Listen to this article
What is on your dream list?
It varies from person to person – Buying a car, building a home, World tour, dreams related to kids etc. But life is full of uncertainties. If you don’t plan then you may have to compromise on these dreams.
Do you have an investment plan to fulfil these dreams?
PNB MetLife Century Plan provides you with income for your whole life along with cover for the whole of your life.
Will this plan help to fulfil your dreams?
Will this plan allow you to live a life without compromises?
Table of Contents
1.) An overview of PNB Met Life Century Plan
2.) Feature of PNB Met Life Century Plan
3.) Eligibility Criteria of PNB Met Life Century Plan
4.) Benefits of PNB Met Life Century Plan
5.) How to Cancel/Surrender PNB Met Life Century Plan?
6.) Advantages of PNB Met Life Century Plan
7.) Disadvantages of PNB Met Life Century Plan
8.) Research Methodology on PNB Met Life Century Plan
9.) Benefit Illustration Analysis of PNB Met Life Century Plan
10.) PNB Met Life Century Plan vs. Other Investments
11.) Final Verdict on PNB Met Life Century Plan
An overview of PNB Met Life Century Plan
PNB MetLife Century Plan is an Individual, Non-linked, Participating, Savings, Life Insurance plan. The plan provides a regular income and helps to build a corpus to achieve the planned goals and secure your loved one’s future, without any compromises.
It also provides a waiver of premiums to ensure that your goals are not compromised in case of untimely demise.
Features of PNB Met Life Century Plan
- Choose from various premium payment term options from 5 to 10 or 12 or 15 years and stay covered for the whole of your life.
- Option to pay premiums in Yearly, Half Yearly, Quarterly or Monthly mode
- Get life protection & income for the whole life period.
- Enjoy the flexibility to accumulate the survival benefit pay-outs and withdraw as and when required.
- Choice of 3 Income options based on your need – Super income option, Smart income option & Future income option
- Helps to create a legacy with a lump sum at maturity.
- Under the Super income option, the cash bonus – is 10% & for the Future Income option, the cash bonus – is 30%.
Eligibility Criteria of PNB Met Life Century Plan
| Particulars | Premium Payment Term | Family Care Option | Option 1: Super Income | Option 2: Smart Income | Option 3: Future Income |
| Policy Term | All | With/ Without | Maturity Option 1: 80 minus Age at Maturity Option 2: 100 minus Age at entry | ||
| Premium Payment Term (years) | With/ Without | 5 to 10, 12, 15 | 5 to 10, 12, 15 | 8, 10, 12, 15 | |
| Minimum Age at Entry1 (years) | All | Without | 0 (30 days) | ||
| With | 18 | ||||
| Maximum Age at Entry1 (years) | 5 to 9 | Without | 55 | 55 | 55 |
| 10, 12, 15 | 60 | 65 | 60 | ||
| 5 -10, 12, 15 | With | 50 | 50 | 50 | |
| Maturity Age1 (years) | All | With/ Without | Maturity Option 1:80 years: Maturity Option 2: 100 years | ||
| Minimum Sum Assured (Rs.) | 5 to 9 | With/ Without | 6,00,000 | ||
| 10, 12, 15 | 2,40,000 | ||||
| Maximum Sum Assured (Rs.) | All | With/ Without | Based on Board Approved Underwriting Policy | ||
| Minimum Annualized Premium (Rs.) | 5 to 9 | With/ Without | 60,000 | ||
| 10, 12, 15 | 24,000 | ||||
| Maximum Annualized Premium (Rs.) | All | With/ Without | As per Board Approved Underwriting Policy | ||
Benefits of PNB Met Life Century Plan
Survival Benefit:
Super income option – The Survival Benefit in the form of a Cash Bonus, if declared, shall be payable every year from 1st Policy Year until death or end of the policy term, whichever is earlier. During the premium paying term the cash bonus rates are subject to a minimum guaranteed rate. Cash bonus rates declared after PPT are not guaranteed and purely depend on the experience of the underlying Participating Fund.
Smart income option – The Survival Benefit in the form of a Cash Bonus, if declared, shall be payable every year from 1st Policy Year until death or end of the policy term, whichever is earlier. Cash bonus rates declared during the policy term are not guaranteed and purely depend on the experience of the underlying Participating Fund.
Future income option – Simple Reversionary Bonus, if declared will accrue at each policy anniversary from the 1st policy year till the 14th policy year. The Survival Benefit will be the sum of Fixed Income and Cash Bonus which will be paid every year from the end of the 15th policy year. Cash Bonus (if declared) payable during the Fixed Income Pay-out Period shall be subject to a Minimum Guaranteed Cash Bonus rate. It is payable on death or end of the policy term.
Maturity Benefit:
Option to choose the Maturity date for the policyholder as age 80 years or 100 years. On survival of the Life Assured till the Maturity Date (as chosen), provided that the Policy is in In-force Status, the policyholder will receive an aggregate of:
- Sum Assured on Maturity (Sum of annualised premium paid);
- Accrued cash bonuses, if not paid earlier;
- Fixed Income, if applicable and not paid earlier;
- Terminal Bonus, if declared
Death Benefit:
In the event of the unfortunate death of the Life Assured during the policy term provided that the policy is still in in-force status on the date of death, Death Benefit shall be equal to the following and payable as lumpsum:
- Sum Assured on Death, plus;
- Accrued cash bonuses, if not paid earlier, plus;
- Accrued Simple Reversionary Bonus less Sum of all Fixed Incomes already paid (if applicable),
- Interim Cash/Simple Reversionary Bonus (if any) plus
- Terminal Bonus on death (if declared)
Family care benefit:
If Family Care Benefit has been chosen at the inception of the policy, then in case of death of Life Assured, all future premiums (if any) shall be waived and Sum Assured on Death shall be payable as lumpsum and all future survival benefits and maturity benefit shall continue to be paid to the nominee.
Bonus:
Simple Reversionary Bonus rates, Cash Bonus rates and Terminal Bonus rates, if any, shall be declared at the end of the financial year. It shall be paid out to the eligible policyholders during the next year as per the date chosen by the policyholder. Bonus rates are not guaranteed and purely depend on the experience of the underlying Par Fund.
Simple revisionary bonus – Percentage of Annualised premium – Payable on death/Surrender/Maturity.
Cash bonus – The percentage of Annualised Premium – Payable on survival/death
Terminal bonus – Percentage of Basic Sum assured – payable on completion of 10 policy years or Premium payment term whichever is earlier.
Additional benefits
Additional Benefit as High Premium Reward:
The following additional benefit (expressed as a percentage of the Sum Assured on Maturity) shall be provided on Maturity.
| Premium Size | Additional Benefits |
| Rs. 0 – 99,999 | 0% |
| Rs. 100,000 – 2,99,999 | 5% |
| Rs. 300,000 – 499,999 | 7.50% |
| Rs. 500,000 & above | 10% |
Flexible premium payment modes and modal factors:
You may choose to pay premiums by Yearly, Half Yearly, Quarterly or Monthly mode subject to the minimum annualized premium under each mode.
Loan:
A loan against the policy is allowed once it acquires a Surrender Value. The maximum amount that can be availed is 80% of the Surrender Value of your policy at the end of the relevant Policy Year.
Riders:
PNB MetLife Accidental Death Benet Rider Plus (UIN: 117B020V03)
PNB MetLife Serious Illness Rider (UIN: 117B021V03)
The Grace period, Discontinuance & Revival
Grace period:
If premiums are not paid on their due dates, a grace period of 30 days (15 days for monthly mode) from the due date of unpaid premium will be allowed.
Discontinuance:
If a policy has acquired Guaranteed Surrender Value and future instalment premiums are not paid, the policyholder shall have the option to either surrender the policy or continue it as a paid-up policy with reduced benefits.
Revival:
Policy in lapsed or paid-up condition can be revived within a period of five consecutive years from the due date of the first unpaid instalment premium. On the revival of the policy, corresponding cash bonuses shall accrue and will be paid to the policyholder.
How to Cancel/Surrender PNB Met Life Century Plan?
Free look period
If the policyholder disagrees with any of the terms or conditions, (s)he has the option to return the policy to the insurer for cancellation. The Policyholder has a free look period of 15 days from the date of receipt of the policy document and a period of 30 days in case of electronic policies and policies obtained through distance mode.
Surrender
If your Policy has acquired a Surrender Value& and you choose to discontinue your Policy, you will be entitled to the Surrender Value, which is higher than the Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV) of the policy.
GSV = (GSV Factor multiplied by Total Premiums Paid; plus, Accrued Cash Bonuses/Fixed Incomes (if not paid earlier); plus, GSV Simple Reversionary Bonus Factor multiplied by the sum of all accrued Simple Reversionary Bonuses, if any) less Survival Benefits applicable.
Advantages of PNB Met Life Century Plan
- Flexibility to choose the life cover – 80 or 100 years of age & also premium paying term.
- The cash bonus option starts in the first year itself in the selected variant.
- Deferment of cash bonuses helps in compounding wealth accumulation.
- The cash bonus increases every 15 years, under the Smart income option.
- All future pay-outs continue even after the demise of the policyholder if the family care benefit is chosen.
Disadvantages of PNB Met Life Century Plan
- Only a small percentage of cash bonus is guaranteed. Most of the cash bonuses are not guaranteed.
- The lock-in period is 5 years for surrender or loan.
- The cash bonus can’t be relied on as a secondary source of income for retirees.
Research Methodology on PNB Met Life Century Plan:
Till now, we have come across some important key features and other important things that we need to know about PMB Met Life Century Plan.
But, we cannot decide by using this factual information.
So, now let’s do a detailed analysis of the IRR of PNB Met Life Century Plan to see how can it benefit us.
In this analysis, first, we are going to use the PNB Met Life Century Plan Online Calculator to calculate the IRR of the PNB Met Life Century Plan.
Then, we are going to apply the same value to calculate the IRR of other investments such as PPF and ELSS.
And finally, we are going to compare the IRR of PNB Met Life Century Plan with other investments to see whether PNB Met Life Century Plan benefit us or not.
Benefit Illustration Analysis of PNB Met Life Century Plan
There are 3 options under the PNB Met life Century Plan. The cash bonus varies from plan to plan. The following table shows the various options & their respective IRR.
| Option 1 Super income | Option 2 Smart Income | Option 3 Future income | ||||
| Male | 30 years | 30 years | 45 Years | |||
| Sum Assured | 6,00,000 | 5,0,0000 | 10,50,000 | |||
| Premium Paying term | 12 | 10 | 10 | |||
| Policy term | Till the age of 100 | Till the age of 100 | Till the age of 100 | |||
| Annual premium | 50,000 | 50,000 | 1,00,000 | |||
| At the rate of 4% | At the rate of 8% | At the rate of 4% | At the rate of 8% | At the rate of 4% | At the rate of 8% | |
| IRR | 3.04% | 6.24% | 2.90% | 6.11% | -0.03% | 5.92% |
The above illustration has been determined using assumed gross investment returns of 8% respectively. The assumed rate of return is not guaranteed and these are not the upper or lower limits.
On analysing the various option, it is evident that the return on investment differs from option to option. The reason for this is, the cash bonus is not guaranteed & in some cases it is constant & in some cases, it increases at a predefined period.
The IRR in general should be higher than the inflation rate. The IRR of PNB Met Life Century is far below than inflation rate. So, from an investment point of view, this plan is not beneficial.
PNB Met Life Century Plan vs. Other Investments:
PNB Met life Century plan offers a return in the range of 2% – 6%. These returns are not inflation-beating ones. Moreover, the cash bonus receivable year on year will not suffice to meet any short-term goals. And sometimes the annual survival benefit may end up in discretionary expense. Also, the sum assured is not adequate for any individual.
Instead of investing in the PNB Met life century plan, investors can go for a pure-term policy with appropriate life cover protection. Investing in PNB met life century plan has a tax benefit advantage. Similarly, investing in PPF & ELSS mutual funds also offers tax advantages. Investors can consider inflation beatings for wealth accumulation.
| Other Investments | Rate of Return |
| ELSS | 12% (Assumed) |
| PPF | 7.10% |
| RBI Bonds | 7.15% |
Final Verdict on PNB Met Life Century Plan
PNB Met Life Century Plan is a variant of the traditional Money back policy. In this plan, the guaranteed cash bonus percentage is very limited. The major portion of the pure-term bonus is non-guaranteed. We can’t earmark these survival benefits as they are fluctuating.
Cash bonus rates declared during the policy term are not guaranteed and purely depend on performance.
From an investment perspective, it is advisable to build a portfolio based on the investment horizon & risk appetite. The portfolio asset allocation should be reviewed & rebalanced for wealth accumulation.
If you have any comments or questions, write them in the comment box below.
Or are you interested in creating a Comprehensive Financial Plan for your financial goals?
Skip the queue by registering for your 30 Minute FREE Financial Plan Consultation. Click the ‘‘BOOK YOUR SLOT NOW!’’ button below.
Leave a Reply