receive an additional Sum Assured on Death in case of accidental death during the first policy year.
- opt for the Waiver of Premium Rider for added flexibility.
- Access a Funeral Cover (accelerated, not additional) with an advance payout of 10% of the Sum Assured on Death or ₹25,000, whichever is lower, upon intimation of the life assured’s death.
Who is eligible for the IndiaFirst Saral Bachat Bima Plan?
What are the benefits of the IndiaFirst Life Saral Bachat Bima Plan?
1.Maturity benefit
You stand to receive the Sum Assured on Maturity (SAM) PLUS accrued guaranteed additions, as the maturity benefit at the end of the policy term, provided you survive till the end of the IndiaFirst Life Saral Bachat Bima Plan policy term.
Sum Assured on Maturity (SAM) is defined as the guaranteed amount to become payable on the maturity of the policy.
2.Death benefit
The death benefit is paid out and the policy terminates. The nominee(s) will receive the higher of:
- Sum Assured on Death (SAD) PLUS accrued guaranteed additions (if any till date of death) or
- 105% of total premiums paid till date of death.
- Surrender value as at the date of death.
Where Sum Assured on Death (SAD) is higher of
- X times of annualized premium (X is 10 for ages 3 to 45 years and 7 for ages 46 and above) or
- An absolute amount (Basic Sum Assured) assured to be paid on death.
3.Guaranteed Addition
The IndiaFirst Life Saral Bachat Bima Plan policy provides guaranteed additions of X% of the Total Premiums Paid, where X varies with the Policy Term as provided in the table below
| Policy Term | Guaranteed Additions |
| 12 years | 4.75% |
| 15 years | 5.50% |
Grace Period, Discontinuance and Revival of IndiaFirst Life Saral Bachat Bima Plan
Grace Period
A Grace Period of 15 days under monthly mode and one month but not less than 30 days for other premium payment modes in case you miss your due premium on the due dates.
Discontinuance
The IndiaFirst Life Saral Bachat Bima Plan policy will acquire a paid-up value if at least one full year’s premiums have been paid.
In the event of non-payment of due premiums under the policy within the grace period, the policy will lapse if the policy has not acquired a paid-up value.
The risk cover will cease, and no further benefits will be payable in case of a lapsed policy.
Policy will acquire paid-up value after expiry of grace period from the date of first unpaid premium if all premiums have been paid in full for at least (1) one policy year, and subsequent due premiums not being paid.
Revival
You may revive your policy within 5 years from the due date of the first unpaid regular premium but before the expiry of the IndiaFirst Life Saral Bachat Bima Plan policy term.
Free Look Period of IndiaFirst Life Saral Bachat Bima Plan
If you disagree with any of those terms or conditions, you have the option of returning the policy to the insurer for cancellation, stating the reasons for your objection within 30 days from the date of receipt of the policy, whether received electronically or otherwise.
Surrendering IndiaFirst Life Saral Bachat Bima
You may surrender this Policy during the Policy Term any time after the Policy has acquired the Surrender Value. The IndiaFirst Life Saral Bachat Bima Plan policy will acquire a Guaranteed surrender value after the first two full years’ premiums have been paid.
The amount payable on surrender will be the higher of the Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV).
What are the advantages of the IndiaFirst Life Saral Bacht Bima Plan?
- Enhance your policy by adding optional riders to the base plan.
- Avail a loan of up to 70% of the acquired Surrender Value.
- Enjoy potential tax benefits on premiums paid and benefits received, subject to prevailing Income Tax Laws.
- Nominee(s) have the flexibility to receive the death benefit as a lump sum or as income over a period of 5 years.
What are the disadvantages of the IndiaFirst Life Saral Bachat Bima Plan?
- Despite guaranteed benefits, the returns are relatively low.
- The policy term and premium payment duration are fixed, limiting flexibility.
- The sum assured is insufficient to provide substantial financial security.
Research Methodology of IndiaFirst Life Saral Bachat Bima Plan
The IndiaFirst Life Saral Bachat Bima Plan provides guaranteed benefits. However, as an investor, it is essential to assess the plan’s returns before making a decision.
To facilitate this, we analyse a benefit illustration from the IndiaFirst Life Saral Bachat Bima Plan policy brochure and calculate the Internal Rate of Return (IRR), enabling a comparison with other investment options.
Benefit Illustration – IRR Analysis of IndiaFirst Life Saral Bachat Bima Plan
Consider a 25-year-old male who opts for the IndiaFirst Life Saral Bachat Bima Plan with a sum assured of ₹2.64 lakhs. With a premium payment term of 7 years and a policy term of 15 years, he pays an annual premium of ₹24,000.
| Male | 25 years |
| Sum Assured | ₹ 2,64,000 |
| Policy Term | 15 years |
| Premium Paying Term | 7 years |
| Annualised Premium | ₹ 24,000 |
| At 4% p.a. | |||
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 25 | 1 | -24,000 | 2,64,000 |
| 26 | 2 | -24,000 | 2,64,000 |
| 27 | 3 | -24,000 | 2,64,000 |
| 28 | 4 | -24,000 | 2,64,000 |
| 29 | 5 | -24,000 | 2,64,000 |
| 30 | 6 | -24,000 | 2,64,000 |
| 31 | 7 | -24,000 | 2,64,000 |
| 32 | 8 | 0 | 2,64,000 |
| 33 | 9 | 0 | 2,64,000 |
| 34 | 10 | 0 | 2,64,000 |
| 35 | 11 | 0 | 2,64,000 |
| 36 | 12 | 0 | 2,64,000 |
| 37 | 13 | 0 | 2,64,000 |
| 38 | 14 | 0 | 2,64,000 |
| 39 | 15 | 0 | 2,64,000 |
| 40 | 2,73,360 | ||
| IRR | 4.11% | ||
Upon completing the premium payments and holding the policy until maturity, he will receive a total maturity benefit, including guaranteed additions, of ₹2.73 lakhs. This results in an IRR of 4.11% as per the IndiaFirst Life Saral Bachat Bima Plan maturity calculator.
This calculation highlights that the guaranteed maturity benefit alone should not be the deciding factor in choosing this plan. The IRR of the IndiaFirst Life Saral Bachat Bima Plan is lower than the returns from debt instruments.
Given the long-term nature of this investment, the final corpus will fall short of covering the inflated cost of future financial goals.
IndiaFirst Life Saral Bachat Bima Plan Vs. Other Investments
Let’s explore alternative investment options, as the returns from the IndiaFirst Life Saral Bachat Bima Plan fail to keep pace with inflation. This plan combines life insurance and investment, but for a clearer comparison, we will separate these components using the same illustration metrics.
IndiaFirst Life Saral Bachat Bima Plan Vs. Pure-term + ELSS
The IRDAI has introduced a standardized pure-term policy called Saral Jeevan Bima, available through all insurers. This simple and uniform policy ensures financial security for families in case of the primary earner’s untimely demise.
The minimum sum assured is ₹5 Lakhs, with a maximum limit of ₹25 Lakhs.
In contrast, the IndiaFirst Life Saral Bachat Bima Plan caps the sum assured at ₹5 Lakhs, which is the bare minimum under IRDAI guidelines. Any sum assured below this threshold is inadequate.
Since the previous illustration had an even lower sum assured, we assume a minimum of ₹5 Lakhs for a fair comparison.
A pure-term life insurance policy with a sum assured of ₹5 Lakhs costs ₹3,700 per annum for a 15-year policy term, with a 5-year premium payment period. This leaves ₹20,300 from the ₹24,000 annual premium, which can be invested for wealth accumulation.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 5,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 5 years |
| Annualised Premium | ₹ 3,700 |
| Investment | ₹ 20,300 |
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 25 | 1 | -24,000 | 5,00,000 |
| 26 | 2 | -24,000 | 5,00,000 |
| 27 | 3 | -24,000 | 5,00,000 |
| 28 | 4 | -24,000 | 5,00,000 |
| 29 | 5 | -24,000 | 5,00,000 |
| 30 | 6 | -24,000 | 5,00,000 |
| 31 | 7 | -24,000 | 5,00,000 |
| 32 | 8 | 0 | 5,00,000 |
| 33 | 9 | 0 | 5,00,000 |
| 34 | 10 | 0 | 5,00,000 |
| 35 | 11 | 0 | 5,00,000 |
| 36 | 12 | 0 | 5,00,000 |
| 37 | 13 | 0 | 5,00,000 |
| 38 | 14 | 0 | 5,00,000 |
| 39 | 15 | 0 | 5,00,000 |
| 40 | 5,50,298 | ||
| IRR | 10.22% | ||
Investment choices should align with an individual’s risk appetite. High-risk investors may prefer equities, while conservative investors might opt for debt instruments.
In this case, we allocate the remaining funds to an Equity-Linked Savings Scheme (ELSS), which grows to ₹5.58 Lakhs over 15 years, resulting in a post-tax corpus of ₹5.50 Lakhs and an IRR of 10.22%.
| ELSS Tax Calculation | |
| Maturity value after 15 years | 5,89,698 |
| Purchase price | 1,49,500 |
| Long-Term Capital Gains | 4,40,198 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 3,15,198 |
| Tax paid on LTCG | 39,400 |
| Maturity value after tax | 5,50,298 |
This alternative approach delivers twice the accumulated corpus compared to the IndiaFirst Life Saral Bachat Bima Plan. Additionally, it provides higher life coverage and better returns than the IndiaFirst Life Saral Bachat Bima Plan.
Final Verdict on IndiaFirst Life Saral Bachat Bima Plan
The IndiaFirst Life Saral Bachat Bima Plan is a basic endowment policy that combines life coverage with maturity benefits and bonuses. However, it lacks flexibility, as both the policy term and the premium payment period are fixed.
While the plan offers guaranteed benefits, the returns are not compelling enough to justify an investment and it also has a high agent commission.
An analysis of returns reveals that this is a low-yielding product, unlikely to help you achieve your financial goals. Additionally, the sum assured is relatively low compared to the minimum standards set by IRDAI for pure-term policies.
As a result, the IndiaFirst Life Saral Bachat Bima Plan falls short in both life insurance coverage and investment returns.
A more effective approach is to secure adequate life insurance through a pure-term policy, which provides higher coverage at a lower cost. For wealth creation and financial goal planning, it is essential to build an investment portfolio aligned with your risk appetite.
A well-diversified portfolio enhances long-term financial security and helps navigate market fluctuations.
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For a structured and personalized financial plan, consulting a Certified Financial Planner can provide valuable guidance and confidence in making informed financial decisions.
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