PNB MetLife Retirement Savings Plan
Can the PNB MetLife Retirement Savings Plan secure a steady income for your post-retirement life?
Can the PNB MetLife Retirement Savings Plan turn your hard-earned savings into a lifetime of financial freedom?
Can the PNB MetLife Retirement Savings Plan provide a guaranteed income stream when you retire?
This article will provide insights into retirement plans to help you make an informed decision.
What is the PNB MetLife Retirement Savings Plan?
What are the features of the PNB MetLife Retirement Savings Plan?
Who is eligible for the PNB MetLife Retirement Savings Plan?
What are the benefits of the PNB MetLife Retirement Savings Plan?
Grace Period, Reduced Paid Up and Revival of the PNB MetLife Retirement Savings Plan
Free Look Period of PNB MetLife Retirement Savings Plan
Surrendering PNB MetLife Retirement Savings Plan
What are the advantages of the PNB MetLife Retirement Savings Plan?
What are the disadvantages of the PNB MetLife Retirement Savings Plan?
Research methodology of the PNB MetLife Retirement Savings Plan
Benefit Illustration – IRR Analysis of PNB MetLife Retirement Savings Plan
PNB MetLife Retirement Savings Plan Vs. Other investments
PNB MetLife Retirement Savings Plan Vs. Pure-term + ELSS
Final Verdict on the PNB MetLife Retirement Savings Plan
PNB MetLife Retirement Savings Plan is an Individual non-linked, Participating, Savings, Pension Plan. At the end of the term, the vesting benefit will be used to purchase an immediate annuity or you may defer the purchase of an annuity to a later date.
| Particulars | Boundary conditions |
| Minimum Age at Entry | 30 years |
| Maximum Age at Entry | Limited pay (10 pay)- 64 years Others – 65 years |
| Minimum / Maximum age at Vesting | 50 / 75 years |
| Minimum Sum Assured | Regular pay & Limited pay (10 pay): ₹ 30,000 Limited pay (5pay) & Single pay: ₹ 500000 |
| Maximum Sum Assured | As per board limits |
| Premium payment term | Single pay, 5 pay, 10 pay, Equal to policy term |
| Minimum policy term | Regular Pay & Limited Pay (5 pay): 10 years Limited Pay (10 pay): 11 years Single Pay: 5 years |
| Maximum policy term | Single Pay: 20 years Others: 30 years |
| Minimum Annualised premium | Regular Pay: ₹7,044 Limited Pay 10 Years: ₹13,128 Limited Pay 5 Years: ₹35,990 Single Pay: ₹262,250 |
The following is payable to the nominee
Death Sum Assured + Accrued Simple Reversionary Bonus + Terminal Bonus, if declared;
Where, Death Sum Assured is defined as 105% of total Premiums paid up to the date of death (excluding service tax and extra premium, if any).
Utilisation of Death benefit
If the insured survives and the PNB MetLife Retirement Savings Plan policy is in force till the Vesting Date, the Vesting Benefit shall be the Basic Sum Assured + Accrued Simple Reversionary Bonus + Terminal Bonus if declared.
Utilisation of Vesting Benefit
On vesting, the PNB MetLife Retirement Savings Plan policyholder shall exercise one of the following options:
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.
The PNB MetLife Retirement Savings Plan policy acquires Reduced Paid-Up Value on non-payment of due premiums, as per the following table
| Premium Payment Type | Criteria |
| Regular Pay/Limited Pay | Payment of at least 2 full year’s premiums |
| Single Pay | Not Applicable |
The PNB MetLife Retirement Savings Plan Policyholder can revive the Policy within five years from the date of the first unpaid premium
If you have any objections to any of the terms and conditions, you have the option to return the Policy within 15 days from the date of receipt of the Policy document (30 days in case the business has been sourced through Distance Marketing)
Surrender Value will be payable only if all due premiums have been paid for at least two full years. For the Single Pay option, the surrender value will be payable at any time. The Surrender Value is equal to the maximum Guaranteed Surrender Value and Special Surrender Value.
However, reduced paid-up value or Surrender value can be utilised similarly to the Vesting benefit.
The PNB MetLife Retirement Savings Plan helps you begin saving early for retirement, allowing you to invest through either a lump sum or regular payments. This builds a retirement corpus intended to provide steady income during your retirement years.
To make well-informed decisions, it’s crucial to evaluate the plan’s returns. Let’s calculate the Internal Rate of Return (IRR) based on a sample quote from the portal.
Consider a 40-year-old male investing ₹1,29,325 annually in the PNB MetLife Retirement Savings Plan for a policy term and premium payment period of 15 years.
The sum assured at vesting is approximately ₹25 lakhs, plus any bonuses. At the end of the policy term, the benefits vest, meaning they can be fully or partially used to purchase an annuity plan.
| Male | 40 years |
| Sum Assured | ₹ 25,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 1,29,325 |
The assumed investment returns are 4% p.a. and 8% p.a.; these are not upper or lower limits of what you might get back.
The vesting benefit in the 4% scenario is ₹26.01 lakhs with an IRR of 3.59% as per the PNB MetLife Retirement Savings Plan maturity calculator. In the 8% scenario, the vesting benefit is ₹32.65 lakhs with an IRR of 6.27% as per the PNB MetLife Retirement Savings Plan maturity calculator.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 41 | 2 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 42 | 3 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 43 | 4 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 44 | 5 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 45 | 6 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 46 | 7 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 47 | 8 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 48 | 9 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 49 | 10 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 50 | 11 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 51 | 12 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 52 | 13 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 53 | 14 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 54 | 15 | -1,29,325 | 25,00,000 | -1,29,325 | 25,00,000 |
| 55 | 26,01,490 | 25,00,000 | 32,65,160 | 25,00,000 | |
| IRR | 3.59% | 6.27% | |||
Although the IRR aligns with inflation, it’s considered notional, as the plan restricts how the corpus can be used—you are required to purchase an annuity at prevailing rates at the time of vesting.
The final corpus depends on bonus declarations, and the annuity rate is determined upon vesting. These uncertainties make the PNB MetLife Retirement Savings Plan a less appealing option.
The restriction on accessing your accumulated retirement corpus impacts liquidity, which is crucial during retirement.
To address this limitation, consider an alternative investment strategy that offers greater flexibility and better returns. Using the same parameters as in the previous example, we can separate insurance from investment for enhanced outcomes.
For life insurance, opting for a pure-term life insurance policy with a sum assured of ₹25 lakhs costs an annual premium of ₹16,400, with a policy term and premium payment period of 15 years. This leaves ₹1,12,925 available for investment.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 25,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 15 years |
| Annualised Premium | ₹ 16,400 |
| Investment | ₹ 1,12,925 |
Depending on your risk appetite, high-risk investors may prefer equity investments, while conservative investors could opt for debt instruments. In this example, the funds are invested in an Equity-Linked Savings Scheme (ELSS).
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 40 | 1 | -1,29,325 | 25,00,000 |
| 41 | 2 | -1,29,325 | 25,00,000 |
| 42 | 3 | -1,29,325 | 25,00,000 |
| 43 | 4 | -1,29,325 | 25,00,000 |
| 44 | 5 | -1,29,325 | 25,00,000 |
| 45 | 6 | -1,29,325 | 25,00,000 |
| 46 | 7 | -1,29,325 | 25,00,000 |
| 47 | 8 | -1,29,325 | 25,00,000 |
| 48 | 9 | -1,29,325 | 25,00,000 |
| 49 | 10 | -1,29,325 | 25,00,000 |
| 50 | 11 | -1,29,325 | 25,00,000 |
| 51 | 12 | -1,29,325 | 25,00,000 |
| 52 | 13 | -1,29,325 | 25,00,000 |
| 53 | 14 | -1,29,325 | 25,00,000 |
| 54 | 15 | -1,29,325 | 25,00,000 |
| 55 | 43,52,975 | 25,00,000 | |
| IRR | 9.57% |
After 15 years, the ELSS investment grows to a pre-tax value of ₹47.14 lakhs. After accounting for capital gains tax, the post-tax value is ₹43.52 lakhs. This approach results in a post-tax Internal Rate of Return (IRR) of 9.57%, significantly outperforming the PNB MetLife Retirement Savings Plan.
| ELSS Tax Calculation | |
| Maturity value after 20 years | 47,14,989 |
| Purchase price | 16,93,875 |
| Long-Term Capital Gains | 30,21,114 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 28,96,114 |
| Tax paid on LTCG | 3,62,014 |
| Maturity value after tax | 43,52,975 |
This alternative investment strategy not only offers higher returns but also provides complete flexibility, with no restrictions on how or when you can access your funds.
In contrast, the PNB MetLife Retirement Savings Plan requires you to purchase an annuity, making it a less favourable option for building a retirement corpus.
The PNB MetLife Retirement Savings Plan is marketed as a retirement solution. However, retirement planning typically involves both an accumulation phase and a distribution phase.
The PNB MetLife Retirement Savings Plan only addresses the accumulation phase, while the distribution phase (annuity) is not included.
Even during the accumulation phase, the plan limits how you can use the accumulated corpus. It requires you to purchase an annuity at prevailing rates at the time of vesting, meaning the annuity rate is not guaranteed.
Both the corpus accumulation and annuity rates are non-guaranteed, impacting your cash flow when you need a reliable income stream during retirement and also it has a high agent commission.
These factors raise concerns about the effectiveness of the PNB MetLife Retirement Savings Plan. To protect your family from uncertainties, it’s better to opt for pure-term life insurance with an adequate sum assured.
For building a retirement corpus, you should focus on creating an investment portfolio tailored to your risk tolerance.
Retirement planning is unique to each individual. Achieving your goals requires analysing your current financial situation and future needs.
Are Facebook, Twitter, and Quora the last word when it comes to financial advice?
For a personalized approach, it is advisable to consult a Certified Financial Planner, who can help you craft a customized retirement plan.
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