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Will Pramerica Life Rock Solid Future plan be a solid plan to secure your future?
The future is unpredictable but escalating inflation and expenses are a certainty. Therefore, you need a proper financial plan.
As the name suggests, will the Pramerica Life Rock Solid Future plan ensure your future remains Rock Solid even in the face of uncertainty?
Pramerica Life Rock Solid Future plan a prudent choice for your future?
In this article, let’s analyse the Advantages (Pros), Disadvantages (Cons), and IRR Analysis of the plan to find out whether investing in this plan makes your future better.
Table of Contents
1.) What is Pramerica Life Rock Solid Future?
2.) What are the Features of Pramerica Life Rock Solid Future?
3.) What are the Eligibility Criteria of Pramerica Life Rock Solid Future?
4.) What are the Benefits of Pramerica Life Rock Solid Future?
5.) Pramerica Life Rock Solid Future Grace Period, Discontinuance and Revival
6.) Pramerica Life Solid Future Free Look Period
7.) Surrendering Pramerica Life Rock Solid Future
8.) Advantages of Pramerica Life Rock Solid Future
9.) Disadvantages of Pramerica Life Rock Solid Future
10.) Pramerica Life Rock Solid Future Research Methodology
- Pramerica Life Rock Solid Future Benefit Illustration – IRR Analysis
11.) Pramerica Life Rock Solid Future VS Other Investment Return
- Pramerica Life Rock Solid Future VS Pure-Term Life Insurance + PPF / ELSS
- Pramerica Life Rock Solid Future VS LIC Jeevan Utsav
- Pramerica Life Rock Solid Future VS LIC New Endowment Plan
12.) Final Verdict on Pramerica Life Rock Solid Future
1.) What is Pramerica Life Rock Solid Future Plan?
Pramerica Life Rock Solid Future Plan is an Individual Non-Participating Non-Linked Savings Life Plan.
It is designed to help you achieve your vision of a Rock-Solid future, be it fulfilling your dreams, building a fortune, or planning your retirement income.
There are 4 plan options available under this plan.
2.) What are the Features of Pramerica Life Rock Solid Future Plan?
- You have four plan options namely Income Builder, Family Income Builder, Fortune Builder, and Dream Builder.
- Option to pay premium once or pay for 5 to 12 years.
- It offers guaranteed benefits.
- Based on your needs you may choose to receive the benefits as Lumpsum or as Income.
- You have the flexibility to choose an Income Period from 10/15/20 /25/30/35 years to match your life goals.
3.) What are the Eligibility Criteria of Pramerica Life Rock Solid Future Plan?
4.) What are the Benefits of Pramerica Life Rock Solid Future Plan?
The benefits you receive will depend on the plan option chosen. Let’s analyse the benefits in detail:
| Plan Options | Income Benefit | Maturity Benefit | Death Benefit |
| Income Builder Option | Expressed as a percentage of Annualised Premium payable in arrears from the end of thePolicy Term for the chosen income period | Along with the last Income payout, you shall receive a Guaranteed Lumpsum Benefit, which is expressed as a percentage of Total Premiums paid | The highest of: • Sum Assured on Death (or) • 105% of the Total Premiums paid till the date of death for Regular/Limited Pay Policies (or) • Surrender Value as of date of death |
| Family Income Builder option | The highest of:• Sum Assured on Death (or) • 105% of the Total Premiums paid till the date of death for Regular/Limited Pay Policies. In addition to the immediate death benefit, the company will waive off future premiums and your family will start receiving the income benefit from next month for the chosen income benefit period along with a Lumpsum benefit with the last income installment. |
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| Fortune Builder option | NA | Sum Assured on Maturity = Guaranteed Maturity Benefit + accrued Loyalty Boosters. For Other than Single Pay Policies: 75 percent of Total Annualised Premiums. For Single Pay Policies: A percentage of Single Premium | The highest of: • Sum Assured on Death (or) • 105% of the Total Premiums paid till the date of death for Regular/Limited Pay Policies (or) • Surrender Value as of date of death |
| Dream Builder Option | NA | The highest of • Sum Assured on Death (or) • 105% of the Total Premiums paid till the date of death for Regular/Limited Pay Policies. In addition to the immediate death benefit, the company will waive the future premiums and the beneficiary will receive the maturity amount when due. |
5.) Pramerica Life Rock Solid Future Grace Period, Discontinuance and Revival
Grace Period
If you are unable to pay your premium by the due date, you will be given a grace period of 15 days for the monthly mode and 30 days for all other premium payment modes.
Discontinuance
Single pay – Immediate surrender value
Other than single – Surrender value – after payment of Premium for at least the first two policy years in full
If you discontinue the payment of premiums before your Policy has acquired a Surrender Value, your Policy shall lapse at the end of the grace period, the Death Benefit will immediately be ceased and no other benefits will be given when the Policy is in lapsed status.
Suppose when the Policy has acquired a Surrender Value and no future premiums are paid, you have the option to continue the Policy on a Reduced Paid-up basis.
Revival
You can revive your lapsed/Paid-up policy for its full coverage within five years from the due date of the first unpaid premium but before policy maturity, by paying all outstanding premiums together with the interest.
6.) Pramerica Life Rock Solid Future Plan: Free Look Period
If you disagree with any of these terms and conditions, then you have an option to return the Policy within a period of 15 days.
It is 30 days for policies purchased through Distance Marketing and for electronic policies. Free Look Period begins exactly on the same day when the policy is in force.
To get better insights on the terms and conditions you can refer to the Pramerica Life Rock Solid Future Plan Policy Brochure
7.) Surrendering Pramerica Life Rock Solid Future
Policies other than single pay shall acquire a Surrender Value after complete payment of Premium for at least the first two policy years. Whereas in the Single Pay option surrender value shall be acquired immediately on the payment of Single Premium.
If your Policy has acquired a Surrender Value and you choose to discontinue your policy, you will be entitled to receive a Surrender Value that will be higher of the Special Surrender Value (SSV) or Guaranteed Surrender Value (GSV) of the Policy.
8.) Advantages of Pramerica Life Rock Solid Future
- Flexible Premium Payment Modes.
- You may take a loan against your policy once it has acquired a Surrender Value with the maximum limit being 75% of the surrender value.
- Income benefits or lumpsum benefits can be chosen based on personal requirements.
9.) Disadvantages of Pramerica Life Rock Solid Future
- Waiver of premium benefit is available only in select variants.
- Life cover is not extended during the income pay-out period.
10.) Pramerica Life Rock Solid Future Plan: Research Methodology
So far, the discussion is around the plan’s basic details. Now let us evaluate the performance by calculating the returns.
It is always wise to estimate the potential return from the investment and compare it with other investment opportunities.
This will help you in investment decisions.
Pramerica Life Rock Solid Future Plan: Benefit Illustration – IRR Analysis
A 35-year-old male has a 1-year-old daughter and he wants to build a corpus for his child’s future.
He plans to purchase Pramerica Life Rock Solid Future (Dream Builder Option) and pay ₹ 1, 50,000 p.a. for 12 years to create a lump sum corpus after 20 years.
| Male | 35 years |
| Sum Assured | ₹ 16,50,000 |
| Policy Term | 20 years |
| Premium paying term | 12 years |
| Annualised premium | ₹ 1,50,000 |
| Plan option | Dream Builder |
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -1,50,000 | 16,50,000 |
| 36 | 2 | -1,50,000 | 16,50,000 |
| 37 | 3 | -1,50,000 | 16,50,000 |
| 38 | 4 | -1,50,000 | 16,50,000 |
| 39 | 5 | -1,50,000 | 16,50,000 |
| 40 | 6 | -1,50,000 | 16,50,000 |
| 41 | 7 | -1,50,000 | 16,50,000 |
| 42 | 8 | -1,50,000 | 16,50,000 |
| 43 | 9 | -1,50,000 | 16,50,000 |
| 44 | 10 | -1,50,000 | 16,50,000 |
| 45 | 11 | -1,50,000 | 16,50,000 |
| 46 | 12 | -1,50,000 | 16,50,000 |
| 47 | 13 | 0 | 16,50,000 |
| 48 | 14 | 0 | 16,50,000 |
| 49 | 15 | 0 | 16,50,000 |
| 50 | 16 | 0 | 16,50,000 |
| 51 | 17 | 0 | 16,50,000 |
| 52 | 18 | 0 | 16,50,000 |
| 53 | 19 | 0 | 16,50,000 |
| 54 | 20 | 0 | 16,50,000 |
| 36,37,980 | 16,50,000 | ||
| IRR | 4.87% |
The plan option Dream Builder doesn’t offer any income benefit. On completion of the policy term, a maturity benefit of ₹ 36.37 lakhs is receivable. The IRR for the given cash flow is 4.87%.
The rate of return under the Pramerica Life Rock Solid Future plan is uneconomical for a long-term investment. Though the benefits are guaranteed, it is not wise to invest in a plan that has a fetching rate lesser than inflation.
11.) Comparison of Pramerica Life Rock Solid Future Plan with other investment option return
Now, let us take the above scenario and look for other investment opportunities to invest. Pramerica Life Rock Solid Future plan offers life cover protection and investment opportunity.
The same premium amount of ₹ 1, 50,000 can be utilised better. This can be done by purchasing a Pure-Term life insurance policy for life cover and investing the balance amount for wealth creation.
i.) Pramerica Life Rock Solid Future VS Pure-Term Life Insurance + PPF / ELSS
A Pure-Term policy for a sum assured of ₹ 16, 50,000 would cost ₹ 13,700. For the same sum assured, the premium under the Pramerica Life Rock Solid Future Plan is ₹ 1, 50,000. This leaves you with ₹ 1.36 Lakhs for investment.
| Pure-Term Life Insurance Policy | |
| Sum Assured | ₹ 16,50,000 |
| Policy Term | 20 years |
| Premium paying term | 10 years |
| Annualised premium | ₹ 13,700 |
| Investment | ₹ 1,36,300 |
The premium paying term in the earlier illustration was 12 years. But for a Pure-Term life insurance policy, the premium paying term is 10 years. So, for the next 2 years, the full amount is available for investment.
| Age | Year | Term Insurance + PPF | Term insurance + ELSS | ||
| Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit | ||
| 35 | 1 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 36 | 2 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 37 | 3 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 38 | 4 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 39 | 5 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 40 | 6 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 41 | 7 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 42 | 8 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 43 | 9 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 44 | 10 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 45 | 11 | -1,50,000 | 16,50,000 | -1,50,000 | 16,50,000 |
| 46 | 12 | -1,48,500 | 16,50,000 | -1,50,000 | 16,50,000 |
| 47 | 13 | -500 | 16,50,000 | 0 | 16,50,000 |
| 48 | 14 | -500 | 16,50,000 | 0 | 16,50,000 |
| 49 | 15 | -500 | 16,50,000 | 0 | 16,50,000 |
| 50 | 16 | 0 | 16,50,000 | 0 | 16,50,000 |
| 51 | 17 | 0 | 16,50,000 | 0 | 16,50,000 |
| 52 | 18 | 0 | 16,50,000 | 0 | 16,50,000 |
| 53 | 19 | 0 | 16,50,000 | 0 | 16,50,000 |
| 54 | 20 | 0 | 16,50,000 | 0 | 16,50,000 |
| 45,99,312 | 16,50,000 | 84,58,241 | 16,50,000 | ||
| IRR | 6.51% | 10.79% | |||
PPF investment requires a minimum subscription of ₹ 500 in a financial year for 15 years. In the previous illustration, the premium paying term is 12 years.
So, adjustments were made in the last 3 years. After that, the account is extended for the next 5 years to match the Maturity Benefit under the Pramerica Life Rock Solid Future plan.
The final maturity value under PPF is ₹ 45.99 Lakhs. The IRR for Pure-Term life insurance and PPF investment is 6.51%.
Capital gains tax arises while exiting the ELSS fund. The tax calculation is given below. The tax amount is set aside before calculating the final maturity value. The final post-tax maturity value is ₹ 84.58 Lakhs. The IRR for Pure-Term life insurance and ELSS investment is 10.79%.
| ELSS Tax calculation | |
| Maturity value after 20 years | 92,02,157 |
| Purchase price | 16,63,000 |
| Long -Term Capital Gains | 75,39,157 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 74,39,157 |
| Tax paid on LTCG | 7,43,916 |
| Maturity value after tax | 84,58,241 |
In these alternate investments, you get better returns than the Pramerica Life Rock Solid Future plan. The IRR analysis clearly shows that investing for your goals should be done separately and shouldn’t be clubbed with insurance.
ii) Pramerica Life Rock Solid Future VS LIC Jeevan Utsav
Just like Pramerica Life Rock Solid Future Plan it offers life coverage along with an option to invest the savings. To get a better understanding of the Benefits, Advantages, and IRR Analysis.
You can read our article on LIC Jeevan Utsav – Complete Analysis and Review
iii) Pramerica Life Rock Solid Future VS LIC New Endowment Plan
It is another investment product that offers a blend of savings and protection to the investor. LIC New Endowment Plan policyholders receive a sizeable lump sum payment at maturity to meet their financial requirements.
If you critically analyse the plan you can take from our blog post on: LIC New Endowment Plan (Plan no.914): An Insightful Review
12.) Final Verdict on Pramerica Life Rock Solid Future Plan
Pramerica Life Rock Solid Future Plan offers 4 different plan options with various combinations of Income Benefits and Maturity Benefits. Based on your requirements, you can choose one of the plan options.
The plan offers life cover and allows you to invest your savings.
The investment part under Pramerica Life Rock Solid Future is not satisfactory. The return on investment is at the rock bottom level. The plan fails to be a solid plan to protect your future.
The lesser compatibility along with the High Agent Commission makes it least beneficial for an investor. Investing in Pramerica Life Rock Solid Future plan doesn’t lay a good foundation for your investment journey.
We suggested some alternate methods where there is a separate plan for your insurance portfolio and investment portfolio.
Pure-term life insurance will act as a safety net for your family. And your investment portfolio should be diversified across asset classes to meet all your future milestones.
Referring to Social Media Platforms like Quora, Facebook won’t be helpful to a great extent. Always decide and choose an investment product that suits your needs.
A professional financial planner can provide inputs and customise a plan based on your preference, risk profile, and financial goals.
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