PNB MetLife Bachat Yojana Plan: Good or Bad? An Insightful Review

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Can the PNB MetLife Bachat Yojana provide long-term financial stability with guaranteed benefits?

Can the PNB MetLife Bachat Yojana secure your family’s future while increasing your savings?

Is PNB MetLife Bachat Yojana the plan that offers both security and growth?

In this review, we will evaluate the plan’s features, benefits, drawbacks, and returns. This article will help you choose the right product to effectively channel your savings towards your future goals.

What is the PNB MetLife Bachat Yojana?

PNB MetLife Bachat Yojana is an Individual, Non-Linked, Participating, Savings, Life Insurance Plan. It helps you to address your long-term financial objectives. PNB MetLife Bachat Yojana ensures that your loved ones are financially secure and able to achieve their various goals.

What are the features of the PNB MetLife Bachat Yojana?

Pay premiums for just 10 years and enjoy coverage for 15 years.
Upon maturity, receive the Sum Assured along with any declared bonuses.
In the event of death during the 15-year policy term, your family will receive the Sum Assured plus any applicable simple reversionary and terminal bonuses.
The PNB MetLife Bachat Yojana policy is designed to support long-term savings goals.

Who is eligible for the PNB MetLife Bachat Yojana?

Minimum age at entry	20 years
Maximum age at entry	60 years
Maximum age at maturity	75 years
Premium paying term	10 years Limited pay
Policy term	15 years
Minimum Sum Assured	₹ 64,800
Maximum Sum Assured	₹ 5 Lakhs
Minimum Premium	Annual – ₹ 6000 Semi-Annual – ₹ 10,000 Monthly / PSP – ₹ 15000
Maximum Premium	₹ 23,999 per life
Premium payment mode	Annual, Semi-Annual, Monthly and Payroll Savings Program (PSP)

What are the benefits of the PNB MetLife Bachat Yojana Plan?

1.) Maturity Benefit

In case of survival till maturity, the PNB MetLife Bachat Yojana policyholder will get Base Sum Assured plus accrued Simple Reversionary Bonus plus Terminal Bonus, if declared.

2.) Death Benefit

In case of death of the life insured, the nominee will get: Death Sum Assured + Accrued Simple Reversionary Bonus, if declared + Terminal Bonus if declared,

Where Death Sum Assured is defined as a higher of

10 times the Annualized Premium,
Absolute amount assured to be paid on death (Base Sum Assured),
105% of total premiums paid till the date of death;

Base Sum Assured = Chosen Annualized Premium * Multiplier Factor

3.) Bonuses

Simple Revisionary Bonus: A Simple Reversionary Bonus is declared every year starting from the 3^rd year onwards and it is expressed as a percentage of the Sum Assured. It is payable on the death of the life insured or on maturity or on surrender whichever is earlier.

Terminal Bonus: Terminal Bonus is declared from year five onwards. It will be accrued as a percentage of the accrued Simple Reversionary Bonus. It is payable along with death or maturity benefit.

Grace period, Discontinuance and Revival of PNB MetLife Bachat Yojana

Grace period

A grace period of 30 days from the due date of the unpaid premium (15 days for monthly & PSP mode) will be allowed for payment of the premium.

Discontinuance

i.) Lapsed Policy

If you discontinue the payment of premiums before your policy has acquired a Surrender Value (policy acquires surrender value on payment of first two Policy Years’ premium), your Policy will lapse at the end of the grace period and the Death Benefit and Rider Benefits, if any, will cease immediately and no benefits will be paid.

ii.) Reduced paid-up policy

If the Regular Premiums for at least the first two Policy years have been paid in full and no further due premiums have been paid under, then the PNB MetLife Bachat Yojana Policy acquires Paid-Up Value and will be eligible for a Reduced Paid-Up Value.

Revival

The PNB MetLife Bachat Yojana Policyholder may revive the lapsed Policy within 5 years from the date of the first unpaid premium

Free Look period of PNB MetLife Bachat Yojana

If you have any objections to the terms and conditions of your PNB MetLife Bachat Yojana Policy, you may cancel the Policy within 15 days (30 days in case the Policy is sold to You through Distance Marketing) from the date of receiving your Policy.

Surrendering PNB MetLife Bachat Yojana

If all the instalment Premiums for the first two Policy Years are paid in full, the PNB MetLife Bachat Yojana Policy shall acquire a surrender value.

If your policy has acquired Surrender Value and you choose to discontinue your Policy, you will be entitled to Surrender Value, which is equal to the maximum of Guaranteed Surrender Value and Special Surrender Value.

What are the advantages of the PNB MetLife Bachat Yojana?

Pay premiums for a limited duration and enjoy life coverage throughout the entire policy term.
You can avail a loan of up to 90% of the Special Surrender Value.

What are the disadvantages of the PNB MetLife Bachat Yojana Plan?

The policy term and premium payment period lack flexibility.
The sum assured is insufficient to cover the family’s basic needs.

Research Methodology of PNB MetLife Bachat Yojana

Like other endowment plans, the PNB MetLife Bachat Yojana offers life coverage throughout the PNB MetLife Bachat Yojana policy term, with a maturity benefit at the end.

The cash flow is simple: you pay premiums for a limited period and receive a lump sum upon maturity. Besides the cash flow, the Internal Rate of Return (IRR) helps in assessing the plan’s viability.

Benefit Illustration – IRR Analysis of PNB MetLife Bachat Yojana

Here’s an example from the PNB MetLife portal: A 30-year-old male opts for the Bachat Yojana with a sum assured of ₹2.84 Lakhs. The policy term is 15 years, and he pays an annual premium of ₹23,999 for 10 years.

Male	30 years
Sum Assured	₹ 2,84,148
Policy Term	15 years
Premium Paying Term	10 years
Annualised Premium	₹ 23,999

If all premiums are paid, the maturity benefit, including bonuses, is provided. The illustration is based on assumed investment rates of 4% and 8%, these returns are not guaranteed and don’t represent the maximum or minimum return you may earn.

		At 4% p.a.		At 8% p.a.
Age	Year	Annualised premium / Maturity benefit	Death benefit	Annualised premium / Maturity benefit	Death benefit
30	1	-23,999	2,84,148	-23,999	2,84,148
31	2	-23,999	2,84,148	-23,999	2,84,148
32	3	-23,999	2,84,148	-23,999	2,84,148
33	4	-23,999	2,84,148	-23,999	2,84,148
34	5	-23,999	2,84,148	-23,999	2,84,148
35	6	-23,999	2,84,148	-23,999	2,84,148
36	7	-23,999	2,84,148	-23,999	2,84,148
37	8	-23,999	2,84,148	-23,999	2,84,148
38	9	-23,999	2,84,148	-23,999	2,84,148
39	10	-23,999	2,84,148	-23,999	2,84,148
40	11	0	2,84,148	0	2,84,148
41	12	0	2,84,148	0	2,84,148
42	13	0	2,84,148	0	2,84,148
43	14	0	2,84,148	0	2,84,148
44	15	0	2,84,148	0	2,84,148
45		2,97,138	2,84,148	4,03,157	2,84,148

	IRR	2.04%		4.97%

The estimated maturity benefit at 4% is ₹2.97 Lakhs, yielding an IRR of 2.04% as per the PNB MetLife Bachat Yojana plan maturity calculator, which is lower than typical savings account rates.

At 8%, the projected maturity benefit is ₹4.03 Lakhs, resulting in an IRR of 4.97% as per the PNB MetLife Bachat Yojana plan maturity calculator, which is less than what bank fixed deposits offer.

While the plan spans 15 years, its returns do not outpace inflation, leading to a shortfall in building a meaningful corpus. Moreover, the life cover is insufficient, making the PNB MetLife Bachat Yojana an unsuitable choice for meeting your financial goals.

PNB MetLife Bachat Yojana Vs. Other products

For life coverage, it’s always wise to choose a pure-term policy. These policies provide only life cover, paying a death benefit in case of an unfortunate event, with no other benefits payable.

The IRDAI has standardized a pure-term policy called Saral Jeevan Bima, which is offered by all insurers. Let us analyse the cost-effective feature of such policies using a scenario.

PNB MetLife Bachat Yojana Vs. Pure-term + ELSS

Saral Jeevan Bima is a simple and standardized policy that ensures financial security for families in case of the primary earner’s untimely demise.

The minimum sum assured is ₹5 Lakhs, and the maximum is ₹25 Lakhs, making it accessible to a broader section of society, particularly those in the informal or unorganized sectors.

A pure-term policy with a ₹5 Lakh sum assured costs around ₹4,600 in premiums, whereas the PNB MetLife Bachat Yojana charges ₹23,999 for a sum assured of ₹2.8 Lakhs. By investing the difference, based on your risk tolerance, you can achieve better returns.

Pure Term Life Insurance Policy
Sum Assured	₹ 2,84,148
Policy Term	15 years
Premium Paying Term	10 years
Annualised Premium	₹ 4,600
Investment	₹ 19,399

High-risk investors might choose equity, while conservative investors could opt for debt. In this example, the remaining funds are invested in an Equity-Linked Savings Scheme (ELSS), growing to ₹6.71 Lakhs over 15 years, with a post-tax value of ₹6.27 Lakhs and an IRR of 9.26%.

Age	Year	Term Insurance premium + ELSS	Death benefit
30	1	-23,999	5,00,000
31	2	-23,999	5,00,000
32	3	-23,999	5,00,000
33	4	-23,999	5,00,000
34	5	-23,999	5,00,000
35	6	-23,999	5,00,000
36	7	-23,999	5,00,000
37	8	-23,999	5,00,000
38	9	-23,999	5,00,000
39	10	-23,999	5,00,000
40	11	0	5,00,000
41	12	0	5,00,000
42	13	0	5,00,000
43	14	0	5,00,000
44	15	0	5,00,000
45		6,27,825

	IRR	9.26%

ELSS Tax Calculation
Maturity value after 15 years	6,71,944
Purchase price	1,93,990
Long-Term Capital Gains	4,77,954
Exemption limit	1,25,000
Taxable LTCG	3,52,954
Tax paid on LTCG	44,119
Maturity value after tax	6,27,825

This alternative approach offers both higher life coverage and better returns than the PNB MetLife Bachat Yojana, making the plan inadequate for those seeking robust protection and growth.

Final Verdict on the PNB MetLife Bachat Yojana

The PNB MetLife Bachat Yojana is a basic endowment plan that provides life coverage and maturity benefits with bonuses. However, the policy term and premium payment period are fixed, offering no flexibility for adjustments based on the policyholder’s needs.

The returns analysis shows that it is a low-yielding product that may not help you achieve your financial goals and also it has a high agent commission. Additionally, the sum assured is relatively low compared to the standards set by IRDAI for pure-term policies.

Overall, the PNB MetLife Bachat Yojana falls short in both life coverage and investment returns.

For effective life coverage, opting for a pure-term life insurance policy is advisable. It offers cost-effective, high coverage tailored to your future goals, current earnings, and liabilities. In contrast to endowment plans, pure-term policies focus solely on life protection.

Simultaneously, building a robust investment portfolio is crucial for wealth growth and achieving long-term goals, ensuring overall financial security.

A pure-term policy acts as a safety net for your dependents, while your investment strategy is essential for reaching your financial objectives.

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PNB MetLife Bachat Yojana Plan: Good or Bad? An Insightful Review

Table of Contents:

What is the PNB MetLife Bachat Yojana?

What are the features of the PNB MetLife Bachat Yojana?

Who is eligible for the PNB MetLife Bachat Yojana?