PNB MetLife Guaranteed Future Plan
Can the PNB MetLife Guaranteed Future Plan secure your loved ones’ future with guaranteed returns?
Can the PNB MetLife Guaranteed Future Plan offer both security and assured growth?
Is the PNB MetLife Guaranteed Future Plan a reliable option for securing your financial future?
In this review, we will explore its features, advantages, and disadvantages, and assess its returns through an Internal Rate of Return (IRR) analysis. This will offer a clearer understanding of whether this insurance-cum-investment plan meets your needs.
What is the PNB MetLife Guaranteed Future Plan?
What are the features of PNB MetLife Guaranteed Future Plan?
Who is eligible for the PNB MetLife Guaranteed Future Plan?
What are the benefits of the PNB MetLife Guaranteed Future Plan?
Grace period, Reduced paid-up and Revival of PNB MetLife Guaranteed Future Plan
Free Look Period for the PNB MetLife Guaranteed Future Plan
Surrendering the PNB MetLife Guaranteed Future Plan
What are the advantages of PNB MetLife Guaranteed Future Plan?
What are the disadvantages of PNB MetLife Guaranteed Future Plan?
Research Methodology of PNB MetLife Guaranteed Future Plan
Benefit Illustration – IRR Analysis of PNB MetLife Guaranteed Future Plan
PNB MetLife Guaranteed Future Plan Vs. Other investments
PNB MetLife Guaranteed Future Plan Vs. Pure term + ELSS
Final Verdict on the PNB MetLife Guaranteed Future Plan
PNB MetLife Guaranteed Future Plan is an Individual, Non-linked, Non-Participating, Savings, Life Insurance Plan. PNB MetLife Guaranteed Future Plan offers you complete control and flexibility to customise your savings schedule based on your needs and affordability. You can also choose the manner in which you receive the maturity amount.
Option 1: Endowment Option
No survival benefit will be payable under this option.
Option 2: Income Option
The Guaranteed Income Payouts will be payable at PNB MetLife Guaranteed Future Plan policy anniversaries during the Income Payout period after completion of the premium payment term and deferment period if chosen.
Single pay option: Guaranteed Income Payouts = Guaranteed Addition which is expressed as a percentage of Annualised Premium
For other options: Guaranteed Income Payouts = sum of all Annualised Premium plus Guaranteed Additions accrued divided by Income payout period
Option 3: Income + Lumpsum
The Guaranteed Income Payouts will be payable at PNB MetLife Guaranteed Future Plan policy anniversaries during the Income Payout period after completion of the premium payment term and deferment period if chosen.
Guaranteed Income Payouts = sum of all Annualised Premium plus Guaranteed Additions accrued divided by Income payout period
Option 4: Income + Boosters
The Guaranteed Income Payouts will be payable at PNB MetLife Guaranteed Future Plan policy anniversaries during the Income Payout period after completion of the premium payment term and deferment period, if chosen.
Single pay option: Guaranteed Income Payouts = Guaranteed Addition which is expressed as a percentage of Annualised Premium. Additional payouts called Booster Additions will be paid along with the Guaranteed Income Payouts paid at specified policy anniversaries during the Income Payout period.
For other options: Guaranteed Income Payouts = sum of all Annualised Premium plus Guaranteed Additions accrued divided by Income payout period
Option 1: Endowment Option
On survival of the Life Assured till the Maturity Date, provided that the PNB MetLife Guaranteed Future Plan Policy is in In-force Status, the Guaranteed Maturity Benefit which is equal to the sum of Total premiums payable, accrued Guaranteed Additions and accrued Wealth Additions will be payable at maturity.
Option 3: Income + Lumpsum Option
On survival of the Life Assured till the Maturity Date, provided that the PNB MetLife Guaranteed Future Plan Policy is in In-force Status, Guaranteed Maturity benefit which is equal to the Accrued Wealth Additions will be payable.
Option 2 and Option 4
No maturity benefit is payable.
Death benefit shall include the Sum Assured on Death defined as Higher of,
The Death benefits payable shall not be less than the following based on the PNB MetLife Guaranteed Future Plan option chosen:
Option 1: Endowment – Total premiums paid plus accrued Guaranteed Additions and accrued Wealth Additions (if any) till the date of death
Option 2: Income – Total premiums paid plus accrued Guaranteed Additions less Guaranteed Income Payouts made during the Income Payout Period (if any) till date of death
Option 3: Income + Lumpsum – Total premiums paid plus accrued Guaranteed Additions and accrued Wealth Additions (if any) less Guaranteed Income Payouts made during the Income Payout Period (if any) till date of death
Option 4: Income + Boosters – Total premiums paid plus accrued Guaranteed Additions and accrued Booster Additions less Guaranteed Income Payouts made during the Income Payout Period (if any) till date of death
The grace period for payment of the premium is 15 days, where the PNB MetLife Guaranteed Future Plan policyholder pays the premium on a monthly basis and 30 days in all other cases.
If all due premiums for the first two consecutive years are not paid, the policy shall lapse at the end of the grace period and the risk cover and rider benefits, if any, will cease immediately
If a PNB MetLife Guaranteed Future Plan policy has acquired a surrender value and future due instalment premiums are not paid, the policy will continue as a paid-up policy with reduced benefits. However, the policyholder shall have the option to surrender the policy.
You can revive your lapsed / Paid-up policy and the riders for its full coverage within five consecutive years from the due date of the first unpaid premium but before policy maturity.
If you have any objections to the terms and conditions of your PNB MetLife Guaranteed Future Plan Policy, you may cancel the Policy within 30 days beginning from the date of receipt of the Policy document whether received electronically or otherwise.
If all due Instalment Premiums have been paid for at least two consecutive Policy Years, the Policy shall acquire a Guaranteed Surrender Value. The PNB MetLife Guaranteed Future Plan Policy will automatically terminate after payment of the Surrender Value.
The Surrender Value payable shall be higher of Guaranteed Surrender Value and Special Surrender Value.
The standout feature of the PNB MetLife Guaranteed Future Plan is its guaranteed benefits. You can customize the income payout period according to your needs. However, it’s crucial to evaluate these guaranteed benefits in terms of return percentages.
Let’s analyse the Internal Rate of Return (IRR) based on a benefit illustration from the policy brochure. Consider a 40-year-old male who opts for the PNB MetLife Guaranteed Future Plan with a sum assured of ₹10 lakhs.
The policy term is 15 years, and the premium payment term is 7 years, with an annual premium of ₹1 lakh.
| Male | 40 years |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 7 years |
| Annualised Premium | ₹ 1,00,000 |
Since he selects Plan Option 1: Endowment, he receives the guaranteed benefit at the end of the policy term. In this scenario, the final maturity benefit is ₹13.18 lakhs, resulting in an IRR of 5.37% as per the PNB MetLife Guaranteed Future Plan maturity calculator.
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -1,00,000 | 10,00,000 |
| 41 | 2 | -1,00,000 | 10,00,000 |
| 42 | 3 | -1,00,000 | 10,00,000 |
| 43 | 4 | -1,00,000 | 10,00,000 |
| 44 | 5 | -1,00,000 | 10,00,000 |
| 45 | 6 | -1,00,000 | 10,00,000 |
| 46 | 7 | -1,00,000 | 10,00,000 |
| 47 | 8 | 0 | 10,00,000 |
| 48 | 9 | 0 | 10,00,000 |
| 49 | 10 | 0 | 10,00,000 |
| 50 | 11 | 0 | 10,00,000 |
| 51 | 12 | 0 | 10,00,000 |
| 52 | 13 | 0 | 10,00,000 |
| 53 | 14 | 0 | 10,00,000 |
| 54 | 15 | 0 | 10,00,000 |
| 55 | 13,18,520 | 10,00,000 | |
| IRR | 5.37% |
This rate of return is not favourable for a long-term investment, given the 15-year policy term. Over such an extended period, inflation will erode the value of your returns, making it difficult to meet the increased cost of your financial goals.
In summary, the advantage of guaranteed benefits is diminished by the moderate returns offered under the PNB MetLife Guaranteed Future Plan.
The investment option under the PNB MetLife Guaranteed Future Plan falls short of being a compelling choice. Additionally, the insurance coverage provided is inadequate. The combination of insurance and investment in this plan does not yield the desired results.
Let’s explore an alternative approach using the same premium but in a more effective split.
Consider the same scenario from the previous illustration. For life coverage, a pure-term life insurance policy with a sum assured of ₹10 lakhs requires a premium of ₹15,100. The policy term is 15 years, with a premium payment term of 5 years.
In contrast to the previous case, where the premium was paid over 7 years, here, the remaining ₹84,900 from the ₹1 lakh premium is available for investment during the first 5 years. In the subsequent 2 years, the entire ₹1 lakh can be invested.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 5 years |
| Annualised Premium | ₹ 15,100 |
| Investment | ₹ 84,900 |
The investment choice can be tailored to your risk appetite. High-risk investors might opt for equity investments, while those with a lower risk tolerance could choose debt instruments. In this example, we’ve selected an Equity Linked Savings Scheme (ELSS) fund, which falls under equity investments.
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 40 | 1 | -1,00,000 | 10,00,000 |
| 41 | 2 | -1,00,000 | 10,00,000 |
| 42 | 3 | -1,00,000 | 10,00,000 |
| 43 | 4 | -1,00,000 | 10,00,000 |
| 44 | 5 | -1,00,000 | 10,00,000 |
| 45 | 6 | -1,00,000 | 10,00,000 |
| 46 | 7 | -1,00,000 | 10,00,000 |
| 47 | 8 | 0 | 10,00,000 |
| 48 | 9 | 0 | 10,00,000 |
| 49 | 10 | 0 | 10,00,000 |
| 50 | 11 | 0 | 10,00,000 |
| 51 | 12 | 0 | 10,00,000 |
| 52 | 13 | 0 | 10,00,000 |
| 53 | 14 | 0 | 10,00,000 |
| 54 | 15 | 0 | 10,00,000 |
| 55 | 22,49,751 | 10,00,000 | |
| IRR | 10.05% |
At maturity, the ELSS investment results in a pre-tax value of ₹24.64 lakhs. After accounting for capital gains tax, the post-tax value is ₹22.49 lakhs. The IRR for the combined ELSS investment and pure-term life insurance policy comes to 10.05% (post-tax return).
| ELSS Tax Calculation | |
| Maturity value after 15 years | 24,64,072 |
| Purchase price | 6,24,500 |
| Long-Term Capital Gains | 18,39,572 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 17,14,572 |
| Tax paid on LTCG | 2,14,322 |
| Maturity value after tax | 22,49,751 |
This return significantly outpaces inflation. This comparison clearly illustrates that bundling insurance and investment, as done in the PNB MetLife Guaranteed Future Plan, leads to moderate returns.
In contrast, separating these elements yields better returns and adequate life coverage, ensuring that you stay on track with your financial goals.
The PNB MetLife Guaranteed Future Plan allows you to save systematically while offering guaranteed benefits and protection against unforeseen life events. However, the coverage provided is limited and may not be sufficient.
The illustration above focuses on the endowment option, which yields low returns. If you choose the regular income option, the returns would be even lower. As a result, the savings accumulated under this plan do not grow into a significant corpus or income due to the poor returns and it also has a high agent commission.
The guaranteed payouts are unlikely to meet your financial goals, and the life cover is also inadequate, making the PNB MetLife Guaranteed Future Plan an unsuitable addition to your portfolio.
For life insurance, pure-term policies are more effective, offering high coverage at an affordable premium, and providing true protection for your loved ones. To achieve your financial goals, it’s essential to select the right products based on your objectives, risk tolerance, and time horizon.
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